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Walter Kiechel on the Strategy Revolution

May 5, 2010 By Leave a Comment

Walter KiechelWalter Kiechel is the author of The Lords of Strategy: The Secret Intellectual History of the New Corporate World, which recounts the rise of the big consulting firms and how they came to influence every aspect of the competitive behavior of today’s corporations.

Keichel is a former managing editor at Fortune magazine, and was also the editorial director of Harvard Business Publishing from 1998 to 2002. I asked him about the impact of the ideas of pioneering strategy consultants and academics, and what’s next in the evolution of business ideas.

Read my interview with Walter Kiechel.

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What’s Happening in the IT Consulting Market

April 6, 2010 By Leave a Comment

In this month’s issue, we wanted to get a handle on what’s happening in the IT consulting market, so we talked to Mark Livingston, Senior Vice President of Cognizant Business Consulting.

Livingston is a long-time consultant, having done stints at AT Kearny and Deloitte before signing on to lead Cognizant’s consulting practice. We asked him about the trends he’s observing in the market, and what it takes for consultants to succeed in the current environment.

Read our interview with Mark Livingston.

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The Future of Corporate Responsibility

March 9, 2010 By Leave a Comment

In this month’s issue of Management Consulting News, we interview Jeffrey Hollender, Chairman of Seventh Generation and author of The Responsibility Revolution: How the Next Generation of Businesses Will Win. Hollender tells us why corporate responsibility has become increasingly important for business success.

You’ll also find articles on client trust, authentic communication, and why your client’s frontline staff may be underperforming. Plus, we peek into the crystal ball about consulting in 2010, and let you know about some upcoming learning events for consultants.

As always, we keep you posted on what’s happening in the professional services industry with the MCNews 12 Index report. Read why things were looking up for the Index last month.

Read this month’s issue.

Filed Under: Industry Trends, Management Consulting News Tagged With: ,

The Bottom-Line Impact of Frontline Staff

March 7, 2010 By Leave a Comment

Given the importance of the customer’s experience to long-term business success, it’s alarming that more than two-thirds of senior executives are only “somewhat satisfied” or “not at all satisfied” with the performance of their frontline managers. What’s worse, more than 80 percent of frontline managers say they are not satisfied with their own performance.

The problem, according to researchers at McKinsey & Company, is that most frontline managers are one part bureaucrat and one part fire fighter. They spend their time on either administrative tasks or solving the latest crisis. They devote too little time to coaching their employees, anticipating problems, or building their own skills. In fact, many organizations offer little or no professional development for their frontline managers in essential leadership skills.

Consultants who focus on operations improvement and organizational effectiveness can make a compelling case for helping clients improve the performance of frontline employees. Small improvements in frontline operations can deliver big benefits in customer retention, satisfaction, and word-of-mouth marketing. With consumers continuing to demand more for less, the time is right for clients to take this issue on.

You can read more about this in the McKinsey Quarterly. There’s no cost, but you do need to be a subscriber to see the full report.

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2010 Forecast for Consulting

March 5, 2010 By 1 Comment

Researchers at Robert W. Baird & Co. asked more than 500 consultants what’s ahead for consulting in 2010. The respondents offered these four perspectives on the rest of the year:

1. Don’t be surprised if the market turns around in 2010. It’s not clear, though, if the increase in business for consultants means a return to a stronger market. It’s possible that new spending is focused on initiatives clients just can’t delay any longer.

2. Budgets will remain tight, in spite of expected growth. Consultants cautioned that their clients’ public statements have been optimistic, but increased budgets have not necessarily followed. Clients still appear to be taking a wait-and-see attitude about spending on consultants.

3. Billing rates aren’t likely to be threatened. Consultants are bullish on the direction of billing rates, as fears about significant price pressure from the lower end of the market proved to be unfounded.

4. Sustained growth is still in the future. Consultants believe that the industry won’t change materially until the economy shows more signs of life. Banks must reopen the credit markets and businesses must put together a record of strong performance before consultants expect a real recovery in spending.

Expectations for the industry have improved for 2010, but that optimism must be kept in perspective. When compared to 2009, many consultants believe that there’s nowhere to go but up.

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How’s the Market for Services Firms?

October 7, 2009 By 1 Comment

In September, the bulls pushed stock prices higher, including for professional services firms in the MCNews 12 Index–in spite of mixed economic news.

After improving in August, US consumer confidence dipped in September. Unemployment levels are inching toward 10 percent in the US, and the auto industry suffered a hefty sales decline.

Still, although skittish in the final days of September, the market posted an encouraging performance.

The MCNews 12 Index shared in the market’s overall rise, gaining 1.1 percent for the month. For the year so far, the Index has returned 20.3 percent.

mcnewschart

The services industry never stands pat, and September was no exception. Perot Systems has agreed to be gobbled up by Dell Computer in a transaction valued at approximately $3.9 billion. Dell founder and CEO, Michael Dell, commented that “…the acquisition makes such great sense because of the obvious ways our businesses complement each other.” The market has sliced 5 percent from Dell’s share price since the acquisition announcement. As with any complex merger, it always looks easier on paper.

It’s likely that Dell’s new competitors will redouble their marketing efforts in Perot’s areas of focus, like health care. While Dell and Perot executives sort out who will do what once the merger dust settles, competitors will try to scoop up new clients.

In another sign of consolidation in the IT services industry, Xerox announced that it had reached a deal to acquire Affiliated Computer Services (ACS) for $6.4 billion. Xerox executives called the move “game changing,” but the market hasn’t yet agreed. Shares of Xerox have lost more than 15 percent since the announcement.

Finally, Accenture announced fiscal 2009 fourth-quarter results, and business remains challenging. Net revenue for the quarter was down 14 percent in dollars and 7 percent in local currency. If you ignore a restructuring charge, earnings per share were $0.63, a 6 percent decrease from a year ago.

In spite of these results, the market has rewarded Accenture investors with a 19 percent YTD return. Investors appear optimistic that Accenture has weathered the economic storm and is poised to grow as business spending on services rebounds.

Learn more about the MCNews12 Index.

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A Blog for Consultants

July 13, 2009 By 1 Comment

Fiona Czerniawska, a global expert on the consulting industry, has launched a new blog (Source for Consulting) focused on all aspects of the business, and it is well worth reading. For example, her post, “Don’t ask, don’t tell,” looks at how the recession could change the way clients buy consulting services, and describes a simple idea for using greater transparency to get better outcomes.

Another post, “The great divide?,” argues that a schism is growing in the consulting industry, separating “staff substitution” from bona fide consulting, and challenging consulting firms to decide what business they are really in.

Fiona’s work is always insightful, as her new blog shows. It’s one you’ll want in your RSS feed. You can find here.

Filed Under: Consulting Process, Industry Trends, Managing Your Business Tagged With: , , ,

Goodbye Booz Allen Hamilton

June 11, 2008 By Leave a Comment

After months of anticipation, Booz Allen Hamilton (BAH) recently announced that it would sell its US government consulting practice to The Carlyle Group for $2.54 billion, which is roughly two times the revenue for that BAH practice.

BAH is retaining its commercial practice, and rebranding it as Booz and Company. Ads in the New York Times have been hailing the new firm.

Paul Collins, consulting sector M&A expert from Equiteq, says that the transaction demonstrates “the difficulty that Management Consulting firms have managing pure consulting and general business services under the same roof.”

It took BAH a number of years to build a profitable business services practice to serve the US government. That practice, Collins points out, has a very different “staff profile, culture, and competitive market than the original BAH firm.”

Only time will tell if this transaction is good for BAH clients, partners, and employees. Collins estimates that the 3,300 professionals remaining in the new Booz and Company must produce conservatively at least $1 billion in revenue to keep pace with past performance.

Practitioners in the government practice face an even greater revenue challenge. But they can look forward to a potential IPO in the future.

As Booz and Company reinvents itself, the consulting industry’s future is morphing before our eyes.

Every person who helped build that storied firm to its place of prominence will mourn the loss. Then, they can move on to the next chapter in building two new firms.

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Sniping at the Big Firms

January 17, 2008 By 1 Comment

If you listen to critics who grouse about the big professional services firms, you might be tempted to conclude that large firms succeed because of their substantial “advantages” in the market. But too many critics discount the success of large firms and lose sight of the valuable lessons any consultant can learn from the big players.

Look at many of their balance sheets and you’ll find a solid base of capital, few liabilities, and enviable cash flow. By most other performance measures, too, large firms are thriving. Revenue and profit per employee are strong, gross margins are holding steady, and the backlog of sold work is to die for. They must be doing something right.

This month in the Guerrilla Consultant, we look beyond the stereotypes and discuss how and why large firms manage to turn in consistently strong business performance.

Read this month’s issue.

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The Services Clients Buy

November 26, 2007 By 1 Comment

In a 2007 survey, researchers for Global Services Media wanted to know the answers to these questions: What services are most highly used by clients? And what is their corresponding level of satisfaction?

The study focused on the 25 most popular management trends and tools, including Six Sigma, outsourcing, strategic planning, benchmarking, customer relationship management (CRM), growth strategy tools, and knowledge management, to name a few.

The services with the highest rate of use and client satisfaction turned out to be: strategic planning, CRM, and customer segmentation. According to the 1,221 survey respondents, services that haven’t really caught on include corporate blogs and RFID.

Clients have tested the waters and used outside service providers to help with knowledge management and balanced scorecard initiatives, but client satisfaction remains low for those services.

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