The Talent War's Next Big Battle

Consultants Still Carry Sway on Campus

It was back in the late 1930s that McKinsey & Company began to adopt a mindset that would eventually upend its talent model and dislodge its industry recruitment pipeline. Going forward, the firm would increasingly seek to curtail the hiring of experienced business executives, and escalate its efforts to train people in their more formative years.
McKinsey's partners reasoned that such individuals could be located in the same places law firms and accounting firms found talent — on university campuses.

More than 60 years later, many consulting firms continue to look to university campuses as their primary source of new talent, as both graduate and undergraduate students from top schools continue to eagerly pursue entry-level consulting positions. "I think that you'll find there's a more heated competition on campus this year than in recent past years," says A.T. Kearney senior officer Mick Siegel, who recently joined Booz's Rozanski  as well as other top human capitalists at a round table convened by Consulting (see round table discussion, page 34).
"We're expecting a big uptick in our hiring of more junior people because we held back here, and the raw number of recruits that we are today bringing into the firm is significantly higher from, say, 2002," says Siegel.
The task of filtering resumes can be an even more formidable challenge for smaller firms, where often the recruitment function is shared by multiple partners. Last year, 13.5 percent of Harvard University's senior class submitted resumes to Katzenbach Partners LLP of New York City. As Katzenbach has grown to be a firm of nearly 400 consultants, its reputation on top college campuses has become one that any of the profession's top strategy firms would envy.

Besides Harvard's senior class, Katzenbach was also a favorite among seniors at Princeton and Yale, where 15 and 11 percent of graduating seniors submitted resumes.
In the end, Katzenbach extended offers to only 0.97 percent of all applicants (11 offers for 1129 applicants).
"If there is some level of human behavior interviewing that could be done using Web tools, we would make good use of it," remarks Booz Allen's Rozanski, who believes that the greatest impact information technology has so far had on talent management is in the area of recruitment. But Web-enhanced recruiting is only one of the weapons being deployed in the talent war's next big battle.

Transparent Staffing

"The real winners are going to be the firms that allow consultants to have control over their own development and their own opportunities," says Russ Campanello, senior vice president of human resources for Keane Inc. of Boston, MA.
"We have an internal set of tools that are enhancing transparency and allowing us now to better gauge consultant capabilities using human capital asset measures so that we have a 360-degree view of individual consultants," Campanello explains.

Still, certain consultants are quick to point out the limitations of applications designed to help identify and deploy consultants.
"When it comes to staffing projects, I have not seen a piece of technology that can make us better at it than we currently are," says Rozanski, who adds that staffing requires a large degree of "negotiation" between parties — something software can hardly replace.
Others say that the shortcomings of the sector's staffing applications are in part due to their origins.
"We first saw applications really emerge at the practice level five or six years ago, and here we saw maybe 300 consultants in Germany buy a solution, or perhaps a practice would build a tool for itself, and these were often crude and rude," says David Hofferberth, an analysts with Aberdeen, who currently track applications development inside the professional services sector. "What's happening now is that we see world-class organizations with five thousand, ten thousand, a hundred thousand people seeking to leverage a single package."
Hofferberth says that before any software can be successfully adopted, the firms themselves had better define their people development strategies.

Too often, the firms have not already defined the portfolios of skills they will need to have to compete in the future.
"We've actually spent a lot of time during the past couple of years defining roles and competencies and career paths," says Wick Keating, chief technology officer for American Management Systems. "We began having something of a meaningful debate around a separate technical career track. Whereas in the traditional professional services path you would start to manage, then be a team leader or a project manager, and so forth, a technical career track would be for those who aren't necessarily leaders, but are critical for solving key technical problems."

The Will to Change

Today, most consultants agree, technology will likely never be able to staff a project without some "internal negotiation" between partners, but it is becoming an effective tool for those firms looking to get a jumpstart on staffing client engagements.
"The technology is going to quickly tell you who is available, and it's going to tell the staffing manager who's affordable," says Hofferberth.
For those firms willing to make the investment, Hofferberth says that it's everyday situations in which the payoff is first likely to come. "You may want this consultant, and this one and that one, but then you'll need to know the profitability, and these tools may tell you, 'Sorry, it's not going to work, given your profitability requirements,'" he explains.     As more firms find themselves once again entrenched in the battle for talent, Hofferberth believes that such transparency is now emerging as a key competitive advantage — one that few firms will be able to ignore.

Sidebar: The Return of the Body Matchers

Last November, Consulting invited a mix of seasoned capitalists and hard-core technologists to discuss how consulting firms can better leverage technology to manage talent more effectively.

While all agreed that technology is playing an increasingly important role in talent utilization and growing profitability, the group's human capitalist members issued a bold challenge to the round table's technology participants when they identified where current applications often come up short — ease of use and integration capability. The following are excerpts from their spirited exchanges.

Booz's Horacio Rozanski: I think that in general, more often than not, we find that what we want to do in terms of managing talent is different enough that there's either no application out there that we feel can do it, or given the applications available, we would have to change our way of thinking.

Interface's Rick Klau: Well, what we see the firms running into today as far as managing talent and applications goes is that they've taken care of the front end, they've taken care of the back end, but they're realizing that they need to take better care of their people — their core asset. But the sophistication of the systems that are out there doesn't keep up with the talent market's dynamics and allow firms to adjust and really adapt.

Deltek's Scott DeFusco: Do your firms have something within your framework that allows you to analyze what the successful person is and what the composite is of that type of person and that gets back on your recruiting process?

Kurt Salmon's Steve Neville: Certain consulting clients are pushing us to leverage what we have in our system, but it doesn't necessarily present in an effective way right now. For example, we can look at project performance very easily and say, "Is this project profitable?" But we find we can't dig down into it and ask the next question as to whether it was profitable or not, and why. And this means getting down to the personal level, being able to report on that and see what the project profitability on an employee level is. So, we're trying to put those metrics together.

Lawson's Lou Pereira: "It's interesting that you say that, because the type of change management that is required to make an organization capable of performing a qualitative and quantitative measure on an individual level is generally something we see firms struggling with. It's not that organizations don't desire it. But too often consultants become very much focused on the next piece of business rather than on closing out the last piece in a way that is measurable and repeatable. Or in a way that would allow the organization to predict future requirements. This is something we see the firms continuing to be challenged by.

A.T. Kearney's Mick Siegel: It can be a direct conflict managing your people and managing your finances. And if you look at it from the standpoint of how to manage people's careers and fully develop them, you would collect and measure and look at certain aspects. If you're looking at how profitable a person is or how profitable a practice is, you look at it from a different dimension and you start looking at what you were saying earlier: How profitable or how financially viable has an individual been? I mean, it's an ongoing battle, and the tools aren't built to do that as effectively as they could.

AMS's Wick Keating: Consultants are in consulting because they want variety and they want challenge and they want growth. It's conflict, and that's one of the reasons I'm always skeptical of that sort of automated assignment. Because a lot of it has to be negotiation: "Okay, I know you really want to move into Java, but we really need you to work on this COBOL project for the good of the firm and all that kind of thing. And I promise we'll put you on a Java project, you know, next time."

Solution 6's Ian Hoffman: A number of our clients, including some of the largest consulting firms, have made employee retention a key performance metric in their human capital management strategy. They are now empowering their consultants to guide their own career development, allowing them to work on projects that they personally would like to become involved with. And this may mean pursuing cross-practice opportunities or other engagements that could help them shape their careers, as opposed to the Big Brother approach, where the firms say, "Who cares about career development? Do we measure this on revenue or measure it on profit? And here's what you'll be working on …" But the inverse would be the more employee-centric model, which is, "It's your career. Decide where you want to go, and go for it."

Aberdeen's David Hofferberth: Three years ago, four years ago, very few application vendors would have sold to the human capitalists within the firms. They really focused on practice managers, because, to be honest with you, it was really all about automating, optimizing, and the people who make the money. I think you've seen a change over the past couple of years to reflect that there is a … you know … now there is a human component. And I think now you're starting to see a lot more involvement with the human capitalists, who now raise the questions: "We know we can optimize profit by doing it this way, but what are the trade-offs? Are we going to burn people out? Are we going to increase turnover, and what does turnover really cost us as an organization?"

Four years ago, five years ago, nobody cared. But now it's like, "Okay, we've got some good application tools, so how can we leverage this to make sure we're trying to treat people fairly yet meet our profitability targets?" And you know, it's a constant battle between the two sides, no doubt about it.

Siegel: Now, there was a point made that I think is important: that the decisions that are made are staffing decisions, and they're pretty tactical and not really career-oriented. In the broader scheme, they drive a person's career, but you don't make a career choice, you make a staffing choice on a project. And the career choice and the direction is a people choice and it's … it has to be interactive, and you can't automate that, I don't think. I mean, you can provide information, but you can't automate that. And so, somehow, whatever you offer has to simplify the ability to do the transactional part of it, but not try to automate things that are really more human in nature.

Rozanski: You know, what's interesting about this conversation is that we're spending a lot of time talking about systems to help you do staffing, which I think is perhaps the place where we find technology to be least useful, other than just kind of giving you basic information. And we're not spending any time about how you use technology to do recruiting better, or how you use technology to manage a lot of ordinary relations better, and all the other things where technology has a much cleaner, more powerful role.

Klau: So far, I think the discussion has been focused largely on how management can use technology to improve the overall business, and not as much on how the individual consultant can leverage the technology to improve their own business. And I think that we know that it shouldn't all be top-down, and that there needs to be just as much emphasis on what can we do for the individual consultant. We need to answer the consultant's question: "What is in it for me?" Or, "Why should I be using this technology?" We need to work within the consultant's world.

Siegel: I think that the biggest area where you could help, at least from Kearney's perspective, is not any stand-alone point, but the interrelationships and connectivity of different points. There should be triggers to where the evaluation process is triggered, the information flows through, and it's all tied together so that the complexity is not for the individual, it's more for the managers of the project. Meanwhile, say that tomorrow we're visiting Chase Manhattan. It's easy for us to find out what projects we've done for Chase over the past ten years, but it's very difficult to find out what people have been involved at Chase Manhattan. And that information is probably as much or more valuable. Now, it's available, but it's in the backhand and you have to dig into it in a certain way. And so, having things somehow more linked, to me, is where the value of the technology would come into place.