Marketing
Marakon: Where Everybody Knows Your Name
First days at work are stressful enough without being the center of attention. Unfortunately, for new recruits at Marakon Associates, the competitive spirit between firm offices spilled into their welcoming programs this year.
In one corner, it's the Chicago office, who welcomed 11 new hires by superimposing their faces on 11-by-17-inch posters resembling issues of Crain's Chicago Business.
Not to be outdone, the New York and Stamford, CT, offices manufactured fake money featuring all of their new consultants and associate consultants. The funny money was used at the East Coast operation's quarterly meeting in September, held in a Manhattan restaurant transformed into a Las Vegas-style casino. Teams of employees competed against each other to see who would "create the most value."
Recruiting
Buying by the Bushel at marchFIRST
Some firms boast that they have grown their workforce organically. Others will make an acquisition to fill in their skills gap. When marchFirst, Inc., needed a couple hundred IT professionals, it tapped iGeneration to supply them.
Over the next several months, iGeneration is expected to provide marchFirst with 175 Internet professionals. The firm, through its Internet Talent Network, offers career guidance, skills assessment, training, and certification to people looking to start an Internet career. There are two options for resources-constrained companies. For an up-front free, a charter member would receive priority access to qualified professionals. Otherwise, recruiters can pay per professional.
Mergers & Acquisitions
New Millennium Brings On Buying Sprees
Shattering records for the first half of any year, spending on Year 2000 cross-border mergers and acquisitions rose 60 percent to an all-time, first-half high of $643 billion from 3,310 announced deals during the period, according to KPMG.
European purchasers took center stage away from U.S. purchasers in 1999, spending unprecedented amounts on targets in the United States. But, for the first half of 2000, they have stayed closer to home. Cross-border Europe-to-Europe M&A spending hit $352 billion, more than triple the $102 billion from the same period a year ago.
Behind the M&A spending pace was European expansion and consolidation in industries such as telecom and financial services. For example, the United Kingdom's Vodafone initiated the largest-ever cross-border deal with an unsolicited $186 billion bid for Germany's Mannesman.
The Consultancy Query
Can you describe the role investment banks are expected to play in the growing venture consulting activities of large management consultancies?
David Cowan, managing general partner, Bessemer Venture Partners: "They bring their core services to play. Whether it's raising private equity, public equity, or M&A on a day-to-day basis, some of these banks have developed very deep franchises in B2B research, and so their analysts can be particularly helpful to some of the companies we're investing in. I think they have a lot to offer here to the management consultants, and they will be playing here with us very actively as well."
David Pecaut, president, iFormation, a joint venture between Goldman Sachs and General Atlantic: "One of the innovations that we're bringing to companies, and some are starting use, is that when we spin their assets out, we are leaving some stock options for the senior management of the parent company. … We're also looking at creating equity vehicles where the business is spun out, but there's an opportunity to bring it back in later. … To do these types of transactions, what we need most is skills. So, we're now looking at things like how do we create buy-back options. Goldman Sachs is the best in the world at thinking this stuff through, so we're now getting the benefit of their best thinking."
Chuck Lucier, senior partner, Booz-Allen & Hamilton: "We have seen other firms partner with VCs and banks on more mature ideas and [go it alone] on the least mature ideas. We've just done the reverse, and said we'll partner on the least mature ideas — this is where we need a VC firm's thinking, and when we get up to the more mature ideas, at that point we can evaluate them just fine. We're more than happy to put the firm's money in those ideas, and, in fact, at that point it becomes relatively easy to negotiate one-off transactional deals, whether they be with investment banks or venture capital firms. We actually have chosen to negotiate with a bunch of them."
Strategy & Innovation/ADL Back in the lab
Arthur D. Little's Technology and Innovation Group has come up with yet another invention — a nontoxic foam that neutralizes biological and chemical weapons which could potentially be used in a terrorist attack. The foam was developed in conjunction with a U.S. government task force in response to growing concerns about terrorist attacks. The decontaminant foam is intended for use at emergency or disaster sites by first responders such as firefighters.
Add this invention to the list of interesting, and profitable, wonders the Group has cooked up in the past. The firm developed technology for VCRs that eliminated commercials from taped television programs, as well as a superior rechargeable battery. It also helped Tetley GB gain brand leadership with its idea of the round tea bag.
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