Navigating a Merger: When Your Career's on the Block

Today, McHandle's recollections help underscore the fact that often lost amid the glow of mega-mergers are many of the consultants who comprise the talent the acquiring firms are coveting, for whom the heady world of the consulting industry no longer seems so frothy and fun. They're caught in a personnel conundrum common to any firm that is bought out, of course. Yet in some of the biggest recent deals, the consulting industry has been adding its own unique layer of confusion and pain for the people who are supposed to make these mergers work at the operating level.

"They don't do it very well, and it's mainly because they underestimate significantly the human dynamics of the merger process," says Janet Jones-Parker, managing director of Jones-Parker/Starr, a Chapel Hill, North Carolina—based consulting-firm advisory. "They overlook that it really is the human capital that preserves your revenue stream and helps you grow the business even after you've merged. I just think some of these firms are used to the more corporate approach in which you're just putting together two big companies and you get redundant positions and you just let one go — and it doesn't impact the bottom line the way that sort of thing does in a professional-services company."

Agrees Sandra Ford, president of The Ford Group, a Philadelphia-based firm that specializes in placing senior-level consultants: "I don't think they're any better than corporations in how they do mergers, and consulting firms come across as being worse, because you would expect that they would know what the heck they're doing."

Ham-handedness by agglomerating consulting firms tends to occur in a few key areas, say search-firm executives and consultants themselves. Consolidators underestimate the turmoil caused by the melding of corporate cultures even where they're fairly compatible. Or they refuse to communicate what's happening from the get-go, ticking off staffers who are savvy enough to know that a merger is coming down and feel slighted about being kept in the dark.

Some muddy the crucial criteria of performance measurement and how it will affect compensation and the track to partnership. They may fail to deal fully with the ego needs of consultants or the willingness of rank-and-file staffers and even senior-level consultants to jump ship into an economy that continues to demonstrate an insatiable demand for their services.

"They perceive that they'll lose revenues if they stop to do it right," believes Karen Roberts, senior manager of the integrated health group for Deloitte & Touche, in the firm's San Francisco office. "But in fact the reverse happens, because the rumor mill is just grinding stuff out all the time. People aren't productive; they are focused internally instead of on the marketplace or on their clients. The company loses revenues anyway."

Roberts should know. She was on the staff of Alexander & Alexander Consulting Group in San Francisco when Aon Consulting bought the firm in December 1997, and left last May for her new position with Deloitte & Touche. "Understanding that there is always fear in the initial stages of any acquisition, I was going to give it a year," Roberts recalls. But though Aon "was trying" and "doing many right things," it turned out not to be the culture that she'd bought into at Alexander & Alexander or "the type of work I wanted to do."

There are many in the industry who hold up PricewaterhouseCoopers (PwC), on the other hand, as an example of a merged firm that not only makes great strategic sense but also has handled post-merger integration issues with some significant skill Credit for that goes in part to the fact that "we celebrated the merger from day one, because this was about growth, not cost-cutting," notes Mark Kingdon, global transition leader for management-consulting services for PwC, in New York City. The firm also moved quickly to "co-locate" consultants from PW and Coopers who henceforth would be working together, Kingdon says. Also, serendipitously, both firms had previously used Lotus Notes for their intranets, which also helped the combined entity.

Yet even at PwC, more than a year after the merger was consummated, there are still plenty of people like the very senior former PW partner who became disconcerted that former Coopers executives seem to be occupying most of the top new seats in his specialty area. "Certain lines of business win, so if you're on the team that dominates that business, you're in great shape," says the searcher who was working with this partner. "Otherwise, you're on the outside looking in."

Today, PwC's global managing partner Scott Hartz admits there have been a few snags.

"We haven't done it perfectly, and no one ever does," says Hartz, "but we do feel we've been successful …"

As for McHandle, the PwC partner today oversees a portion of the newly-minted firm's business larger than his old Coopers practice. With admirable compassion, he observes: "For me, the biggest downside was the uncertainty — but other people were not as fortunate."

Sidebar: Your Guide to M&A Survival

While the fact is that nearly all competent consultants can land on their feet in a bullish market these days, the post-merger world still can prove treacherous territory for anyone in the business. If you're a consultant who's caught in an M&A vortex, how can you best shepherd your career in the midst of the whirlwind? Merged-firm executives, consultants, and placement experts offer this advice:

Face the music:

Don't fool yourself. The dynamics of power involved in consulting-firm acquisitions are no different than those anywhere else.

"Believe me, 'We bought you' comes across loud and clear," says one consultant at a recently acquired firm. "Even when you're questioning issues of quality and culture, things that at least need some introspection, the underlying response is always, 'If we're so bad, how come we had the money to buy you?'"

Do nothing right away:

Quick reactions usually aren't the best. "Don't do anything in haste," says Karen Roberts, senior manager of the integrated health group for Deloitte & Touche, in the firm's San Francisco office. "Keep an open mind, because change isn't always a bad thing, and whether you're the acquirer or acquiree, try to effect positive change. If you become a naysayer, that can become a self-fulfilling prophecy. If all your best efforts don't work, then make a change for yourself."

Janet Jones-Parker, managing director of Jones-Parker/Starr, a Chapel Hill, North Carolina-based consulting-firm advisory, tells her clients to wait, "because whatever options they have today — at the company or outside — will still be there in five to six months. You should wait to see what the deal really is, and how the organization fleshes out."

Keep your head low, then peek:

In the meantime, Jones-Parker advises, "focus on the business at hand and not on the things over which you have no control. Stay out of office discussions and politics, because they just divert your attention. Make your points and positions well known to people, and then get back to business."

Eventually, the outlines of the new firm and your purported role in it will take shape. PwC's management, for example, is rolling out a new set of principles that "talk about our clients, our people, and our business, and they're designed to create a code of behavior for the organization," says Mark Kingdon, global transition leader for management-consulting services for PwC, in New York City.

Sandra Ford, president of The Ford Group, a Philadelphia-based placement firm, says that it's crucial to be able to understand what's expected of you now. "What services every day am

I responsible for delivering? That's very important to the client side. And when consultants don't exactly know how they're supposed to do to market, it's confusing."

Bulk up:

Bettering yourself professionally is one way to stand out in a shakeout, especially if you want to stay with your current firm. "People who do the best in these situations are the ones who show themselves to be adaptable and flexible," advises William Kelly, president of New York City-based Kelly and Co., which places human-resources consultants.

Timothy Wujcik, vice president and managing director of A.T. Kearney's Chicago-based executive search arm, underscores the importance of developing new skill sets. "That's critical at this juncture. There's no such thing as a free lunch anymore. … You're in the major leagues now, not AAA ball …"

Observe how much your really wanted:

Titles — often an important consideration in the image-conscious consulting industry — and compensation adjustments will tell you most of what you need to know, of course. It's a good sign, for example, if the firm "wants to put retention bonuses in front of you that vest over the course of three years, say," says Kelly. "It's difficult for some people to walk away from rolling vesting like that. That's how firms get their better people to stay."

Reporting relationships also will be telltale. "Who's your sponsorship now? Who are you going to be aligned with?" says Ford. "Will it be a key player in the new organization? Or, if all of a sudden your old mentor isn't going to have a lead role anymore because they're re-matrixing the organization, that's a key thing."

Look out for yourself:

In a fast-changing market, says Bob Sullivan, managing director of the Boston office of search firm Korn Ferry International,

consultants "need to be the managers of their own careers and view it as sort of a long-term consulting arrangement with your company. You should look at it in three- to five-year snippets." If you were a reengineering consultant a few years ago, an area that has stagnated, migrate to a specialty in e-commerce or customer-relations management, he advises.

"You've consulted like this with others, and now suddenly you've got to start taking your own advice," says Vic Ippolito, senior consultant for Global Resources Group Inc., which advises health-care consulting firms. "Everyone values people who are loyal. But if you're not loyal to yourself, you're missing the boat."