Sticking

Ric Andersen joined the audit side of PwC in 1983, transferring into consulting a year later to use his financial background in working with clients on financial systems. He became a partner in 1994, and today heads PwC's operations for the Americas theater.

Says Andersen: "I've been approached many times since I've worked here, but more than ever over the past few years. Occasionally, natural curiosity means I meet people at companies that are headhunting — after all, I've never worked anywhere else, so I want to see what's out there.
"But I'm staying here. There's an enormous sense of community and belonging that fits my personality and style. I don't care how much I get paid or what it says on my business card. If I can't get up in the morning and be excited about going to work, what's the point? At PwC, there's always a challenge, the culture makes me feel at home, and there is great talent.

"As the partnership changes, it's scary and exciting. I'm comfortable with change, provided it preserves the positive values of community and highly intelligent, motivated people. I want to feel the same way about coming to work as I do today."
Andersen's words are echoed by Michael Herzog, a one-time partner who now brandishes a vice president title at KPMG.

The Attractions of Change at KPMG

Herzog joined KPMG Consulting in 1993, and has been a partner since 1997. After many progressions, he is currently working in the firm's high-tech business unit in Silicon Valley.
"Every month, I think about why I'm doing this job. Consulting is about building intellectual capital and, for me, building intellectual capital drives the culture of an organization," says Herzog. "What brought me here was the ability to leverage my skills as a software developer, the entrepreneurial spirit, and the unique culture — nearly everyone here comes from somewhere else, not straight from college. There can be problems in getting everyone on the same page, but it's a great mix of people."

Having been at KPMG throughout the move towards an IPO, Herzog believes such a move would be good for the firm, saying, "In general, the partnership model is hurtful: It's a cash model, so you can't invest, and there are a lot of class-style problems between partners, staff, and admins. I'm pleased about the possibility of an IPO, and I'm fine about not being a partner anymore. It's a logical move, and it's clear we had to move. There is some frustration about the delay and people are anxious to go forward, but only at the right time."
The symptoms of IPO anticipation are also now lingering at Accenture, where partners are today studying the trajectory of a five-year plan.

A Five-Year Plan at Accenture

In 1981, Doug Calby graduated from Cornell University and joined what was then Andersen Consulting. Ten years later, he was made partner; he now works in the firm's financial services practice in New York as a client partner.

"Absolutely, I've decided to stay here. This is not the first time Andersen Consulting has changed. There was change in the mid-'80s when Andersen defined systems integration, and in the mid-'90s when it led in business integration. Now, the strategy is to create a network of businesses that surround the core consultancy business. I stay partly because we are able to change," he says.

"The three biggest draws for me about Accenture are the people and the leadership, the business we're in, and the clients. I've always felt comfortable with decisions that are made by the firm. I believe our new strategy is right for the next five to 10 years, and our scale means that we get to work with the best clients in the world.
"I envisage staying here — every time there is a new strategy, I want to take a look at it, but based on where we're headed, I'll be here. The market will be tough, but I'm confident that we will be pretty safe this year, and am much more optimistic about it than what I read in the newspapers about start-ups. I was never particularly attracted to start-ups, as I can do what people do there here and get support, which means I can do it very successfully. I've got a lot of e-experience, and haven't had to take a risk. I never thought risk and reward made sense, given what I have here. Looking at the other side is like looking at actors — everyone's heard of the stars, but not the hundreds of starving actors behind them."

As Accenture moves along the path of its IPO trajectory, however, Calby and other Accenture partners will soon likely have more at risk.

VPs at Cap Gemini Ernst & Young

"It's a little too soon to say what differences there are about no longer being a partner, but thus far it doesn't seem hugely different. In terms of compensation, I don't get a profit share anymore, but hopefully I will make capital gains. There's more at risk but, in the main, I believe this is an upside," says Chris Meyer, a former partner at E&Y, who became a vice president after Cap Gemini last year acquired E&Y's consulting arm.
Rather than be a fee earner, Meyer directs the company's center for business innovation, essentially a think tank and R&D lab rolled into one. The center was set up by E&Y, and now has about 30 people dedicated to anticipating and shaping the future of business — with a view to helping clients when they are ready, and making sure that the firm's practices have the skills and tools they need when the time comes.
Meyer joined E&Y in 1995 to run the center and, since last May, has been a vice president of Cap Gemini Ernst & Young. "I saw mostly upsides in the merger and didn't look around for other jobs," he says. "What I did do was look around internally to verify that the philosophy would be as it had been at E&Y in terms of support and respect for the center. Going from being a $4 billion to an $8 billion consultancy doubled the leverage of our work — but only if it was used."

Having found the reassurance he needed about the value of the group within the company, Meyer is happy about where he is today. "Personally, this place fits my capabilities and desires very well. I've always been interested in the future of the economy, and here I have a full-time job working in just that space, with commercial resources. That gives me a lot of scope."

Like Calby, Herzog, and Andersen, Meyer believes the organizational structure may change, but the nature of consulting work will remain the same.

Sidebar: PowerPoints

• KPMG, E&Y, PwC, and Accenture are now forfeiting the last vestiges of the partnership model and adopting the organizational mechanisms used by publicly held corporations.
•The challenge facing certain partners is how to retain the soul of their consultancy as the firm's structure continues to evolve.

Sidebar: Opting Out: Hands on the Wheel

Kevin Campbell, a former partner at both Andersen Consulting and Ernst & Young, quit his 19-year career in the Big Five last May, lured by the offer to use his outsourcing knowledge at a public firm dedicated to Fortune 100 companies. With a background in information systems, Campbell had moved from Andersen to E&Y just a year earlier to run a large part of the firm's outsourcing practice.
"The Cap Gemini purchase of E&Y changed the dynamics of what I wanted to do in outsourcing," he says. "When I heard about Exult and the skills it had, it was an opportunity of a lifetime." Now president of operations at the nearly two-year-old start-up, Campbell says, "I don't think I could ever go back. You've always got to go forward. I love what I'm doing and will stay as long as I can make our shareholders happy." With a contract backlog worth $2 billion and projected revenues of $260 million in 2001, Exult is better positioned than many to fare well on the shareholder front, but such concerns are one of the issues with which Campbell has had to come to grips.

"There are a lot of differences in a public company, compared to a partnership. We've got to do quarterly reporting, to look after shareholders, and we're subject to the highs and lows of the market," he explains. "Working in the Big Five on profit-and-loss jobs was great training for how to run a business, and it's a good place to start a career. But in my first seven months at Exult, I've worked harder, been more challenged, and had to make tougher decisions than I've ever made before. This is the hardest job I've ever had, but it's the best job I've ever had."

For Campbell, being at the epicenter of the action is very appealing. "There's a fair amount of entrepreneurial opportunity in the Big Five. But a position as an officer in a newly formed public company affords another level of entrepreneurial opportunity," he says. "I can make decisions and see them acted out. I've got my hands right on the steering wheel, and it's exhilarating."

What does he miss from his years as a partner? Very little, with the exception of a large supporting infrastructure and the people he worked with along the way. In terms of compensation, too, Campbell is pretty ambivalent. Pointing out that the Big Five are good at generating cash but not wealth, he says, "I have options, and I hope to come out ahead. There's more risk, but there's no reward without risk. It depends on your personal situation, whether you're prepared to manage that — this is no place for the fainthearted." Based in Irvine, CA, Exult also offered Campbell a significant lifestyle improvement. With E&Y, he worked out of Atlanta, but the new job meant a move to Southern California, of which Campbell says, "This is not a hard place to learn to live in."
• Many partners say it is the nature of consulting work, more than the firm's organizational structure, that offers them the greatest career satisfaction.

Sidebar: Opting Out: The Allure of Wealth Creation

Andy Zimmerman made his move out of partnership last year after a career at Coopers & Lybrand and PricewaterhouseCoopers spanning 20 years. He left his last job as global leader for e-business at PwC Consulting in January 2000. Again, like Campbell, he wanted to be at the sharp end, in his case getting involved in building new businesses and influencing events more directly. "I wanted to stop advising and do it myself," he says.

Approached by a former mentor from C&L who had an investment in idealab!, Zimmerman went to see the company, a 1996, Pasadena, CA, start-up that works like an incubator to help new companies get seed capital, grow, and eventually go it alone. "I went to visit idealab!," says Zimmerman. "It was a huge warehouse with little alcoves for companies. It felt like real capitalism in action, very different from PwC."
Within a month, Zimmerman was on board, working as chief operating officer at the company's New York location.

"The economy is changing a lot, but the frustrations for me as a partner in a Big Five accounting firm were the limits on working with audit clients and constraints on investment. I found this difficult, as my job was to get the e-business going," he says. Zimmerman's new job has not been without its frustrations, however, with an IPO filing in March 2000 withdrawn in November due to the dramatically changing market. "I was looking forward to the IPO, so I was disappointed," he says. "But maybe not going public then was psychologically better, as the loss is hypothetical rather than splashed across the screen."
While his stock options remain in abeyance, Zimmerman has no complaints about exchanging a partner's salary and profit share for a salary, bonus, and options. "I could come out better or worse, depending on the value of my options. As a partner, you can get more cash income than you need, but no upside in wealth creation," he says.

Beyond the money and the job, Zimmerman relishes his new lifestyle. Sure, he puts in the hours, but rather than traveling for four nights a week, he is now more likely to be out of town just one or two nights a month. "I'd made over 100 overseas trips in the past four years and forgotten what it was like. It's frightening that I spent so much time in airport lounges," he comments, admitting that the U.S. focus of idealab! does leave him missing some of the international feel and different cultural perspectives of the Big Five.
That said, he describes his own culture shock on arriving at idealab!: "You get thrown into things and sink or swim. Idealab! is much less structured, there's very little process in place, and you learn from others what you should be doing. Then you have to deal with the speed at which decisions are required and made. You have to retrain your metabolism."

Previous colleagues are curious about Zimmerman's work at idealab! and, indeed, two approached the company and have since joined. But will Zimmerman be staying? Short-term, the answer is most definitely yes, but having experienced such an entrepreneurial environment, his thoughts turn increasingly frequently to setting up his own business.