A.T. Kearney's Changing of the Guard: After Six Years in Charge, Johan Aurik Reflects on the Firm He's Handing Off to Alex Liu

Aurik: I am very happy where we are as a firm right now. In 2012 when I took over it was only six years after the management buyout from EDS, which was a near-death experience, to be honest. No one was really sure if it would work but it did and it was the best decision we ever made. In 2012, I ran on a platform of we need to invest more in the firm. We need to make decisions and take a stand and invest in areas we needed to be better and we did that. I also said the performance of the firm has to dramatically improve, and we did that. I'm proud of that. The ambition was set to be a leader in our areas of choice and to be among the Top 3 firms in the bigger markets. We did that in the Middle East, for instance. We were not in the Middle East at all and now we're a Top 3 firm there with some 30 partners. The business is changing and it's not a matter of holding on to your past. I knew we needed to invent our future. 

Consulting: What were the highlights of your time leading the firm?

Aurik: Over the last six years, we focused the business in two broad areas: One was Operations, where we've always been super strong. The second one was Transformation in the Digital Area, which is really booming. The pivot wasn't really that dramatic, to be honest. Those areas now account for 80 or 90 percent of our revenue. We tripled investment in the firm and we also tripled profitability, those two went hand in hand. That wasn't a coincidence. I was just looking at the number for this year and we're going to grow 15 percent globally this year in a global market that is not growing at 15 percent. Last year we grew around 9 percent. Historically, we've been growing at high single-digit rates, except for 2008. But since the management buyout of EDS, we've more than doubled firm revenue to more than $1.2 billion. 

Consulting: How has A.T. Kearney managed to achieve that growth?

Aurik: It helps that all biggest global economies are doing very well. China, Latin America and Africa are still a little soft, but otherwise most of the global economies are doing well. Secondly, there's a demand for transformation in almost every industry. They're all undergoing massive changes and they need us; they need consultants. I feel very good about the firm; it's a healthy firm that I'm handing off to Alex. We're debt-free except for working capital and not a lot of firms can say that, by the way. So, that means there's lots of room for continued investment in those areas I've talked about, which is still needed. The world is changing.

Consulting: Where's the industry going? Do you see consolidation? Could A.T. Kearney acquire another firm? Or, perhaps, be acquired? 

Aurik: Well, when it comes to consolidation, I just don't see big mergers among equals—from a change management perspective, it's virtually impossible. What about the big tech companies? Will Amazon move into this space? Will Google? That's certainly a possibility. Will consulting firms continue to buy start ups? Yes, that I think is very likely. There will be smaller acquisitions and tuck-ins to meet a specific solution, for instance. That's where the biggest movement will be taking place, I think. If tomorrow we get an offer from Google, would we look at it? Of course we would, but I don't think it's the right way to go. Partners want to be owners; they want to have ownership of the business. That was my big learning from the EDS debacle.

Consulting: As for the industry, do you think we're at a tipping point?

Aurik: Yes, I think we are. At least in terms of the work we need to do. Every industry needs to transform; every company needs to transform; every CEO is overloaded with too many priorities. Every CEO knows that if they haven't delivered results in two years, they are out. They are all overwhelmed; and if I'm cynical for a moment, that's good for consultants, especially the firms that are focused on transformation as we are. That's one reason our growth has been so good. 

Consulting: How is that client relationship changing?

Aurik: What we sell to clients and how we sell to them is also changing… rapidly. I started in this profession in 1988 when there were no computers at the firm. I doodled on a piece of paper, gave it to an assistant, they typed it up and we put on an overhead projector. That's how I started. Computers came along and now 90 percent of what we do is e-mail, PowerPoint and Excel and that's still the way the business world works, but it's not how our private lives work. Our private lives are more social, sharing, connected. I think there's a huge opportunity to bring those two worlds together… to digitize consulting—both externally with clients and internally. So, we've launched "Next," a digital platform designed to change the way we work. No more Excel, no more PowerPoint, no more e-mail. When I started there was no e-mail and when I leave I'm aiming for there also to be no more e-mail. It's a drastic shift. Everything is on the platform—both for consultants and clients. So, all the knowledge we have as a firm is online and constantly updated… that's such a different way of working. We launched this about two years ago it's really starting to take hold. In two years, I think 75 percent to 80 percent of our projects will run this way. That's a big shift.  

Consulting: How do you see that impacting the talent you bring in?  

Aurik: More than one-third of our people are specialists. In a few years, that will be more like 50 or 60 percent. As for talent… well, a good portion of the work will be done by machines and bots and human beings will focus on what human beings are good at. This is a fascinating time. What an amazing time to be a consultant, but talent is still a huge issue. The capabilities that we're looking for are not easy to find. In fact, it's almost impossible. You have to grow them rather than try to find that. It still takes 10 years or more to grow a really successful partner. 

Consulting: What are clients demanding? How is that changing? 

Aurik: When I started, consultants had many advantages: We were better communicators than our clients; we had more information than our clients; and, we provided analysis our clients didn't have. None of that is true anymore. Today, the big premium is on making it happen —implementation, transformation, change management… that's the value we add today. That's a very different model than even just a few years ago. We are getting closer to the executive suite because there's so much change and uncertainty among executives. Instead of a partner being 30 percent utilized, it's much higher. They are focusing more heavily on fewer clients and those relationships are becoming stronger. That's a good thing. That's really the way it should be, after all.