Three Questions for Brent Longnecker
Having reveled in the complexities of executive compensation and corporate governance, one of the compensation market's most persistent teachers says that his hardest lessons may be the ones his own firm has taught him. A talk with Brent Longnecker, president of Longnecker & Associates, Houston, Texas.
CM: Having built your career at a large firm before leaving to establish your own, where have your expectations, as far as the challenges a new firm faces go, been surpassed?
Longnecker: Well, you learn really quickly how important the team is going to be. The team has to be absolutely in sync. I didn't realize how hard this would be. And this is because of the type of talent that is required. These are very self-motivated people, but there are times where you want to say, "Trust me on this, I know what I'm doing." But I really have had to learn to be a better leader. I never would have thought that I would be taking as much time as I am to listen, to understand, and to mentor. We actually have sessions where I sit down and I say, "Okay, what can I be doing better?" At Deloitte & Touche, that just wasn't done.
CM: How does your hiring philosophy differ from that of a large firm?
Longnecker: When I make a hiring decision here, it is literally in hope that the person will stay with me as long as possible, so I don't have this issue where only the toughest survive. We used to say at Deloitte that only 5 percent will survive, and of that 5 percent, only one percent will make partner. That certainly is not our model. Herb Kelleher's philosophy has been my model. "You hire the very best person you can. You train them as well as you can, and then you get the heck out of the way." It might have been helpful if Herb had told me, "You are also going to have to spend a lot of time understanding and listening."
CM: How do you offer the same client?
Longnecker: I had that same question from a new prospective client just the other day. They asked, "Are you going to be involved?," and I said, "Yes." However, they asked if I would sometimes not be involved. And I said, "Yes, that's right, but there will always be some of our most senior people involved, and our people run in packs. So no matter what, you will have three people trained as a team. And this brings me to the growth issue. We don't have a problem growing, but we do have a problem delivering the quality for those clients who have decided to use us forever. We're here to make a difference with our clients, and there could be a day when we turn them away if we can't make that difference. At a big firm, you would never hear someone say something like that.
Dell vs. Lenovo: China Showdown Rekindles Consulting Rivalry
In the world's ever-competitive personal computer industry, Dell Computer scored an enviable public relations coup last summer when its maturing success in China was explored in a page one article published in The Wall Street Journal.
Beneath the headline "For Dell, Success in China Tells Tale of Maturing Market," a WSJ reporter related the facts behind Dell's incursion into China and what appears to be a coming showdown with Lenovo Group, the Chinese tech giant that recently achieved global reach when it acquired IBM Corp.'s PC division.
Still, for those familiar with the consulting world's own rough-and-tumble rivalries, the WSJ article signaled a new chapter if not the continuance of one of consulting's most contested matches: Bain & Company versus McKinsey & Company.
Having strategized its way to becoming the world's #1 PC maker, Dell is without a doubt one of the (if not the most) coveted clients within Bain & Company's client portfolio today. Meanwhile, Lenovo appears to have borrowed a page from devoted McKinsey client IBM, in light of news reports that revealed that the Chinese tech vendor had enlisted McKinsey & Company to help with the purchase of IBM's PC unit.
While IBM's client relationship with McKinsey & Company is known to extend back half a century or more, Bain's relationship with Dell first came into focus in the mid- to late 1990s, when the efficiencies of Dell's build-to-order model took its toll on IBM and other PC makers, and later when Kevin Rollins, a former Bainie, ascended to the rank of Dell CEO. To its credit, Lenovo is reported to be responding to Dell's tactics in China more quickly than IBM or Hewlett-Packard ever did. What's more, for Dell to succeed, Chinese consumers will have had to move beyond their retail-oriented culture.
"Dell has, of course, figured out a way to do business quite successfully here in China. And there are no findings that report that second-time buyers of PCs, or repeat buyers who are more comfortable with the product, won't buy direct," Paul DiPaola, partner-in-charge, Greater China, for Bain & Company, told Consulting Magazine in a recent interview.
"Five years ago, online purchases were truly an issue for Dell. But as buyers here become more sophisticated, and as banking deregulates and makes payment easier and credit cards more available, we expect to see that direct sales will take off," explained DiPaola. For its part, Dell is currently the #3 PC maker inside China's PC market, while Lenovo remains #1 by a wide margin (see chart). Nevertheless, Dell appears to be inching upward.
Perhaps not willing to make the same mistakes as American PC makers, Lenovo has already broken with convention and begun selling directly to large Chinese businesses. Having already helped advise Lenovo on how best to become a global PC contender, McKinsey & Company is no doubt angling to advise its client for the expected showdown now advancing on its home turf.
Sidebar: Former ATK CEO Joins PRTM
Dietmar Ostermann, the former A.T. Kearney CEO who drew fire from both his ATK partners as well as former EDS CEO Dick Brown, has joined PRTM's automotive practice.
Having once been tasked with the unenviable job of integrating ATK consulting services with those of the giant integrator EDS, Ostermann has had a consulting career that was once characterized as putting him between a rock (Dick Brown) and a hard place (ATK).
To date, ATK's marriage with EDS remains rocky. Earlier in the year, the giant integrator said that it would consider selling ATK.
According to PRTM, the former ATK consultant will be instrumental in supporting the firm's expansion in Germany. PRTM currently has an office in Frankfurt, Germany, and will open a Munich office later this year, bringing the firm to 14 offices worldwide.
Counterfeit Viagra Triggers RFID Efforts
When Lyle Ginsburg talks about RFID these days, he'd rather talk about the smart medicine cabinet than he would Wal-Mart, Target, Tesco, or any of the other retail giants who routinely garner the lion's share of ID technology's press clippings.
The smart medicine cabinet is of course more a concept than something you'd find sitting in an IKEA showroom, but a prototype does exist and can be found right beside one for a smart wardrobe inside Accenture Technologies Labs. Or at least that's how Ginsburg tells it when asked about future RFID-driven consulting opportunities. As Accenture's managing partner for technology innovation, Ginsburg finds himself routinely returning to "the labs" for examples of different RFID research projects. Hence, the smart medicine cabinet — an eight-year-old research project that produced a cabinet capable of reading medicines that have been tagged with RFID. "The idea is to help patients be compliant and help them take the right drugs at the right frequency," explains Ginsburg, who says that the "take up" of RFID-related technologies within the pharmaceutical industry has begun to grow more swiftly as the Food and Drug Administration continues to track how pharmaceutical counterfeiting is on the rise in the United States.
"That's what's driving the pharma manufacturers. And that's why you've got these RFID pilots going on, and increasingly visible pilots from Pfizer and others where they're going to be tagging all Viagra coming into the country by the end of the year," explains Ginsburg.
As for what's likely to drive opportunities behind smart wardrobes, Ginsburg says never to underestimate the power of bad fashion sense.
"It's like having a style agent who says, 'You know, that shirt and those pants may not work well together.' Or you link your clothes to a calendar that says, 'You've got a client meeting today. Here's your appropriate attire,'" says Ginsburg, who prefers stripes over solids.
To read our interview with Lyle Ginsburg, go to www.Consultingmag.com .
Books
How Does a Client Make Decisions? First, Identify His or Her Persuasion Type
The notion that C-level executives tend to make big decisions in multiple ways is not exactly useful information. However, the notion that senior-level executives tend to make big decisions in one of five predictable ways that can be influenced is very useful information, particularly if you're a consultant.
Or at least that's the perception of those consultants who have picked up a copy of The Five Paths to Persuasion: The Art of Selling Your Message by Robert Miller and Gary Williams (Warner Business Books, 2004). While the book is no doubt intended for the hardcore selling set, its focus on C-level decision-making is making it tempting airport fare for consulting's marooned rainmakers.
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