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Our management consultancy columnist, Mick James, this week talks to a UK vice president at A.T.Kearney about the newly independent firm’s growth prospects.
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Mastering the art of strategy
Last time we looked at A.T. Kearney, the venerable consulting firm was entering a new phase of its existence after finally completing the long-drawn out process of buying itself back from EDS.
Now, with that major distraction out of the way, the firm is reestablishing it own identity—and with some success, according to Mark Page, a vice president of A.T. Kearney in the UK.
“So far it’s gone better than plan,” he says. “But that may be partly a tribute to our conservative planning.”
What Kearney has seen is an upsurge in utilization.
“People being busy has a tremendous impact on a consultancy firm—when everybody’s busy they might be working more but it improves morale no end,” he says. “People are also not tied up in internal discussions or wondering where they might be in six months time–that’s really kicked in in terms of the top line.”
While Page acknowledges that Kearney may have benefited from the “market tailwind” driving the whole market at the moment, he attributes most of the upswing to Kearney’s renewed focus as an independent entity.
“We also focused hard late last year on improving our cost structure to be in line with or better than our competitors,” he says.
Looking back at the first months of independence, Page says: “We haven’t opened the champagne yet, but it all feels well on track. So far this year we haven’t had a single person leave the UK business, which is a unique circumstance for us.”
This is despite what he describes as a “wave of headhunting” unleashed by the Big Four. Kearney itself has made some additions to its roster which has taken it to 185 partners compared to 173 at the time of the MBO. Although the firm has begun looking at more junior recruitment, activity has mainly been to fill pressing gaps at the senior level rather than join the current feeding frenzy for mid to senior-level consultants
“It’s always very interesting to review outside talent but it’s not always easy for people to make the move,” says Page. “It’s hard to judge how well even a genuinely good consultant will do in a different environment. We also feel that the people who’ve made the journey with us are the ones we should stick with and that we should only very selectively promote over their heads.”
In terms of market positioning Page feels that Kearney is very much in a “sweet spot” where operations meet strategy, and where there is a gap between the pure strategy houses and the major process and IT consultancies.
These issues are firmly in the mind of client top management,” he says. “Say you need to get growth going in your mature countries—is that because of problems with your sales force processes or your distribution strategy—you can no longer distinguish between strategy and operations.”
Where Kearney rarely ventures is in taking over the management of actual implementation.
“The vast majority of clients don’t want us to be doing the implementation, that’s their role,” he says. “In experience what clients want is the ability to project manage, to direct, to coach them on the change process.”
“Client pull” is also bringing Kearney more into ensuring the success of outsourcing and offshoring projects.
“Everybody knows they need to make these outsourcing deals work, everybody recognizes the need to do much more robust diagnostic work before you get into contract negotiation and implementation. Clients want someone who can work at senior management level, and who understands how their business works, not just financially but from a process point of view.”
At the moment Kearney is keeping itself busy working mainly within its existing client base, although major new wins have started to come, notably in the US.
“Our clients all say they are cutting their consultancy budgets,” says Page, “but we’ve managed to maintain and grow share. We’re always pleased with our performance in competitive bids; we have a higher win rate than most.”
A key focus for growth for the firm will be extending its existing footprint into new geographies such as the Middle East and India.
“We need to grow to remain competitive,” says Page. “We opened in India at the right time, for example. If we weren’t there today, our ability to provide service to our multinational clients who are now operating there would be limited.”
As well as looking at growing sectors like healthcare Page also says there’s a lot of work to be done cross-fertilizing between sectors.
“It’s interesting to see how you can move from one to the other,” he says.” For example from other government work to healthcare—there are natural flows across the boundaries, just as our media work is important for broadband telecoms clients,”
The other side of the growth coin is to have attractive career prospects for staff.
“It doesn’t have to be 20 per cent pare annum to achieve that,” says Page. “It can be high single digits—we’re not looking suddenly to treble in size.”
Kearney may not be targeting explosive growth, but that’s in line with their sober attitude to the market. Nor are they going over the top in terms of blowing their own trumpet, but in terms of timing and market positioning they seem to have got it right. And if strategy is the art of being in the right place at the right time, they deserve to be seen as masters of the art.
All views expressed in this article are those of Mick James and do not necessarily reflect the views of Top-Consultant.com and Consultant-News.com.
Contact Mick with your views or suggestions at: [email protected]
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