Chicago-headquartered West Monroe Partners is a regular on our Best Firms to Work For list, making its fifth appearance this year. And there's a good reason for that. The firm has been on an impressive growth track—38 percent so far year-to-date—it also recently gave the company to the employees, implementing an Employee Stock Ownership Plan structure, and is looking to aggressively scale its operations on both coasts. Co-founder Kevin McCarty, who assumed the role of CEO just last month, sat down with Consulting to talk about his new title, the future, and West Monroe's quest for 1,000 employees.
Consulting: You co-founded the firm and have been president for two years, talk about the transition to the CEO role.
McCarty: I co-founded firm with Dean Fisher in 2002, who was my boss and mentor back in the Arthur Andersen days and it continued that way as Dean and I grew the firm. Two years ago I took on the formal title of President, which gave me operating responsibilities for all the offices and practice lines across the firm. When the Employee Stock Ownership Plan conversion was transacted in December of 2013, that set the wheels in motion for Dean to step back and take on the Executive Chairman role and allowed me to start preparing for the role of CEO.
Now I report to the board instead of reporting to Dean himself. I'm accountable for achieving the vision we set forth not just for next year but the years to come. I'm responsible for deriving, setting and delivering on the strategy that the board wants to see executed. Part of that is continuing rapid growth. We're up 38 percent year-to-date, on top of last year where we grew 28 percent. Our next stop is 1,000 people. We're at 550 now, and we're looking to get it to 1,000 over the next 2-3 years.
Consulting: What's your plan to get there?
McCarty: We're investing heavily on the West Coast to get to scale. We have operations in LA and Seattle but they're not quite to scale yet. We've got to get the West Coast to 100+ people as well as the East Coast, including New York and Raleigh-Durham. Chicago is our largest office but we've got to grow on the coasts, that's core to our strategy as well. We have an exclusive relationship with BearingPoint in Europe. That's how we conquer Europe, we're part of a global alliance.
Consulting: What are some of the big growth areas you've seen for the firm?
McCarty: We service industries that typically are undergoing radical transformation—we don't really service industries that are kind of status quo or lumbering along. Healthcare with the Affordable Care Act, energy and utilities with smart grid and the deployment of alternative energy, we're in financial services, especially in banking and capital markets. Insurance we believe is an up and coming area, we're starting to do a lot more with regards to insurance companies thinking more about mobile and customer experience and digital. We also have retail, which is being threatened with online models looking to become more efficient. Also hot is the area of M&A. We do a lot of M&A work across those industries as well as for private equity in any industry. We're a very prominent player in the world of private equity, which we're ramping up in both New York and LA.
Consulting: What are some big challenges facing clients?
McCarty: The talent shortage—if we have the talent and clients cant get things done and they need to be responsive to the competitive landscape changing and they need to act quickly and flexibly and a lot of that is technology. The technical skill shortage is very prominent. We believe our clients are struggling with having the investment dollars but not having the technical horsepower to go fast enough.
Consulting: What's West Monroe's plan over the next five or so years?
McCarty: You're going to see new branding from West Monroe coming out in 2015 as we drive to 1,000 people. We're investing in things that will provide us scalability. There's internal infrastructure you need to invest in along the way—office space and processes and technology—where other firms might not necessarily put as much of a priority on that because they're more worried about growing business development and marketing. We actually have since day one invested heavily in our internal infrastructure. We don't want to be a house of cards that's structurally weak but puts out an image in the marketplace that we're big.
We are extremely strong culturally internally, extremely strong process wise, between training, career development, recruiting and onboarding, and systems and process. Our brand needs to catch up, quite frankly, with the foundation we actually have. That's going to help us continue our rapid growth without toppling over. The ESOP is an attract-and-retain mechanism, but it's not a thing we do to attract and retain—we just think it's the right thing to do. We believe in sharing the wealth of hard work. Consulting's tough: you're asking people to sacrifice a lot of their time and personal lives—it's a lifestyle. And we don't think that lifestyle should only be rewarded financially to the partners, which is the way a lot of firms are structured.
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