Why does good consulting advice fail? One of the biggest reasons is that all too often the process or operational change fails to factor in how people will respond to the change. That reality is a key reason behind RHR International's success—both in the way it handles clients' challenges and internal changes. To learn more, Consulting One on One recently sat down with the firm's CEO and Chairman Tom Saporito.
Consulting: How do your firm's more than 80 psychologists differentiate RHR?
Saporito: Broadly, average CEO tenure is falling, down from about 8.5 years to less than six years. And when the CEO changes, it ushers in a new vision, new challenges, new structure, new teams, and a new cultural agenda. And that much change at the top creates organizations with huge consulting needs. Meanwhile, our client base is far more sophisticated than ever before. Their attention to the human dimension—and how it affects business outcomes—is higher now than at any point in the 67 years we've been in operation. Our unique talent base addresses their needs by focusing on that human element.
Consulting: How did the Great Recession impact your business?
Saporito: The recession was one of the worst and best things that ever happened to us. At the beginning of the recession, I oversaw a complete strategic review of the business and all of our service lines. The goal was to determine what kind of work would be stable during the recession and what would not. When you've been around for as long as we have, it's inevitable that you expand your set of offerings. And we had moved into a number of different services. There was a lot of work that was in lower price point/lower margin areas, but the revenue stream that was the most stable was the higher price point and higher margin engagements, which is where our roots are. We redefined our strategy and positioning and, in the end, changed almost everything. We changed the definition of our core services and got out of certain kinds of work. We narrowed down our focus back to the things that defined us at the beginning and what we're best known for: senior management issues.
Consulting: How did you sell these kinds of massive changes internally?
Saporito: We began with a fact-based analytical approach. We then benchmarked our new plan against the profession's best practices. And then we shared our findings and said 'here's the data' and stared it in the face. We then pulled together our senior-most people—about 15 people—and committed ourselves to one another and to our future. And our people rallied around this new plan. The result is a management culture that's inclusive all the way down to the bottom of the pyramid. The difficult task of restructuring the firm has been made easier because senior management is excited.
Consulting: What's been the result of these changes?
Saporito: Profitability has dramatically improved. Compensation is rising. And, most importantly, our people are excited.
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