As the fundamentals of business continue to change, companies' priorities are shifting. From lean-and-mean product portfolios to streamlined supply chains, "less is more" seems to be the new mantra in the post-Great Recession business world. Daniel Mahler was recently appointed as A.T. Kearney's Americas Lead. Both are no stranger to the pages of Consulting —Mahler was named a Top 25 Consultant in 2008, and A.T. Kearney is a mainstay on our annual Best Firms to Work For rankings. Mahler says the firm has kicked off a major three-year growth initiative, which if successful, could "close to double" the size of the Americas practice over the next six years.
Consulting: What are your main priorities in your new position as Americas lead?
Mahler: To continue the trajectory we've been on for the last six years. We are growing at a healthy rate, the priority will be to accelerate that growth over the next five to seven years to further increase our scale and position as a global full assortment player. Number one I would say would be accelerated growth. And within that, to make sure the enablers are in place to ensure we're investing in growth below North America, so Latin America to a degree, and have a portfolio approach to invest into growing in our most important industry practices. The growth will come from two places, organically, or with a "business-as-usual" mindset, a high single-digit number. Secondly, we're planning a very concerted effort to step-change our inorganic growth with an additional high single-digit growth number on top of that over the next three years globally. The Americas region will be a focus area as part of that global three-year growth program. Just to be clear, when we talk inorganic, we don't see a big acquisition on the horizon, it will be largely accomplished through individual attraction of senior talent to the firm.
Consulting: What countries in South and Latin America that A.T. Kearney is particularly active?
Mahler: Well 70 percent of the consulting market is in Brazil and Mexico, we have strong offices there but most of our investment will be doubling down on them. If we look at the Americas as a region, the vast majority of our growth over the next five to six years will come from the largest consulting market, the United States, where we still see major opportunities and the macroeconomics are in favor to step-change the growth trajectory and grow faster than the market.
Consulting: Can you talk about big growth opportunities on the horizon?
Mahler: Current hot topics that play to A.T. Kearney's strengths, include the reconfiguration of U.S. supply chains that are really triggered by the energy revolution and the favorable labor cost development versus China and discussions around onshoring. That poses a big opportunity but also lots of structural challenges for U.S.-based companies about re-thinking their supply chain, manufacturing network, the skills they need and a capital strategy associated with that. All classic strategic operations topics that go to the heart of our capability. The second big talking area that has crystallized itself over the last few years is all about simplification, simpler, more nimble organizations, but also much simpler product portfolios which have really disproportionately grown to what consumers really want. We're helping companies kind of dial back smartly on the offerings they have without losing a bit in their revenue and growth ambitions is very tricky but is a very strong offering of ours and we are investing heavily in that across industries. It started with automotive originally and it's something we're now seeing in consumer products, the B to B space as well as, interestingly, in the services arena including financial institutions. So, a simpler portfolio while still being super-attractive to the consumer.
Consulting: What are the firm's top growth practice areas?
Mahler: We're not putting our eggs in one or two baskets. We have gone through a very rigorous portfolio exercise where we looked at what will be the battlegrounds we want to win and are the most attractive. I would say financial institutions, probably a double down on consumer retail and gas are probably the largest.
Consulting: What are clients demanding?
Mahler: Next generation supply chains; the fundamental economics of what should be offshore and onshored have changed. I think clients are sitting on a lot of cash, twice as much prior to the financial crisis, so there's a big question of how to deploy that capital smartly and build operations fit for the next 10 to 20 years. That's a big, big ask. The other is about simpler, nimbler organizations and product portfolios without missing a beat in the market.
Consulting: Future of the practice?
Mahler: I think it's fair to say we shouldn't be surprised if we see A.T. Kearney Americas close to double in size over the next six years. As I mentioned earlier, we have just kicked off a three-year unprecedented growth initiative that should give us high single-digit incremental growth over our business-as-usual growth to get better scale in the battlegrounds we want to win. Globally we're looking at high single-digit growth from our growth initiative, next three years we should be more in the 15 to 20 percent range.
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