| | By Mick James
It’s been over two
years since the
venerable consulting
firm A.T. Kearney
completed the management
buyout from EDS that
made it independent once
again. Since then the
firm has probably
enjoyed being out of the
media spotlight, but
it’s now keen to tell
the world about its
growth plans. I spoke to
Phil Dunne, the partner
in charge of recruitment
(who also heads the
automotive and
transaction services
practices), about why
the firm is feeling so
bullish.
“The MBO caused a lot
of uncertainty, and we
lost quite a few good
people during those
times,” he says. “But
everyone who did stay
was totally committed to
Kearney – it unleashed a
lot of entrepreneurial
spirit.”
The firm also spent
some time sorting out
its cost base, before
launching its growth
drive in 2007.
“Our 2015 vision is
that by then we will
have doubled in size –
that’s our aspiration,”
says Dunne. “In 2007 we
grew by 10%; this year
we’re aiming for 15%. We
were concerned that the
second half of the year
might not hold up but | |
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| | we’re still recruiting.”
Dunne is confident
that A.T. Kearney can
reach these targets
through organic growth.
“We looked at a number
of scenarios, one of
which was aggressive
growth through
acquisition, but it’s
not the route we wanted
to go down,” he says.
“We decided we could get
the right growth
organically, without all
the management
disruption, dilution of
brand and cultural
disruption.”
Part of A.T.
Kearney’s strategy has
been to reconstruct its
alumni network and reach
out to former
consultants who now work
in industry, although in
general the firm avoids
re-recruiting
consultants who have
joined other firms.
“I like the fact that
the people who stayed
with us when things got
tough stayed for the
right reasons,” says
Dunne.
Otherwise the firm
relies on word of mouth
and still maintains
close contacts with the
major business schools.
“We recruit at all
levels except partner,”
he says. “Our policy
there is that we would
rather grow people up
through the business, to | |
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| | year than last year,”
says Dunne. “The focus
now is more on the
portfolio companies,
which plays to our
strengths, helping them
improve their businesses
for eventual sell-off.”
Dunne says there has
been a shift in the
emphasis in private
equity work, even in due
diligence work.
“Previously it was
all about ‘Where are the
profits, what can we
knock off the price?’,”
he says. “Now it’s
changed to ‘Where are
the upsides, where can
we justify paying more
to win the deal?’”
This focus on the
operational upside plays
to A.T. Kearney’s
strengths, allowing it
to involve industry
experts much more in
transactional work.
Similarly, with the
credit crunch
eliminating access to
cheap capital, clients
are refocusing on issues
such as working capital.
“We’ve got a good
mix,” says Dunne. “We
still do a lot of
strategy work as well,
but we always try to
link that back to the
operations of the
business.”
A.T. Kearney has
repositioned itself to
move away from some of | |
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| | the more commoditised
areas it used to touch
on, leaving that to
rivals. And as far as
client attitudes go,
Dunne says he’s yet to
see any signs of panic,
but rather a period of
reappraisal, which again
plays to A.T. Kearney’s
strengths.
“There isn’t a panic
out there, there’s no
slash-and-burn,
take-costs-out-immediatel
y attitude,” he says.
“It’s more about ‘Let’s
optimise what we’ve got,
make sure we’ve got the
right products, the
right customers in our
portfolios’. It’s pause
rather than panic.”
The renaissance of
A.T. Kearney is one of
the more encouraging
stories in recent years,
not least because it
points to what may be a
sea-change in the way
consultancy operates in
relation to economic
cycles. No longer
associated just with
growth, consultants are
increasingly working on
the sort of pragmatic,
complicated operational
improvements that
companies often ignore
or postpone when
everything is going
swimmingly. Formerly an
almost viciously
cyclical industry,
consultancy now seems to
be developing strong
counter-cyclical
tendencies. | |
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| | find consultants who are
content-rich, capable
and enthusiastic and
help them grow into the
partner role. It’s less
expensive if you make a
mistake and easier to
integrate them into the
firm.”
As far as the
traditional A.T. Kearney
mix of strategic and
operational consultancy
is concerned, Dunne
doesn’t think that’s
changed much at all,
and, if anything, much
of the recent growth has
been about restoring the
firm’s position in areas
such as financial
services to their
traditional strength.
“In the early 2000s
we probably did more
public-sector work than
we do now,” says Dunne.
“That tends to be larger
transformational
projects, and we tend to
do fewer of those
‘mega-jobs’ nowadays.
Our average project size
is smaller.”
One area where the
firm has increased its
presence is in working
with private equity.
“Even though the
deals aren’t around, we
are doing more work this | |
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