One on One With CEB's Tom Monahan

Tom Monahan, Chairman and CEO, CEB Over the last three decades, CEB has seen tremendous, steady growth and double-digit profitability, advising a diverse client list on how to best keep up with an ever-changing industry and constantly shifting demands and expectations. CEB’s success in this arena has Chairman and CEO Tom Monahan call his firm, “The Most Influential Company You’ve Never Heard Of.” And they’re just getting warmed up. Following a large acquisition, Monahan says 2013 will see CEB lead the analytic revolution in the area of Human Resources. Monahan spoke with us about the challenges facing executives on all levels, and the need to boost productivity even as staff meets its maximum capacity to take on new work. Monahan sat down with Consulting One on One to share some of his insights about emerging trends, opportunities and challenges in the marketplace, and why he sees a need for a re-tooling of the industry itself.

Consulting: What are some of the emerging trends you’re seeing in the global consulting market?

Monahan: CEB’s installed base includes 85 percent of the Fortune 500 and the majority of similarly sized large cap companies globally. When we look across that universe, we see three trends emerging: One, an increasing urgency for solutions that are proven and can be implemented immediately— Organizations want and need to embrace out-of-the-box thinking, but they don’t want to reinvent the wheel. Whenever and wherever possible, executives want to leverage peer learnings to save time and money rather than dedicating precious staff resources searching for new answers. Two, a deepening desire to bring science to practices that have been traditionally accepted as “art”—We see this manifesting across such core functions as talent management, compliance and sales. Perhaps the most notable of these for us has been the resonance of CEB’s sales effectiveness work and the rapid global adoption of our Challenger Selling Model, which demonstrates that the ideal sales rep can be identified and cultivated through the application of human capital analytics and disciplined data analysis. And three, an enterprise-wide realization that talent is the biggest single driver of corporate performance and therefore, growth—Across the C-suite, executives are striving to meet increasing performance expectations without traditional tools, like hiring, at their disposal. To overcome these obstacles, they are turning to new developments in human capital that will enable increased team productivity.

Consulting: How is CEB rising to meet the new challenges presented by these trends?

Monahan: Over the last 30 years, CEB has enjoyed success through ongoing organic growth and double-digit profitability. This is because our model allows us to tap into our more than 16,000 senior executive members representing more than 10,000 companies, surfacing emerging challenges early and identifying the most effective remedies. Every day, we’re putting forward proven practices that result in real cost savings and are backed by a level of rigor that gives our members both the confidence and the capabilities to deploy them internally. And we’re still evolving. In 2013 we’re committed to leading the analytic revolution in HR and to relentlessly pursuing the delivery of even greater business value for members through new IP and actionable solutions that will help them transform operations and achieve organizational goals.

On the HR analytics front we’ve made the largest acquisition in our history and have begun integrating the new assets SHL brings to bear. Our combined experience and science-based approach to talent management makes us uniquely equipped to help members manage their most important asset—their people—will the same acumen and rigor they apply to other critical corporate resources. We’re also investing in our own brand (we may be the most influential company you’ve never heard of!) to ensure that when our members suggest implementing CEB solutions there’s universal awareness and agreement in the Board room.

Consulting: Can you speak to why you think there’s a need for reinvention and re-tooling within the industry?

Monahan: The order of the day (and the foreseeable days to come) is slow growth both in developed and key emerging markets. The sluggish economy coupled with an increasingly erratic work environment is forcing clients to approach their operations and identify needs differently. Companies are performing microsurgery almost daily in an effort optimize employee performance, boost profit and drive growth. Since most of the growth organizations are realizing today is a direct result of increased labor productivity, we’re also seeing a growing demand across the C-suite for more effective talent management practices. Part of this is because the nature of work itself is changing. Our recent research on employee productivity suggests that staff is reaching a limit to their workload, but executives still need a 20 percent lift in workforce productivity. As companies learn to identify and cultivate the skills of employees most likely to help them achieve stronger performance, the consulting industry will need to adapt to this new dynamic and embrace the increasingly crucial role talent will play across all facets of an organization.

Moreover, companies’ love affair with big data has proven fickle. It’s no coincidence that the organizations with the biggest IT and analytics budgets over the last five years are the ones that have gotten into the most trouble. The influx of data in business has made nearly every employee a knowledge worker, but few have the skills necessary to separate signal from noise, leading to lower than expected returns on analytics investments. While companies will continue to invest in big data they will need outside counselors who understand that analytics ROI is about more than crunching the right numbers.

Consulting: What are some of the opportunities being created by the direction the consulting market is headed, and how can they be taken advantage of?

Monahan: As executives struggle to bring rigor to core functions where it does not yet exist, they’ll seek outside guidance from a variety of sources. Whether they’re tackling sales productivity, employee engagement, corporate ethics or disruptive innovation, the complexity of the work environment and a potentially unmanageable influx of data will further complicate their efforts. In response, CEB will focus on delivering the insights and actionable solutions our members need to continue to develop their capabilities and realize their full growth potential. We’ll do this by helping them surface and apply the science that fuels what we believe to be premier management practice.