But when the consulting firm making such a boast currently has only 81 employees (53 are consultants) and operates from only two offices — New York and Houston — the same observers might likely query, "What gives?" It's a question that has no one correct answer, but has become increasingly asked as Katzenbach Partners LLC continues to flex its campus recruitment muscle, and win favor with a growing list of clients.
"They have what I think is an amazing ability to have junior people jump in and contribute at a very high level and work pretty much in lock-step — both with the client organization and with their own senior leadership," says Bob Orr, vice president of worldwide organizational effectiveness at Pfizer. Orr's words quickly zero-in on the perennial weak knees of the consulting profession, the joint that connects old talent with new. Here's where KPL's innovation lies, according to Orr, who views KPL's maturing competitive advantage as a cultural one.
"The magic that I see is away from view. There is a kind of translation of what the senior folks are thinking and then the rest of their consulting group just gets it. It's as if it happens in the middle of the night. They get it and they become very productive in putting it to work. That's what I see," the Pfizer executive explains.
Orr's explanation might in itself get lost in translation for those long familiar with the consulting world. After all, doesn't the magic Orr describes boil down to just good teamwork? What's more, hasn't every consulting leader from Edwin Booz on forward sought credit for having set free the collaborative powers of partnership? Make no mistake, the founders of Katzenbach Partners LLC are diligent students of their chosen profession's history, and they today make no secret of the fact that at Katzenbach, what is old is new again.
"What we have tried to do is go back to the original values. The values that speak to less-commercial, more-advisory, client-first — a place where you can do your best work and surround yourself with superb people," says Marc Feigen, one of three KPL founding partners, who readily identifies Marvin Bower (the modern founder of McKinsey & Company) as father — in spirit — of the firm.
When it comes to do-it-yourself genealogy, no one will ever accuse KPL of bottom-feeding. In fact, the founders' grand aspirations for the firm are seldom hidden. (How many six-year-old firms are routinely referred to as an "institution" by their partners?)
New Beginnings
Still, beneath the well-worn wordage there is something refreshingly new about KPL. And if both KPL's clients and hiring prospects are to be believed, this six-year-old firm has been quietly renovating the profession's client service and recruitment models.
"We don't have a business system that requires us to sell large teams in order to make money," explains Niko Canner, another of the firm's founding partners. "We engage with clients over longer periods of time with smaller teams that help drive change at a more natural pace, versus change having to be accelerated because the consultant team is so expensive," says Canner, who estimates the median size of a KPL client team as four people, whereas competing firms often staff teams of between seven and ten people.
Smaller client teams aren't necessarily an innovation, says David Maister, author of Managing the Professional Service Firm. Instead, Maister says KPL's ability to deploy smaller teams may have more to do with the types of work the firm currently performs. "Too often we look for the mechanical solution behind success, but instead what makes the most successful firms successful is the fact that they are led by people with real ideologies," explains Maister, who like Pfizer's Orr suspects KPL's advantage is rooted in its culture.
The firm's modest beginnings are captured in a photo on display in the firm's South Park Avenue offices. The firm's founding partners — Canner, Feigen, and Jon Katzenbach (listed alphabetically) — are pictured in front of a Manhattan brownstone, where KPL during its infancy rented two small rooms previously occupied by a medical doctor. Canner and Feigen leased computers from Dell using their personal credit cards and heisted furniture from family members.
"I think the rent was something like $1,500 a month," says Canner. "Even there, at the point of being a true bootstrap, we were asking, 'What would it take to build something lasting?' We knew that we didn't want any outside investors. As soon as you have outside investors, it's much more difficult to focus on building an institution."
Like Canner, founding partner Feigen can't resist the "I" word when asked about the firm's ambitions.
"My objective is to show up at work when I'm 75 and read the The Wall Street Journal and look around and say, 'Hey, I helped build this.' We don't want to sell it. We want to build an institution."
Clearly, both Feigen and Canner appear to be resolute when it comes to building a lasting franchise. To find the roots of their shared resolve, you need only to turn back a single chapter to when both consultants were partners at Mitchell Madison Group — the meteoric but short-lived consultancy founded in the mid-1990s by a renegade clan of McKinsey consultants. While both men were proud of the $6 million practice they built within MMG, they do not hide their disdain for the firm's cultural shortcomings and the abbreviated vision of its leadership.
"It had a Wild West culture in terms of the internal operation," explains Canner, when asked about such fabled MMG cultural perks as the Thursday night "beer cart." "But we came away from that experience saying, 'If we can combine Mitchell Madison entrepreneurialism — and the campus hiring that enables organic growth — with the professionalism of a McKinsey, it would be a model to grow sustainably a different kind of firm.'"
McKinsey Days
Entrepreneurial ambitions aside, it's clear that no firm has influenced KPL's vision more than McKinsey & Company, the company where KPL's founding partners first crossed paths and pondered the future of organizations.
Today, the partners continue to converse on the changing nature of organizations and routinely assess the ability of consulting firms to serve clients. It's an assessment that is frequently negative.
According to Feigen, consultants reside largely in two camps: those wielding strategic business acumen and those adept with organizations and people. They are encampments created by consultants for their own convenience, says Feigen, who believes that the majority of clients are being short-changed by consultants who come from a "one-camp" orientation.
"Pretty much every problem has a strategy piece and a people piece, and here's where we knew we could innovate," says Feigen, who more than a decade ago certified his organization credentials when he helped establish the McKinsey change center, a sort of big thinker workshop that brought together clans of renowned intellectuals from all walks of life to ponder the elements of organizational change.
"I sometimes called it the Sid Caesar Show of Shows. We had all these brilliant people in one room. If it were show business, it would be like having Woody Allen, Mel Brooks, and Neil Simon all writing together," says Feigen. Besides attracting intellectuals, the change center was more or less responsible for bringing together the people responsible for laying KPL's cornerstone. For it was here that Niko Canner would cut his teeth in the consulting world at the tender age of 23 and where he first worked beside the entrepreneurially minded Feigen, who at the age of 32 was on a quest to arm McKinsey partners with new organizational thinking. Not unlike other quests for innovation within the firm, the change center hit a number of snags.
Recalls Canner: "The center simply didn't fit the way McKinsey staffed teams, the way they managed client relationships, or their culture as far as what type of work was admired largely within the firm goes." The center did have influential admirers, however, and one of these was a McKinsey director by the name of Jon Katzenbach.
"Katz introduced me to the president of Mobil," recalls Feigen. "Mobil loved some of the neat stuff we had created at the center, but McKinsey still wasn't using it broadly because the channel didn't know what to do with it."
Nevertheless, the change center's in-house entrepreneur had made a connection with someone who, like Feigen, harbored ambitions to someday build a firm — one where strategic acumen and organizational insights could reside together.
The K is for Professionalism
After more than 35 years with McKinsey, Katzenbach had served in numerous leadership roles within the firm and had only a few years earlier been a runner-up in the election of the firm's managing director.
On his way to being named a partner in the 1960s, Katzenbach had personally served such legendary McKinsey clients as John Paul Getty. But the consultant Katzenbach claims influenced his career the most was Marvin Bower, McKinsey's managing director from 1950 to 1967 and the person today widely credited with establishing management consulting as a profession.
In the 1980s and '90s, Katzenbach's career took a turn when his work in organizational performance led him to author or coauthor six books concerning the use of teams in organizational performance, a body of work in team performance that arguably stands unmatched.
When Dr. John Rowe, CEO of Aetna, was asked recently how the insurance giant came to enlist the services of KPL, a growing — but small — consulting firm, he began with an anecdote about the consultant he calls "Jon."
"He knew the history of Aetna better than we did, and in fact he gave a presentation at a meeting of the senior executives in which he revealed the legacy effect of accomplishments and the pride they brought forth," says Rowe, who was the CEO of Mount Sinai Medical Center in New York City when he first enlisted Katzenbach (see sidebar for interview). "It was really a history presentation, and it showed that he had spent a lot of time understanding the culture of the organization and what its weaknesses were. From there, they were able to develop a highly tailored approach for Aetna."
Having continued to be strongly identified with his organizational work, Katzenbach was more the exception than the norm at McKinsey in the 1990s. For its part, McKinsey had increasingly distanced itself from its organizational roots as it broadened its strategy offerings in response to strategy-minded rivals such as Boston Consulting Group. Besides the distinction his organizational bent presented, gray-haired Katzenbach was also bumping up against the firm's retirement code, a dictum that had compromised the careers of many a star McKinseyite. Several years earlier, the McKinsey director had contemplated the idea of establishing a firm, but had shelved it as new client work piled up.
"It wasn't the right time," explains Katzenbach. But as months turned to years, word of Katzenbach's post- McKinsey ambitions reached Feigen, who then picked up the phone and initiated a discussion with his former colleague that ultimately led to the formation of Katzenbach Partners LLC.
Shortly after the firm was established, Katzenbach recalls visiting with his one-time mentor Marvin Bower, and discussing the new firm with him.
"He thought it was great, that is, as long as we were going to do it the right way," says Katzenbach, which for Bower meant taking a professional approach with clients.
From the start, the Katzenbach name set the firm apart. Having served McKinsey clients for more than 30 years, Katzenbach was an established brand in the CEO suite and one that clearly echoed the professionalism of McKinsey. In the months and years ahead, the Katzenbach name would resonate strongly with another group — one just as critical to the firm as CEOs.
The Recruitment Engine
Still, it takes far more than a name to attract talent today on Ivy League campuses, where consulting firms, investment banks, and technology companies continue to up the ante as they compete for top grads.
"Just as we wanted clients to feel a difference in our culture, we wanted to create differentiation in our recruiting experience," explains Canner, whom colleagues identify as the mastermind behind the firm's robust recruitment function. "Candidates feel as though they get pushed intellectually in a broad set of ways as they speak with us over the course of a couple of rounds of interviews. They feel like they really see something about the individuals whom they're talking with and are not getting the party line but instead individual points of view."
Kristen Clemmer, KPL's director of recruiting, is tasked with making sure that the best candidates are being engaged by the firm. While the partners are actively involved in interviewing candidates, the firm's recruiters are known to coordinate follow-up meetings and correspondence between the partners and candidates.
This allows promising candidates to better weigh their career options. "The partners are very dedicated to recruiting because it is an obvious way to have impact on the future of the firm, and they never lose sight of the fact that they are building something," says Clemmer, who believes that the idea of being able to play a part in the creation of what aspires to be a great firm is powerful medicine on campus, where the allure of firm prestige is often at odds with the entrepreneurial ambitions of candidates.
Once candidates are offered positions with KPL, the firm will wine and dine hiring prospects, but a practical sensibility is evident within the KPL culture. Last February, during the firm's so-called cultivation weekend, prospective KPLers dined on Indian cuisine at a restaurant near KPL's Manhattan location. Of the prospective hires who attended the dinner, 13 of the 19 undergrads holding KPL offers went on to accept positions, while 8 of the 10 graduate-level hiring prospects accepted positions.
A Breed Apart
KPL's early emphasis on establishing a robust recruitment function is likely to serve it well as it attempts to achieve its stated goal of tripling in size by 2008. The firm expects to grow 33 percent this year, after achieving 18 percent growth in 2003 and 12 percent growth in 2002.
"In 2002, we felt strongly that in a down market, we should focus, if financially feasible, on building longer relationships rather than getting every dollar of revenue possible," says Canner, who today shoulders the bulk of the firm's management responsibilities. Earlier this year, KPL added a fourth partner to the mix, when Kenny Kurtzman, a one-time McKinsey principal and former CEO of an Internet company, opened the firm's Houston office.
Meanwhile, the entrepreneurial fires continue to burn within KPL, and are now visible in a variety of forms — including software, where the firm has been investing in the development of analysis tools that can codify portions of consulting work. Despite having captured the interest of certain venture capitalists, KPL has continued to fund the development of the tools on its own.
No matter where the business interests of KPL's individual partners may lie, all discussions ultimately lead to the firm's greatest work-in-progress, its culture.
Says Feigen: "We think that you get just one chance to build a culture, and that's because a culture is so hard to change. If we can build it right from the start — from the get-go — we have the opportunity to create something truly unique."
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