Stax: Writing the Growth Narrative of a Global Management Consultancy from Sri Lanka

Stax: Writing the Growth Narrative of a Global Management Consultancy from Sri Lanka

This article was published in DailyFT on March 24, 2022.

Having doubled its headcount over the past three years, and with a projection of further doubling over the next 12-18 months, the management consultancy Stax is undergoing a journey of rapid growth. Following the recent notice announcing the completion of a private equity deal with Blue Point Capital Partners, the firm is accelerating its expansion plans with a long-term view of creating value for its global clientele.

Contrary to the Stax growth narrative and the sheer number of prominent management consultancies setting up in Sri Lanka in recent years, management consultancy is a relatively new line of work in Sri Lanka. This embodies the country’s agenda to transition towards a knowledge economy.

Always on the look-out for talent with the aptitude to solve high-value questions for some of the largest blue chips in the world, the Stax narrative is part testament to Sri Lanka’s brimming potential to be a talent hub for management consultancies, and part open call for anyone looking to take on a challenging, yet disproportionately rewarding career path.

In this interview, Managing Directors, Dr. Kumudu Gunasekera and Ruwindhu Peiris, share their thoughts on the state of the industry and the exciting road ahead for Stax. Following are excerpts:

Q: How would you introduce the industry of management consulting to Sri Lankans?

Ruwindhu: Management consulting is essentially a spectrum of services provided by knowledge workers to apply deep expertise to business contexts. Very simply put, consultants are teams of cross-functional professionals with wide and varied experience and expertise. These teams undertake specific business problems and deliver strategic recommendations and implementations for their clients.

In the case of Stax, we are very specifically focused on helping investors and client businesses to allocate their capital efficiently and effectively to help maximise value creation. Organisations have access to limited pools of capital and allocating these resources efficiently is often the difference between success and failure for businesses.

Kumudu: We have chosen to differentiate ourselves as a firm with an emphasis on the Private Equities (PE) market given that PE firms often explore high-growth opportunities with potential for maximised value. Stax gets involved in the buy-side as well as sell-side of the deal market, undertaking high-value activities such as commercial due diligence, value maximisation initiatives during the hold period, and helping position investments for the next round of investors.

Our service blueprint involves undertakings related to processes, people, technology, data, products, and market fit. In our work, we’ve identified that data, technology, product, and market fit are the top priorities for our target market and our competencies have grown in alignment with these requirements.

Q: What makes management consulting attractive for local talent?

Ruwindhu: I personally believe that highly driven and motivated people solve three main things – freedom, influence, and impact. With this framework in mind, it’s easy to recommend management consulting as a great career path for this type of individual. The work we do is atypical, to say the least. We work with large global clients to help them solve global business problems at scale. In this line of work, there is no limitation in terms of the industry that you work in or the contribution you are able to make. I think, for someone who chooses management consulting as a career, there is never a question of how relevant the work you are doing is in the grandest scheme of things, on a global stage.

Kumudu: I’d like to answer that question with a very clear statement. We provide disproportionate value for value creation. This is largely true across the consulting industry, but especially true for us at Stax. We are in a high-growth stage of our journey. In the short term, we are looking to grow from a 100-person outfit to a headcount of 200 and in the medium term, we are looking at being a 500-person team. Naturally, a large component of this growth will be contributed by and to the team we have with us.

Learning is certainly the other aspect of what makes a career in consulting lucrative. What team members are able to absorb in their work with Stax by engaging with clients operating across a multitude of industries greatly exceeds what the same individual stands to learn from a domain-specialised organisation. Interestingly, we learned recently from a study that was conducted that our team members are performing in roles that are three to four years above their age when compared to the industry. The takeaway for me from that study is that the intensity of personal learning and growth that takes place at Stax is impressive even outside of the other perks of working in consulting.

Q: How does Stax position itself in the world of consulting?

Kumudu: Stax is positioned as a specialised leader in the consulting industry with a focused view of working in the private equity market. If the question is how we compare against the large consulting firms like the “big three,” the answer is really in the detail.

While most consulting firms are viewing Sri Lanka as an emerging economy with businesses that are coming into their own as potential customers of consulting, for Stax, Sri Lanka is primarily a pool of high-quality talent. We are not looking at the cost arbitrage of hiring local talent, nor are we placing a focus on serving local clients. We are in the business of acquiring the best minds that the country has to offer, so we can provide a platform for that talent to work with some of the largest global clients.

Certainly, it’s a great thing that these big firms are setting up in Sri Lanka. Inevitably, the talent pool will be upskilled, and more opportunity always yields better outcomes. But the Stax experience for someone who joins our team is the power to actively contribute towards shaping the growth trajectory of a high-growth consulting business.

Ruwindhu: Stax is exceptionally well-positioned in the way that we have been able to inculcate and nurture a true learning culture with assured mutual growth for team members. It’s a great work environment to draw from and contribute to conversations that are changing the world.

We place a lot of emphasis on experiential learning, and unlike in a large firm with regional silos, at Stax you can rest assured that you have a part to play in the core of the business.

Q: What is the typical profile of a management consultant?

Kumudu: We really only ask that you be exceptional! On a serious note, there is a great deal of responsibility that we undertake as knowledge workers. Clients rely on our ability to deliver as a team to make crucial decisions that will have very real outcomes in their businesses.

Naturally, anyone who joins consulting will be expected to take their work seriously with an anti-hierarchy attitude. Our hiring process begins with a one-minute video submission that answers three simple questions. From the get-go we want everyone to understand that this is a truly different career experience.

We expect team members to stand out and make an impression, but almost contradictorily, we also expect everyone on our team to be able to leave their egos at the door and subscribe to an unlearn and re-learn type of mentality.

Ruwindhu: In our experience hiring for this team, we have identified that individuals with the ability to thrive in ambiguity do well in our line of work. As consultants, we live in the grey area and are looked upon to provide, clarity, structure, and coherence to complex situations.

I think anyone with the ability to apply their learning in very practical ways, who have a passion for solving complex problems, and most importantly is comfortable being uncomfortable will be a great fit for us.

Q: Consulting is criticised for selling advice that often can’t be implemented. How do you respond?

Ruwindhu: I can speak very specifically to the work that we do at Stax. When you are dealing with specialised undertakings related to capital allocation and conducting due diligence on investment prospects, we come to know very quickly whether our advice was right.

As a firm, we firmly stand behind our work, and I like to think the client retention we have demonstrated is the proof in the pudding.

We are focused on answering high-value questions and those answers certainly translate to business outcomes in a three-to-six-month window of time.

Kumudu: Actually, I want to challenge that criticism. It’s important for clients to be good consumers of consulting with buy-in from the leadership level and a collaborative organisational structure that is geared to receive consulting services and action them.

As consultants, we draw from exposure to a wide array of industries and business contexts to strategise for productive outcomes. We make it our business to fully understand and go about solving high-value problems on an acute incident basis. The savviness of clients to consume that type of insight and input is essential for mutually successful outcomes for the consulting firm and the client business.

Very particularly, in the case of Stax, we go a step beyond the traditional consulting practice of drawing from specialised domain expertise, which tends to be closed-minded at times, to consciously contend the problem at hand and find specific answers to the questions that are being asked of us.

Stax has attracted private equity interest for itself from Blue Point Capital Partners.

Q: How does this investment from Blue Point Capital impact day-to-day business at the firm?

Kumudu: We like to think of private equity funding as patient capital when compared with raising funds from public markets. By raising capital through private equity, we are able to take a longer-term view of how we want to create value and for whom. This is essential to running the firm successfully for us.

We are harvesting funds back to the company to further enable a longer-term window for business structuring and the way we get to carve out the market to service segments that we can add the most value to.

We carefully picked the investment partners that we decided to go on this journey with and it has been a meeting of minds and expectations at the table with Blue Point Capital Partners.

For talent that we acquire and add to the team, we are able to provide a wider scope of opportunity in terms of growth and in terms of the learning that we deliver as a firm undergoing rapid growth. More expertise will be brought into the firm, translating to better learning opportunities and more leadership opportunities will be made available to the teams that we house.

Q: What is the purpose statement for Stax?

Ruwindhu: We stay true to our purpose statement – “freedom to dream, power to make it happen.”

A great example of the purpose that we are serving is the Sri Lanka at 100 initiative that we have been able to bring to fruition. Sri Lanka at 100 is a platform for local SMEs to participate in the knowledge transfer and resourcing that we are able to facilitate through our engagements with some of the world’s largest businesses. It’s been a great opportunity for local businesses and business leaders to gain a global perspective that they can inculcate into their own business practices.

Our purpose towards clients remains persistently to accelerate their growth stories and enable them to achieve larger market capitalisation positions.

Q: What is a typical day in the life of a management consultant?

Kumudu: It’s challenging and fast-paced. We are doing serious work and serious work isn’t fun and frivolous, but like we’ve discussed, there’s a significant upside for individuals who take their careers seriously.

Having said that, at Stax, we have a team of exceptional, outgoing personalities and a lot of events and activities that are no doubt enjoyable. Overall, the work is challenging and with certainty, no one who gets into consulting at Stax ever finds their work boring or stagnant.

Q: Sri Lanka is in the midst of an unprecedented economic crisis and a large part of the Stax talent pool is based in Sri Lanka; what is your outlook on the economy and how it impacts knowledge businesses like Stax?

Ruwindhu: If you look around, you’ll realise that the world is going through its own crisis, and economic crises are not something unique to Sri Lanka at this particular point in time.

In a global context, economies have the opportunity to be actors or authors in their respective stories. Sri Lanka has the opportunity to be the author of the country’s economic journey by bringing together competent individuals who can contribute towards the betterment of the situation. At Stax, we are firm believers that the grass is greener where you water it and knowledge businesses are a great way to empower, mobilise and up-skill the talent pool we have available to us in this country and put them to use towards national prosperity.

Q: Why are you focused on hiring talent from Sri Lanka?

Kumudu: Sri Lanka has well-suited talent for the knowledge industry that we operate in. We have access to great technical skills across competencies including some niche fields like analytics and financial modeling.

Overall, Sri Lankans are versatile and able to adapt to change quickly with a permeable cultural sensitivity that makes it easy to work with global stakeholders. Additionally, our inherent hospitality is a great fit for the service industry.

We continue to have great success with our hires in Sri Lanka and we continue to find performers who are able to take on the challenges of our work.

Q: You’ve made it your business to be in the know; what does the next decade hold for the world?

Kumudu: We believe that Asia-centred growth will be the play for the decade. The U.S. and European regions will make significant contributions but the emergence of India as a globally relevant economic player will define the decade. Indian heritage leadership in Western markets will play a role in how the Indian growth story will pan out.

We are undoubtedly fortunate to be geo-politically positioned the way we are. Sri Lanka has a large opportunity to do for South Asia what Singapore achieved for the Eastern Asian region. There is significant potential to be realised.

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