| | By Mick James
One of the dangers of
writing about an
industry for any length
of time is that it’s
very easy to miss the
wood for the trees, to
get stuck in the detail
and not notice that the
well-worn paradigms that
have served you for
years are, well, worn
out.
For some time now
we’ve been marvelling at
the number and variety
of new consulting
entities and approaches
to consultancy that have
sprung up over the last
couple of years. While
there’s never been
anything that unusual
about senior people
leaving big consultancy
firms and setting up on
their own, the scale on
which this is
happening—and the growth
these firms are
achieving—makes me
wonder if there isn’t a
fundamental shift going
on.
One of the
conversations which set
this train of thought in
motion was with Molten,
a young firm whose
founders left their “Big
Four” backgrounds as
consultancy was largely
absorbed by the systems
integration and
outsourcing industry.
“We did feel that
consultancy wasn’t the
core any more,” says
joint managing director
Rory Colfer. “Also, a
lot of people moved
away, so to a certain
extent we couldn’t do
the same work as we did
before.”
The new business was
set up with the
intention of
concentrating on a small | |
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| | range of industries and
also restricted to
higher-end consulting.
“We decided to focus
on energy, financial
services and on project
management as well as
change and
communications
management,” says
Colfer. “So far we’ve
been very successful in
those areas.”
Molten has grown
rapidly—there are now 20
staff in London, 10 in
Moscow, and a Bahrain
office has just opened.
But this growth has been
achieved under very
strict financial
management: “We don’t
have shareholders, we
don’t have partners and
we don’t have external
debt,” says Colfer. The
owners of the firm
aren’t paid any more
than anyone else—in fact
it’s less because we
reinvest in organic
growth.”
While the company has
ambitious growth plans,
the intention is always
to be cash positive and
never to put the
existing business at
risk. In fact, Colfer
claims, the firm could
keep going for eight
months even if all
business dried up
tomorrow.
Another unusual
feature is that the firm
has strict views on the
viable size of its
operating units: “We
want to expand
geographically rather
than in one country,”
says Colfer. “But we’re
limiting ourselves to 60
in any one location.”
“The firm’s
geographical
spread—London, Moscow,
Bahrain—may also seem a | |
| |
| | For example, if you
want to set up a bank
account, you are invited
into the bank to be
interviewed; they let
you know whether you’ve
been successful or not.”
Recruitment is also a
major challenge in these
markets: “A lot of
businesses want to go
into these regions but
face the challenge of
different languages and
different cultures,”
says joint MD Irene
Molodtsov. “We go for an
intense ratio of locals
to expats, five locals
to one expat. That gives
us more of a challenge
recruiting locally, but
we have recruited some
very, very senior people
such as a former COO of
Atos in the Middle
East.”
“For us it’s not just
getting the right
mixture of hard and soft
skills,” she adds. “On a
‘Big Four’ project, if
things aren’t working
you can take one person
out, and put another
person in. We don’t have
that big brand name—we
can’t afford to have any
bad seeds.”
Molten doesn’t use
contractors or
associates, preferring
to recruit very senior,
established consultants.
“Money is to be made
at the large firm level
by chucking in a large
team,” says Molodtsov.
”We go for senior people
who can make the
difference. As a small
business our reward
level has got to be
higher than you’d get in
the Big Four—for senior
people there’s a fine
balance between the risk
of being in a smaller
business against the | |
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| | rewards of success.”
This focus on senior
level recruitment has
led to some major client
wins, says Colfer.
“With significant
clients, the questions
are how do you get in
and how do you grow? The
answer to the first is
on the back of
relationships that
already exist and to the
second is through a
relentless focus on
quality. As a new
consulting business we
recruit people who have
very, very high quality
relationships—relationshi
p management is the
whole game in
consultancy.”
As a result the firm
is now cultivating
relationships with a
number of “Big Four”
consultancies and
working with them in
programme management and
on major bids.
Which brings me back
to the discarding of
rusty paradigms. One
that persisted for a
long time was that small
consultancies tended to
work for smaller firms;
another that it was more
or less impossible—or at
least extremely
unrewarding—to build a
medium-sized
consultancy. Could we be
seeing the start of a
wholesale move of senior
talent into smaller
entities, which
nevertheless continue to
work with the big
consultancies, which
will retain the large
scale human resources
and infrastructure? And
if so what will we call
this emerging sector? | |
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