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»Time To Simplify and Get Organized (Well, At Least Your Cloud Services)
The practice of adding cloud services in silos and based on specific department needs often results in overlapping and many different contracts with the same vendors.
»Riding the Waves of Healthcare Risk
The modern healthcare system is much like the ocean—stormy, choppy, and hostile at times, soothing, calm and inviting at others. For surfers, the more waves you go for, the more you will catch, and the more likely you’ll “wipe-out.”
»The Department of Defense Wants a New Mantra
“Do more with less.” It’s become a tired refrain that U.S. Department of Defense leadership is all too familiar with hearing from all directions, whether it is their direct superiors, Congress, or the Executive.
»Things Go Wrong
Things go wrong. Anyone who plays poker knows this. One moment you’re on the verge of a royal flush, and the next, you pull a six of diamonds, and you’re called. Things do indeed go wrong.
»The Next Big Thing
Consultants are always looking for the next big thing, the innovation that will see clients storming through their gates, bypassing pesky procurement departments, and writing blank checks for the magic mousetrap that whitens and brightens and cleans windows, too.
»JP Morgan and The Whale: A Parable
After a tumultuous period of banking hyper-regulation after 2008, no one would have suspected in 2012 that JP Morgan, the world’s largest bank, had ineffective controls in place that left the company flat-footed when its “rogue” trader had taken untenable, long-term positions on Credit Default Swaps.
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»Marriott Goes Big in NYC
Marriott International, Inc. and G Holdings opened what they’re calling an “iconic addition” to the New York skyline, a combined 378-room Courtyard hotel and 261-suite Residence Inn hotel in midtown Manhattan. The $320 million, 68-story property is the tallest single-use hotel in North America.
»Best Places to Stay: Travel Bounces Back
Consultants are on the road again, at least according to the results of our annual Best Places to Stay survey.
»FAA: ‘Staffing Challenges’ Causing Delays
In case you haven’t noticed, non-weather related delays at U.S. airports are on the rise. (And I know you’ve noticed that weather-related delays are definitely on the rise.)
»Hilton’s Building Boom
Coming off a whirlwind 2012, Hilton Worldwide is the fastest growing global hospitality company by number of rooms.
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»Excerpt: Procurement as Productivity
The following is an excerpt from the book Procurement 20/20: Supply Entrepreneurship in a Changing World by a quartet of McKinsey & Company consultants—Peter Spiller, Nicolas Reinecke, Drew Ungerman and Henrique Teixera.
»Review: The Risk-Driven Business Model
Most companies focus their innovation on new products.
»Review: Lead Positive
Today’s business leaders face intense pressure to deliver results in an uncertain, chaotic, and high-stress business environment.
»Review: Step Up
No matter what your title or place in the organization chart, you have the potential to be a leader.
»The Three Rules
Earlier this year, Deloitte Consulting’s Mumtaz Ahmed and Michael Raynor published The Three Rules: How Exceptional Companies Think. The authors set out to answer what was, in their mind, the ultimate business question—how do some companies achieve exceptional performance over the long haul?
»Thinking in New Boxes
Creativity is key if you are to thrive in a time of accelerating change, according to The Boston Consulting Group’s Luc De Brabandere and Alan Iny.
»One on One with Ed Hess, Part Two
In the last edition of
Consulting's One-on-One, we discussed why "Grow or Die" is bad advice for clients. This week, we continue the conversation with Ed Hess, a former Arthur Andersen strategy consultant and current professor at the University of Virginia's Darden Graduate School of Business, by turning the lens on consulting firms.Consulting: Turning the table to our own companies, “grow or die” is just as prevalent across consulting firms. Without growth, there’s no need to make new hires. Without new hires, there’s no pressure to force promotions up the pyramid. How do we overcome this?
Professional service firms are in a very difficult situation. The bottom line is that if you don’t have growth, you’re not making more partners. And this cuts to most firms’ underlying business model—the very basis on which the business was built [i.e., to continually add partners that will eventually buy out your shares]. The business model of adding new partners every year was easy to rationalize when you were growing revenue and were growing profit consistently. In today’s economy, where most firms aren’t growing—or, at least, not by very much—the model has to change. You either stop or significantly slow promotions, or ask the existing partners to give up a part of their stake in the firm in hopes that by adding new partners it will grow the size of the pie. To answer that question, partners have to really go back and revisit questions like, “to what purpose does this business exist?” and “are we doing this for more than just money?” Too often I see companies feeling forced to grow at any cost. They deal with the problem by buying business through significant discounted rates. And I have to wonder once a firm sends that signal to clients, if the business will ever return to historic margins.Consulting: What should partners do instead?
Every firm has a different culture. But they’ve got to ask themselves, “what’s the impact of these choices on our culture?” and “what do we want our culture to be?” Growing at the cost of the firm’s long-term success isn’t wise. But it’s rare to find the firm that has a strong enough culture in which partners are willing to take significant cuts in compensation for years for the betterment of the business. As smart as it may be long term, few firm leaders are asking themselves “what type of firm are we going to be over the next five to 10 years? Are we building a strong firm? Do we truly want to be the best place to get professional training in an environment that encourages work-life balance? Are we willing to make the sacrifices to make that happen?”Consulting: What kinds of conversations should successful firms have at their partner meetings?
Partners need to be honest with each other and decide whether they’re willing to take, say, a 20 percent cut in pay and commit to building the firm together. If not, then the next step may be to let some of the partners go. Those types of honest discussions come down to an organization’s values more so than finances. Going through that process and coming to a decision that can be explained to the entire organization will put you in better stead than an autocratic decision. If you get to the point where everyone is willing to take a 20 percent cut to keep all of the partners, then you have to address issues, like: “How do we add additional value to our clients?” and “how can we aggressively go out and bring in new clients?” Before, clients walked in the door. Now, we have to look at how we are pursuing client acquisition and expanding our services to produce reasonable margins. Everything has to be reassessed.Consulting: What’s the most challenging part of that process?
It’s difficult emotionally and intellectually. It’s very hard to have very open discussions about what the partnership can afford and what they’re willing to do. But whatever the decision, the partnership has to be honest with the staff. Nothing kills culture faster or more completely than the destruction of trust. It’s human nature for leaders to think, and then say, “If we can just hold it together, we can do better.” No one wants to have difficult decisions. The fact is that you have to be honest and truthful. You have to be transparent. You can’t say that this round of layoffs is it, because then when another round comes you’re dead. Everyone wants to put salve over it. But that’s what leadership is all about. Tough times test leadership.Consulting: But the truth may be that you just don’t know what the future holds. How do you share that with your staff without discouraging them?
My advice is to drop any sense of arrogance and be willing to admit you don’t know how to get out of this. A good sailor knows where they want to go, but often has to make adjustments. It doesn’t mean you’re sunk. It does mean coming clean with your staff by saying, “We’ve never been in this situation, but we’re all in this together.” It takes an emotional maturing and emotional awareness that a lot of professionals lack. Is it doable? Yes. Is it hard? Yes. Welcome to the real world.