Shumeet Banerji made history last month when he was named the first CEO in the history of Booz & Company, the new global, commercial management consulting practice spun off from the 94-year-old Booz Allen Hamilton. "It's a huge privilege, and I'm incredibly honored," he says. "We're going through a transformational experience and into a brave new world. There is huge possibility here and excitement for what the future holds. It's an historic time at the firm, and it's going to be one hell of a ride." That ride began last month when Banerji, who was formerly the president of Booz Allen Hamilton's global commercial business, took over the reins of the New York-based Booz & Company after BAH leadership decided to separate the commercial and government businesses. Booz Allen, meanwhile, will remain based in McLean, Va., and will continue with its lucrative U.S. government business. (Last month, BAH sold a majority stake in that business to the Carlyle Group for $2.54 billion.)
The split, Banerji says, says, was a strategic decision based on the fact that the two business have become quite different over the last several years. "We've been looking at these two different business for a long time, and we started to wonder if they really belonged together anymore," Banerji says. "Both are very successful businesses by themselves, but the two businesses—which have always been operated in a common partnership structure—began to constrain each other in some ways. Internally, we spent a lot of time attempting to harmonize across two pretty different business models."
For starters, Banerji says the client base of each business is vastly different, as are the resource requirements in terms of human assets, management structures, management models and capital requirements. There will remain collaboration between the two businesses where it makes sense in both directions, he says.
"We were brothers yesterday, and we're cousins today," Banerji says. "We have accomplished all of this in the context of a partnership. For a partnership to achieve this kind of division with no rancor is very unusual. We are one partnership that is separating into two parts, but the relationship and the goodwill across the partnership is extraordinary."
Meanwhile, the job of informing clients about Booz & Company was already under way even before it was announced. "With clients, there's been some curiosity for sure, but once we explain what we're doing and why we're doing it, most of them think it makes complete sense," he says. "And then they want to know if anything will change in terms of their service. The short answer is 'no,' since the businesses have already been operating in two very different domains." The long answer, Banerji says, is that over time, clients will see the advantages of a partnership and a business system that is aligned 100 percent.
Another advantage, he says, is that "Booz & Company truly is a global consulting firm with the majority of the partners outside of the U.S. Where we'll excel is mobilizing for a client anywhere in the world."
That's something that Banerji knows well, having worked with Booz Allen Hamilton for 15 years on three different continents. He started with the firm's Chicago office in 1992 after leaving academia as a professor of marketing at the University of Chicago's Graduate School of Business. With a PhD in micro-economics and game theory, Banerji says he reached a point in his academic career where he had to make a choice about what he was going to do. "What I did as a professor was research and teach, and [much] of this business is data and persuasion. It's not all that different," he says. Banerji then moved to Asia in the late 1990s to help establish BAH practices in Singapore and Bombay. In 2000, he moved to London, which is where he still is based today.
"When you have a business where the U.S. government was at such a scale for Booz Allen Hamilton, your portfolio tends to look a little different than it does as a focused global consulting brand," Banerji says. "So, I would say that we've got a little bit of distance to go in the area of emerging markets." He says Booz & Company will initially focus on increasing its presence in Russia, South Africa and India to keep pace with competitors. And, make no mistake about it: Those competitors are in the upper echelon of the elite in management consulting, on par with McKinsey & Company, Bain & Company and The Boston Consulting Group.
Today, Booz & Company's revenues are "well north of $1 billion a year," he says. "We're absolutely going to be in the Top 3 in our business and our industry," Banerji says. "That's where we belong, and that's where we need to be. It's about ensuring clients have choice at the very top end of this game, and we certainly plan on providing it to them."
Over the last several years, Banerji says the global commercial business, which currently has about 3,300 billable consultants—has been growing at a rate of about 20 percent a year. "Clearly, something is working in our strategy," he says. "Do the math, if we keep that up for four years, we'll double the capacity of the business."
He'll do that by making sure Booz & Company stays focused on what the commercial side of the business has always done well. "The fundamentals of what we do will stay the same—that connection between leading-edge industry thinking and advantage capabilities, as well as the benefit of operating in a more global model, will provide long-term benefits to clients," he says. "I think we fuse strategic thinking with the functional capabilities better than any of our competitors. It's a real advantage for us."
Another advantage, he says, is being able to launch a new firm with the "Booz" brand and all it stands for in the marketplace. "It allows us to continue our heritage, and it ties us to the past, but it also allows us to create some distance from Booz Allen Hamilton, which we need to do over time," he says. "It's going to take us some time for us to get used to the new branding, but [outside the firm] everyone already called us "Booz" anyway."
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