Three Milestones

Breakthrough consulting projects may involve revolutionary processes and technologies, new markets, or innovative approaches to existing markets. Think of a seminal reengineering engagement, a bet-the-company ERP implementation, othat first multi-billion-dollar business process outsourcing partnership. Or, think smaller.
"We have three or four clients right now at which our work might qualify as a milestone project," says Todd Lavieri, CEO and president of Archstone Consulting. "A year from now, we'll know the extent to which we were able to build on these projects."
Small, fast-growing firms like Archstone are ripe for milestone projects, which can launch a new practice area, attract new consulting talent, and, of course, serve as a magnet for new clients. But a turning-point project does not necessarily need to bulge with innovative thinking. Sometimes, timing is more important. A look inside milestone projects at Archstone, Accenture, and Deloitte Consulting reveals that milestone projects come in different sizes, lengths, and forms.
Defining a Milestone
Although consultants interpret the notion of a game-changing engagement differently, they agree on certain core elements: A turning-point project requires just the right combination of firm leadership, consulting talent, a willing client, and, above all, sound timing.
"A broader notion of a milestone consulting project would be one that has tremendous impact," notes Chris Trimble, a senior fellow at Katzenbach Partners LLC and a member of the faculty at the Tuck School of Business at Dartmouth. "That might be because there are truly new research-based concepts in the mix, or it might be because the consulting firm was in the right place at the right time and did a great job."
In his 25 years in the consulting profession, Lyman has seen great ideas and potentially game-changing projects falter "because they hit the market too early, and never took off." Lavieri agrees. "The key is whether management can build on it or not," he emphasizes. "Can you really take it somewhere? Or, are you with an organization where the project qualifies as great work but is not necessarily strategic to the path that firm is following?"
Clients can also be unprepared for groundbreaking projects that might otherwise propel the firm performing the work to new heights. "It's important as a consultant to really try to assess whether the client can actually pull it off," says Lyman. "The client needs to have the enabling elements in place, including consulting talent [see "Turning Points Require Talent," below], to allow them as an organization to be comfortable in taking the risks that go along with game-changing work."
Or, the client needs have its back against the wall and embrace the project because it has no other choice. In either situation, one or more client executives also need to publicly support the project.
"We have very, very strong executive sponsorship," says Deloitte Consulting principal Dean Nelson of his technology integration practice's work with MassHousing. "The executive director of MassHousing will speak very highly of our firm in public forums. He has said that he doesn't believe that his organization would be as far as they are today without Deloitte's help. You cannot ask for better advertising than that."

If You Build It, They Will Come …

Twenty years ago, Southwest Airlines chairman Herb Kelleher telephoned a 30-something KPMG partner and asked him to take over Southwest's executive compensation work. That conversation still reverberates for Brent Longnecker today. "The confidence it gave me and the group around me was amazing," he says.

The marketing, recruiting, and staff development benefits are also impressive. Southwest has retained Longnecker through his moves to two other firms and the launch of his own firm. He has referred potential clients to Kelleher and Southwest president Colleen Barrett. And Longnecker still receives unsolicited calls that begin with, "Herb told me to call you … ."

Longnecker often places his new consultants on the account to expose them to executives whose strategy and tactics are taught in their business schools. The value of this milestone project has changed over time. "The engagement really helped me to get a start," he adds. "But now, it also speaks to the longevity of relationships our firm is able to maintain."

Trimble currently has several projects percolating, and he hopes that one of them will develop into a full-fledged milestone.

"My idea of a milestone consulting project is one that proves that new ideas developed through research really do work in the real world," explains Trimble, who is following a blueprint of sorts for landing a milestone consulting engagement.

In December, Harvard Business School Press releases the book he co-authored with Vijay Govindarajan, 10 Rules for Strategic Innovators: From Idea to Execution. A distillation of the book ran as the lead article in the May 2005 Harvard Business Review. Now, Trimble wants to work with a client to flex his new frameworks and concepts, which focus on the ways in which established companies successfully launch new businesses, in practice.

"Companies don't fire off press releases when they decide to launch a brand-new business," he notes. "They keep it under wraps for a while. In my case, I think that we're going to 'find' a company that has decided on their own that they believe that the ideas we have developed can really make a difference."

Trimble was attracted to Katzenbach in large part because of the firm's infrastructure for taking new ideas to market, its talented roster, and the firm's general interest in execution. If and when a turning-point engagement plays out, he hopes to develop a new practice, based on that work, within the firm.

Breakthrough Case Studies

The three milestone case studies that follow show that breakthrough engagements tend to occur as the result of Ah-ha! moments and good timing, as opposed to carefully planned blueprints. They all differ in size, scope, duration, and subject area, but each delivers similar benefits in that the work has helped each firm attract new business while strengthening the skills and reputations of the consultants who served on the projects.

When Deloitte Consulting's Dean Nelson and Nitin Mittal, a senior manager in the technology integration practice, looked into an e-business portal request from MassHousing, they saw much more than a technology project. Sharing that vision with their client and the rest of the housing finance agency (HFA) market has opened up new opportunities for MassHousing, the HFA sector, and Deloitte Consulting.

"I have been involved in only a couple of breakthrough projects," says Nelson, "and this certainly is one of them. These sorts of engagements help us as a firm by opening up a new market opportunity, or by inspiring us to dramatically rethink how we're going after certain business."

MassHousing is a nonprofit, quasi-government agency that raises capital against bonds that it issues and uses that capital to finance mortgage loans booked by lenders for low- to medium-income Massachusetts borrowers. The agency relies on private nonprofit and for-profit developers to construct and operate the rental housing that it finances and on a large network of approved lenders to provide home mortgage programs to first-time home buyers.

Three years ago, the housing finance agency (HFA) sought Deloitte Consulting's help in developing an e-business strategy centered on a Web portal (eMassHousing.com), which would help cut costs, reduce processing times, and improve the ease with which the agency interacted with customers and business partners.

A four-month strategy phase, launched in April 2002, was followed by three implementation phases that began in September 2002 and concluded in April 2004. "We wanted to make sure that doing business with us was just as convenient as doing business with any other mortgage wholesaler," notes Frank Creedon, MassHousing's director of planning and administration. "And we were satisfied at that level. We now hear from banks and other business partners that our e-business platform is as good as those of large companies like Countrywide."

Six months after the launch of eMassHousing.com, more than 98 percent of the 155 Massachusetts-based lenders that work with MassHousing were using the portal. The National Council of State Housing and Finance Agencies recognized MassHousing for advancing the way that state HFAs conduct business over the Internet. Gartner Group and other analyst firms have showcased MassHousing's new enterprise portal as a case study at conferences and seminars.

The benefits were the result of a realization that occurred about 12 months into the project. "As we moved deeper into the implementation, we started to understand how far ahead of the curve we were in leveraging portal technology," says Nelson. Rather than simply creating a slick, Web-based gateway to a collection of information, Deloitte and MassHousing realized that the portal could serve as a business services aggregator. Today, 80 percent of the approved loans processed through the portal do not require any manual intervention.

Beyond the efficiency benefits, however, the portal is redefining how state HFAs collaborate. Thanks to the portal — and the positive attention it has received in the market — Creedon is currently working with other state HFAs so that they can go to the reinsurance market with a more geographically dispersed (and therefore less risky) portfolio of loans.

"Having Deloitte at our side and having them know our business as well as we do made a big difference," Creedon notes. "And I have not always seen that from the other consulting relationships we've had. This really put us on the radar screen of every housing finance agency." By showcasing the project at industry and analyst gatherings, MassHousing has shown HFAs how greater collaboration among the state agencies, which historically have viewed themselves as operating only within their state boundaries, can generate additional benefits.

MassHousing and Deloitte initially discussed the possibility of jointly marketing the solution to other state HFAs. Now, Creedon says that they are leaning toward making the solution available on an open-source basis with Deloitte as the preferred integrator.

Creedon and MassHousing are no strangers to industry speaking engagements. The organization prides itself on its leading-edge practices, which Nelson and Mittal say helped them guide the work beyond the confines of a traditional technology project.

"It actually opened up a market for us," Nelson explains. "This was the first significant work our firm had ever done for a housing finance agency. … It has opened up a market opportunity for us within the public sector space and helped to bring a message to other HFAs that says, 'The rules have changed a bit, here's how they've changed, and here's a solution that can help you on the road to transforming your business.'"

The realization of the project's potential as a game changer stimulated some adjustments to the project team. Nelson and Mittal brought in consultants with a heavier strategy and industry background to work with their core group of technical architects. The influx of broader skill sets fueled the project and ultimately the reputations of everyone on the project team.

"Something like this clearly helps your own career inside the firm and within the industry," Nelson notes. "This has definitely done that for me. And those types of benefits may be even more important for senior managers, like Nitin, who typically are not afforded the opportunity to get out and speak about a project and its implications."

Two years ago, as consultants within Accenture's health and life sciences supply chain management practice examined the "thought leadership" literature on radio frequency identification (RFID) and electronic product code (EPC) advancements, the practice's lead partner had a thought.

"After reviewing all the white papers, I said, 'I don't know if anything new can be written here. Why don't we actually deploy this technology and determine if it's mature enough to actually be put to practical use?'" Jamie Hintlian recalls.

Hintlian and his team set out to design a project that fell outside most of the boundaries of a traditional consulting engagement. The purpose of the project would be insight rather than revenue; "costs were shared," is how Hintlian describes the fee structure. There would be no single "client"; rather, each of the pharmaceutical manufacturers, distributors, and pharmacies — along with Accenture itself — would benefit from the insights gleaned from designing and operating a fully functioning RFID-enabled supply chain.

The computers and software tracking the 13,500 packages of pharmaceuticals over an eight-week period were housed in a conference room within Accenture's Chicago facilities. The products, however, were real, and the participants would observe them as they traveled along their normal supply chain routes.

"I think that there was always this undercurrent of desire to have more collaboration in the marketplace," says Hintlian. Accenture tapped that desire by developing a forum for the collaboration, one that would equip each participant with a collection of real-world lessons learned about the use of RFID in the supply chain.

In retrospect, the project seems like a natural coming-together of industry heavyweights around a common interest. In practice, it required an incredible amount of legwork to pull off, along with a heightened sensitivity to antitrust issues and a carefully crafted, mutually agreed-upon set of objectives.

As it took root, the project began to embody Accenture's commitment to innovation and the life sciences supply chain management practice's drive to be part of the fabric of the industry. "If we're going to talk about innovation and innovation delivered, we have to live and practice innovation," Hintlian says. "This is a prime example of our commitment to innovation."

The practice leveraged its client and industry contacts to assemble a who's who of pharmaceutical players, including Abbott Laboratories, Barr Pharmaceuticals Inc., Cardinal Health, CVS Pharmacy, Johnson & Johnson, McKesson, Pfizer, Procter & Gamble, and Rite Aid. A fair number of lawyers, who clearly laid out what could and could not be discussed when the group assembled, also participated.

The group also collaborated with the anti-counterfeiting task force from the Food and Drug Administration (FDA). The primary objectives of the project were to gauge the extent to which an RFID-enabled supply chain could strengthen safety and security; generate operational efficiencies; and improve the overall visibility of objects as they are moved through the supply chain.

The program's laboratory was the supply chain that connected the project's participants: Actual warehouse workers, packaging professionals, logistics managers, and other supply chain employees were trained on new business processes that were introduced to leverage the RFID tags, readers, and antennas and off-the-shelf software applications that the group purchased for the project.

The experience produced several lessons learned, says Hintlian. It confirmed that RFID technology can be leveraged to make a supply chain safer and more secure. The technology can also improve the efficiency with which various nodes of the supply chain operate. For example, the crews at some distribution centers discovered that they could save significant amounts of time by automating a large portion of receiving and inspecting processes. Those benefits are not automatic, however. The project also demonstrated that implementing the technology and training staff can be time-consuming. Several other hurdles were also exposed, including the challenge of affixing identification tags to the limited real estate on a prescription drug container.

One of the most important gleanings was the fact that the program took place at all. "We realized that key players in the industry can come together and lawfully collaborate," says Hintlian, who heard from colleagues in other parts of his firm a few days into the launch of the RFID-enabled supply chain.

"Shortly after we launched this program, a similar effort on a smaller scale was initiated in another industry that our firm serves," Hintlian notes, adding that the experience also helped from a team-building perspective. "Our bench strength in this field has become very strong. And it certainly positioned us to establish offerings in a variety of ways."

Accenture's approach to positioning the firm to take advantage of future opportunities may sound a bit too innovative to firms that cannot afford "shared-cost" exercises at the moment. Yet, all successful turning-point projects are more about what the firm accomplishes in the future than what it accomplishes today.

Archstone Consulting CEO and president Todd Lavieri is no stranger to breakthrough consulting engagements.

"Once you have completed the work, you recognize that you're probably out in front of the industry," he says. "And you can use the qualifications and, frankly, the references. Maybe you will co-write an article in the Harvard Business Review with your client. Most important, you've trained a group of people who are now a hot team. They know how to tell the story. And in consulting, nothing sells work better than sold work."

Launched in June 2003, Archstone now has three service areas, including strategy, an operations practice, and its CFO advisory services. During its first 18 months of existence, the CFO advisory services practice completed a series of successful, but smaller, projects. One of those engagements generated a breakthrough opportunity.

"They had worked on a couple of different projects here at GE Rail Services," notes Brigitte Lobstein, executive vice president, customer advocacy and services, for GE Capital Rail Services in Chicago. "And I think that the big differentiator with Archstone was their willingness to work with us to come up with a solution that met GE Rail's needs. For Archstone, it was always about, 'How do we do the right thing for the customer?'"

Earlier this year, GE Rail Services CEO Theodore Torbeck requested a series of customer surveys, the results of which indicated that the business needed to address billing issues. The first step was to understand the nature of the problems among the business's five billing streams. Archstone conducted that analysis over the course of two months.

The CFO advisory services team's work uncovered a variety of different root causes of problems in each billing stream. After the results were presented to the executive team, GE Rail Services launched a series of billing redesign projects that will take at least a year to complete.

"We engaged Archstone to design each of the billing streams," Lobstein reports, "and the firm is working with us on training and implementation."

So far, Lobstein is pleased with the progress. Asked whether she would serve as a reference for Archstone's CFO advisory services, she replies immediately: "Absolutely." She credits the firm with ensuring that "the customer gains benefits from the money they're spending."

"There is a huge amount of integrity and vigilance on the part of the entire company to make sure that at all times the customer is pleased with the progress," Lobstein adds.

The project's scope and the client's willingness to speak on Archstone's behalf have given the project "turning point" status for the practice.

Archstone Consulting CEO and president Todd Lavieri is no stranger to breakthrough consulting engagements.
"Once you have completed the work, you recognize that you're probably out in front of the industry," he says. "And you can use the qualifications and, frankly, the references. Maybe you will co-write an article in the Harvard Business Review with your client. Most important, you've trained a group of people who are now a hot team. They know how to tell the story. And in consulting, nothing sells work better than sold work."

Launched in June 2003, Archstone now has three service areas, including strategy, an operations practice, and its CFO advisory services. During its first 18 months of existence, the CFO advisory services practice completed a series of successful, but smaller, projects. One of those engagements generated a breakthrough opportunity.

"They had worked on a couple of different projects here at GE Rail Services," notes Brigitte Lobstein, executive vice president, customer advocacy and services, for GE Capital Rail Services in Chicago. "And I think that the big differentiator with Archstone was their willingness to work with us to come up with a solution that met GE Rail's needs. For Archstone, it was always about, 'How do we do the right thing for the customer?'"

Earlier this year, GE Rail Services CEO Theodore Torbeck requested a series of customer surveys, the results of which indicated that the business needed to address billing issues. The first step was to understand the nature of the problems among the business's five billing streams. Archstone conducted that analysis over the course of two months.

The CFO advisory services team's work uncovered a variety of different root causes of problems in each billing stream. After the results were presented to the executive team, GE Rail Services launched a series of billing redesign projects that will take at least a year to complete.

"We engaged Archstone to design each of the billing streams," Lobstein reports, "and the firm is working with us on training and implementation."

So far, Lobstein is pleased with the progress. Asked whether she would serve as a reference for Archstone's CFO advisory services, she replies immediately: "Absolutely." She credits the firm with ensuring that "the customer gains benefits from the money they're spending."

"There is a huge amount of integrity and vigilance on the part of the entire company to make sure that at all times the customer is pleased with the progress," Lobstein adds.

The project's scope and the client's willingness to speak on Archstone's behalf have given the project "turning point" status for the practice.

The proof of that status ultimately depends on how well Archstone can leverage the work. "This project came along and really fulfilled our desire to deliver a deep collection of methodologies and expertise at a very strong and very reference-able client," says Lavieri. "This project has challenged our team in a way that has helped them to take the practice to the next level."

The value of any breakthrough project, Lavieri says, is that the team that performs it becomes a hot commodity. "You become sought out in the industry: 'Oh, you were the guys who did that forecasting-improvement project,'" he explains. "The project trains a group of people in a way that allows them to sell better as a team and also individually — plus, it can help grow a practice very quickly."

In one of his final projects at Deloitte Consulting before leaving the firm to launch Archstone, Lavieri recalls a major supply chain with a top Fortune 500 client. "What it really did was take my team into the boardroom," he notes. "Many members of my team had not stared down the CEO and said, 'This needs to get done.' That becomes much easier to do the second time. And, as a consultant, you can point back to those sorts of projects for years."