Clever Consulting

The Clever Consulting Company (CCC) was first established in October 2000 when four business school finance faculty decided to try and do it for realand also make a lot more money!. The firm was not entirely independent. The idea was created with the support of their universitys business development scheme, whereby for an equity stake and some supervisory influence, the university provided the opportunity, continued association with the university name and some basic facilities. The original operation comprised the four partners, four consultants (all recent MBA graduates who had been taught by the academics), three analysts (recent first degree graduates from the university) and one person providing administrative and secretarial support. At the start of the venture, none of the partners were firmly established as the leader, they were all first among equals. During the first 18 months everything went incredibly smoothlythe initial proposition was to leverage our academic credibility and functional expertise in order to give us a niche position and the market responded. We began with one big bank as a client but very quickly we undertook two or three smallish projects for other clients who without exception came back to us with larger and longer projects. No one minded putting in the hourswhich frankly were often crazy.I guess that in those early days commitment and creativity drove growth (Managing Partner). By the end of the second full year of trading however, it became clear that the firms flat managerial structure was unsustainable, especially in their dealings with the university parent and other equity holders. Although the firm continued to grow organically, November 2002 saw the firm enter into a prolonged period of leadership crisis. Eventually one of the partners was firmly established as the Managing Partner but it was not a smooth transition. For nearly a year there was personal and professional conflict within the firm making it difficult for the firm to address strategic growth and corresponding structural issues. Evidence for the impact of this crisis on CCCs business can be seen in the annual revenue figures. The years immediately before the crisis saw growth of 55 per cent and 66 per cent whereas during this difficult period growth fell to 17 per cent. Whilst apparently respectable, this was considerably less than their growth target and at the same time a number of operational initiatives floundered. Recruitment, training and promotions became difficult and plans to develop a web-based infrastructure for capturing project knowledge were postponed indefinitely. The crisis of leadership was only partially resolved when, in April 1997, two of the founding partners returned to full-time academia in different institutions. A year later the third founding partner retired. During the last two financial years, CCCs revenues have grown by an impressive 93 per cent and 113 per cent, arguably a demonstration of the benefits of clear managerial direction. Unfortunately, this level of growth has simply served to reinforce many of the structural and infra-structural challenges ignored over the last two years. What kind of consulting operation was CCC and what kind did it want to become? It seemed clear that depending on the type of work the firm undertook/received, different structures would be needed with a range of operational implications. For instance, the more procedural or routine consulting work becomes the higher the analyst/partner ratio. Consequently intense competition for career progression up to partner level is created and staff turnover in this type of firm is very high. If staff turnover is high then preventing valuable knowledge from leaking out of the firm becomes critical. Similarly, too complicated a mix of different types of assignments can make capacity planning

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Slack and Lewis, Operations Strategy, 2nd Edition, Instructors Manual

extremely complex etc. Whilst the Managing Partner had very clear views on the nature of the dilemma they faced, she was less certain about the strategy they should follow. I love this business and believe that we have created something special here. I want to build a firm that will still be here in 10 years time but I know that in order to develop truly sustainable competitive advantage we have to get over a number of obstacles..Operationally we need to decide what kind of consulting firm we are going to be. I read a book recently that summed it up very effectively. There is the kind of consulting work that comprises a large grey matter quotient; the work with a large grey hair quotient; and work where the problem is recognised, well understood and just needs bright people resource thrown at it. I believe that we began life as a combination of the first two but over timeand with our senior people problemsI have tried to steer us towards the first rather than second mode of operation. The future might be different again?

173 Nigel Slack and Michael Lewis 2008