Cover Story: Consultants, Guns, & Money

Consulting's new currency

In theory, the consultants not only nominate themselves for consideration for an engagement but actually bid on it. A consultant with the right skills and experience might be inclined to reduce his or her usual rate for a particularly sexy project or an attractive location or for the opportunity to work with a star project leader or partner. Managers trying to staff less desirable projects may have to pay a premium or throw in other goodies to attract top talent.
While such exchanges will be piloted using a variety of Web-based applications, the efforts to leverage them are being propelled by a single factor — a glut of available talent. By enabling their individual consultants to bid on projects across an internal exchange, the profession's top firms are looking to augment their talent retention efforts by offering consultants a bigger say in the direction of their careers. The new initiatives underscore a shift away from staffing processes purposely crafted to maximize billable hours by keeping as few consultants as possible on the firm's talent bench.
"The solution isn't about clearing the bench — our benches are clear, there's no one sitting around these days — the issue is getting the right consultant to the right job and making both the consultant and the client happy," says Bob Russell, an associate partner with Andersen Consulting's Chicago office, who is currently responsible for running a Web-based staffing project dubbed as "e-scheduling."
"We're bringing our projects and consultants closer together than ever before, and we've done this by changing the entire staffing process and putting individuals and projects in direct contact — unlike in the past, when we had a much more HR-brokered process." Russell believes that a pact announced last month by Andersen and applications vendor Novient, Inc., will now supply the Internet infrastructure needed to fulfill the firm's "e-scheduling" vision.
"What this is really about is greater collaboration among individuals within an organization, where the consultants can in effect have more control over their destiny regarding what they are going to be doing in the next six months to a year and the role they have in developing their overall careers," says Mark Kopcha, Novient's chief executive. Having beaten out nearly 17 technology vendors to garner a deal with Andersen, Novient now has early "bragging rights" in a sector where each of the Big Five is now expected to adopt new applications and strategies.

Matching functionality with technology

While technology applications are expected to provide some automated screening, filtering out candidates who simply lack required skills or whose schedules and prior commitments pose obvious problems, the final assembly of the team will likely remain a manual process. To be successful, the exchanges will need to enable project managers or partners to review employee data and skill sets, assess their impact on the budget, check with other managers for references, and consider any number of factors before making the final decision.
"The critical path to these types of solutions involves getting all your employee data and skill codes loaded, and having a consistent framework for evaluating skills. That's really the backbone to making these kinds of systems work, and we have this now in our existing deployment systems and career model processes. So, for us the issue is not now a functional issue, but an architectural one," says PricewaterhouseCoopers' Bob Russell, who, like his Andersen namesake, is currently evaluating technologies and methodologies capable of liberating PwC consultants from the firm's legacy staffing processes.
"The real challenge for our staff in this marketplace is to balance not only the regular project, but family and worklife ups and downs, hot projects, and opportunities for developing new skills," says PwC's Russell, the firm's consulting leader of human capital, North America.
For its part, PwC has recently been in talks with a roster of different technology vendors, and expects to be announcing a number of technology pacts later this summer. Unlike Andersen, PwC is considering what pundits describe as a more authentic marketplace exchange — one that could potentially leapfrog Andersen in terms of the functionality it offers PwC consultants, and incorporate technology components from multiple vendors.
The early days
At the moment, the use of on-line talent exchanges by consulting firms remains largely in an experimental phase, and the actual exchanges often amount to little more than glorified message boards. Ernst & Young, for example, created Net-Strike Worldwide to handle external contractors.
The most innovative initiatives are using exchanges for internal staffing, although the initial efforts still resemble on-line message boards. McKinsey & Co., New York, for example, has started using on-line technology "to let consultants have more control over their careers," reports Kathy Gallo, director/personnel support. The company long ago abandoned the old-boy network for staffing project engagements, replacing it with staff-run market-making function. An on-line exchange now is used to expedite this market-making. McKinsey consultants can see upcoming engagements and submit their preferences in rank order, although there is no competitive bidding for engagements.
The on-line exchange disseminates information about the engagements and collects the consultants' preferences. It does not, however, automate the actual matching of consultants to projects. The engagement managers still assemble the engagement team, primarily on the basis of performance. "The better performers get more choice," notes Gallo.
In the past, PwC has used an exchange to help schedule its 40,000 consultants to engagements worldwide. "We start with electronic matching, where we reach out through the network to find people, but managers still make the decisions," explains Russell.
The firm expects to quickly move beyond this initial searching and matching. Next, it wants to let consultants upgrade their skills certification on-line as they complete assignments. "It becomes real-time promotion. Fast learners will be able to move up faster," Russell notes. After on-line certification, PwC intends to implement self-nomination, by which consultants can announce their interest in a given engagement.

Where we go from here

According to Davis, two underlying general factors are driving the evolution of talent exchanges. First, power is migrating from the institution to the individual, from command-and-control to distributed networking. For consulting firms, this means that the individual talent who staff the engagements must be invited into the process and given the information to fully participate in the process. Managers and partners are increasingly unable to dictate marching orders to the troops.
Second, the measurement process is evolving from periodic measurement to continual measurement, Davis continues. Gone are annual reviews and standard promotions. Instead, individuals, both managers and consultants, are constantly measured and reviewed. If a consultant successfully completes a difficult project, that experience and the accompanying skills are immediately taken into account as the consultant lines up his next engagement. "We are shifting to a market-based approach in which there is continual fluctuation and adjustment," Davis observes.
Consulting firms will experience the effects of these underlying changes — power to individuals and continual measurement — regardless of whether they implement on-line talent trading exchanges. The on-line exchanges simply provide an efficient mechanism to better facilitate what is happening anyway. With headhunters banging on the consulting firm doors, with staff turnover rates increasing, managers should already recognize that they cannot simply conscript staffing for the next engagement. If a consultant doesn't feel he is getting the engagements he deserves, he can probably walk out the door and land another job in a heartbeat.
In this, there will be winners and losers. The winners will be those consultants who diligently advance their skills, high achievers who build track records as go-to guys. Similarly, project managers and partners who know how to lead truly collaborative teams and deliver successful engagements will find that they consistently attract the best and the brightest.
"Consultants will have better visibility of their skills that are in demand — they will have much more direct access to their own information and what's being projected for engagements that are staffing up," explains Andersen's Russell.
The losers also will quickly become apparent. Consultants who try to coast on past achievements, who fail to continually improve their skills, or who are more adept at playing organizational politics than delivering results will fall behind. Those who count on seniority or the old-boy network will be disappointed, as the market discounts seniority per se and personal connections unless the candidate brings other advantages. Partners and project managers who do not share project information or who are found to provide misleading information about engagements will quickly lose credibility.
"This is not really about auctioning jobs," says George Van Ness, president of Business Engine, a technology application vendor now closely working with a number of consultancies. "This is about putting the tools out there that will allow professionals to manage their careers, allowing them to network and find the places where they can best advance," says Van Ness.
At this stage, it's a bit early to predict whether these exchanges will overthrow the partnership model or institute cutthroat free agency, although the potential certainly is there for both. Yet, the day is likely coming when engagements are staffed by qualified consultants on a bid-and-ask basis. Maybe topnotch consultants will even spurn partnership invitations in favor of the lucrative choice assignments that free agency brings. It may be some time before any firm spins off a 10 percent share of its top brainpower as a marketable equity investment, but in a world of exchange-enabled free marketplaces, everything is on the table and anything is possible.

Sidebar: PowerPoints:
• A number of top firms, including PricewaterhouseCoopers, Andersen Consulting, and McKinsey, are now exploring the use of internal talent exchanges.
• For the exchanges to operate correctly, project managers and partners in charge of individual engagements will have to provide enough description of the engagement to enable consultants to determine if it makes sense for them. The descriptions will consist of a mix of project details and salesmanship, as project managers try to attract the best people to their teams.
• Whether or not they implement on-line talent trading exchanges, consulting firms will experience the effects of underlying changes — power to individuals and continual measurement. The on-line exchanges simply provide an efficient mechanism to better facilitate what is happening.

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