Partnership a n
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Our values We are run by ormer management consulting We partners and hold ourselves to the highest proessional standards. We maintain a culture o achieving your goals, by organizing ourselves to place your interests rst. Wee practi W practice ce seven value values. s. We impart seven values. Intellectual humility humility.. Wee generously dispense advice while engaging W stakeholders on the belie that respect is a right. It is not earned. Proessional integrity integrity.. Both during our pursuit o your goals, and thereater, we hold ourselves to the highest proessional standards. A values-driven organization. Wee are not a value-driven W value-driven organization. organization. We We do not pursue prots. We place the best interests o our clients, and their stakeholders, beore our own interests.
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Keep inormation confdential. Wee do not advertise nor market ourselves, or W discuss condential inormation. We We best serve our clients by only enacting initiatives to support their ambitions. Intellectual honesty honesty.. Wee are willing W willing to accept accept the acts acts or what they they are, but purposeully reinvent ourselves in the process o responding to uncomortable realities. Demonstrated competence. Wee do not promote ourselves. Our W Our intentions, and results, will determine our destiny. Developing well-rounded leaders. Wee will develop your will, capacity and capa W bility to accomplish a goal.
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contents editor’s note
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author’s biograph y
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rom pepsi to bain
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year one
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mece, 80/20 and other orms o tough love
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irst project with real responsibility
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rapidly turning around a struggling eastern european airline
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strategy,, operations and implementation strategy
29
common sense
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manager
35
client whisperer
41
rational, emotional and political skills
46
the test
52
altmaty, kazakhsta n
58
partnership
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meetings, meetings, meetings
72
irst class mentor
80
reality check
83
vacation and then some
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sabbatical
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wh w harton, 2010
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epilogue
110
interview with the author
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interview with the author’ author’ss wie
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interview with the author’ author’ss mentor
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other books in the series
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edit or’ or’ss note erence needs no introduction. He is our single most prolic and insightul contributor. Tat his earliest writings should have led to a complete book was a natural step. His rst articles about his start in management consulting needed to a wider audie audience, nce, and a book book seemed like the best venue to share his consulting experiences. Te author is a close colleague. His story is interesting or the lessons he extracts rom numerous experiences, the candor with which his motivations are shared and some o the interesting decisions he makes later in his career. career. In editing this book, we avoided judging his decisions made or editing the prose to constantly convey a shimmering version o management consulting. Consultants make mistakes as well, and these provide just as many pivotal teaching moments as any textbook success story. Te author is, however, an active management consultant at one o the world’s most prestigiouss rms. We prestigiou We have gone to great lengths to protect identities and client details, yet in a manner which does not distort the lessons or eliminate the contextual details. Moreover, we have at times altered Bain terminology so that the general reader may understand concepts. When reading this book, while taking note o the signicant detail which is o course extremely valuable, I would urge readers to think about the decisions made and the interplay with personal personal motivatio motivations. ns. Don Don’’t be blinded by the mechanics o the decision making process. ry to understand the motivations, options and the criteria to make the decisions. At the end o the day, all decisions are a trade-o and values have a cost. Discussions about the cost o values are rare, because MBA students and the media are obsessed with primarily examining someone’s resume and biography or their successes. Many worship those on the ront pages o the Wall Street Journal. How they arrived on the cover is less important to the vast majority who use ront-page adulation as a new power index.
Leadership is measured in nancial terms, a siren-song or many aspiring management consultants. Like the mythical Greek creatures, this will wreck your career. Leadership must be about more than power, money and inuence. By our current denition o leadership both Nelson Mandela and Hitler would be calle called d leade leaders. rs. In act, they were in their times. Both had power and inuence in extraordinary abundance. Yet, in hindsight, to call them equally great would be a perversion o the study o leadership. One presided over the most peaceul democratic transition in recent history and diused a pending civil war by standing by his values and did so by preserving the sacred symbols o his oppressors and then voluntarily stepping down as President. Te other created a system rom which we are still recovering. Having values and the willingness to bear the cost o ollowing them is what distinguishes leaders like Marvin Bower rom those who merely preside over a steep share price increase. Show me a proessional who stays true to his values in the nadir o his career, and keeps his colleagues inspired by those same values, and I will show you someone someone who understands understands manmanagement consulting values. What comp compels els peo people ple to disr disregar egard d thei theirr val values? ues? A commenter on the New York imes responding to Greg Smith’s inamous Goldman Sachs resignation letter alludes to the answer, “I have ound that epiphanies usually occur ater the youngest sibling has successully negotiated his/her expensive college and/or the appropriate share package has matured.” Tis is a poignant insight. Never put yoursel in a position where your nancial commitments orce you to do things you otherwise would not. You would be surprised how this creeps up on you. One day you are an eager MBA student genuinely shocked about the behaviour o Bernie Mado, yet teen years later you could be an executive just keeping your head above the water. Always have the nancial reedom to walk away when you need to. Your integrity is your moral credit rating. Many o you reading this book will soon be entering the world o management consulting.
Consultants attend similar, i not the same, schools, work at consulting rms all spouting similar codied codied values values on their websites, take similar electives, study under similar proessors, use the same textbooks, y the same airlines, have the same riends, the same clients, use the same databases, even work with the same people, while sleeping in the same hotels. You Y ou are thereore, not dened by those common parameters. Nor are you dened by your backgrounds or values. You Y ou are dened by your ability to accept the cost o your values. oronto, Ontario February 2012
partnership (ˈpɑːtnəʃɪp) -n 1
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a. a contractual relationship between two or more persons carrying on a joint business venture venture with a view view to prot, each incurring liability or losses and the right to share in the prots b. the deed creating such a relationship c. the persons associated in such a relationship
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the state or condition o being a partner
I n t r o d u c t i o n
author’s biography Te author was a consulting partner at two leading international management consulting rms. He has worked on engagements in the USA, UK, Brazil, Romania, Hungary, Spain, Israel, urkey, Russia, France, Mexico, South Arica, Dubai and Ireland Ireland.. He rose rapidly through the ranks and made partner in an accelerated time rame. Tis book is based on the popular guest columns he wrote or Firmsconsulting.com describing his eventul journey rom Pepsi into management consulting and his lie as a consultant. Although Althou gh he has worked across numero numerous us sectors and unctions, the author has primarily ocused on the aviation sector in this memoir: developing the business case on an I strategy project or an airline company company,, turning around a struggling Eastern European airline in preparation or an IPO, creating a new low-cost airline, benchmarking an airline’s productivity, merging two airlines, selling an airline and diversiying a European aviation rm, amongst others. Single, he spends his spare time skiing, s kiing, painting, rock climbing and teaching his dog new tricks. Te author holds an MBA with distinction rom an elite program, and dual degrees in literature and mathematical physics rom the US where he graduated graduated as class class valedictorian. valedictorian.
1 Collins English Dictionary - Complete Complete & Unabridged 10th Edition, 2009 © William Collins Sons & Co. Ltd. 1979, 1986 © Harper Collins, Publishers 1998, 2000, 2003, 2005, 2006, 2007, 2009
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rom pepsi to bain Money, or should I say, a lack o money was one major reason to join management consulting. It was not the only reason. At 21 years o age, I was an assistant brand manager or Pe Pepsi. psi. Te pay was, however, not great as I had only been in the position or 1 year and I had no advanced degree. Te work at Pepsi was also interesting but not dynamic. I joined Pepsi or three reasons. First, I wanted a premium Fortune 500 name on my résumé. I thought this would help me in the uture. Second, I wanted exposure to Pepsi’s amed management training programme. I had heard about their model o throwing young hires into the deep-end and seeing how they swam (or sunk). Tird, I was hoping to get an opportunity to travel to some exotic outpost like Kenya or Hungary, or maybe relocate as an expatriate. Te culture was great and the people were riendly. Te company also treated me a little dierently rom all the other management trainees. I had a degree in physics rom a top school on the west coast. Pepsi did not seem to attract many candidates with my prole. I they did, it was certainly not in sales, as they were likely likely shunted into into a white white lab coat, given an array o markers, a clipboard and a cubicle in R&D. I quickly distinguished mysel with my analytical abilities. I believe the th e term “excel-jockey” was used a ew times to describe my ability to manipulate numbers and extract data. At the time Pepsi had hired Nielsen AC to measure its stock availability in store. Pepsi was a signicant account or Nielsen AC with an army o quantitative gurus working on the account. Each week and month, Niel Nielsen sen AC sent through complex excel sheets describing the out-ostocks (OOS) in each major shopping centre and region. OOS mean a lot to Pepsi. For one, too high OOS means there is no product on the shel. Tis means lower revenue. On the other hand, too low OOS could mean lower inventoinvent ory turnover and larger commissions to the sales team who were partly rewarded on the OOS
gures. Getting the correct number was critical. I remember remember poring over the OOS numbers numbers and thinking to mysel, “this cannot be right. Te numbers do not balance.” I took my concerns one level up. Nothing happened. Te brand manager did not really seem interested in xing the Nielsen numbers. In hindsight, I think the liberal arts major rom Princeton did not ully understand the numbers. In his view Nielsen could never be wrong. I took it one more level up and was told to x it i I thought something was wrong. I am pretty sure I was given the go ahead since the category brand manager did not eel it would lead to anything and, at the very least, it would keep the new kid out o trouble or a ew days. So I collected all the Nielsen excel sheets or the last 6 months and recalculated recalculated them them with my new ormula. I then took my sheets to Nielsen to explain my new approach. Despite some obvious resentment that a skinny 21 year-old kid was showing up the amed statistical minds at Nielsen, they reluctantly agreed my numbers were correct, and then tried to pretend the changes were inconsequential. Tey were not. Recalculating the sales commissions showed that Pepsi was paying close to $80M in excess commissions. Tere were some strong words between Pepsi and Nielsen, and I think Nielsen lost a air amount o business. Tat pretty much made my career at Pepsi. I was now the golden child in a sense. My gymnastics with numbers did not stop there. I also worked out a better system to track the perormance o Pepsi’s external sales support sta. Tis technique led to OOS dropping to less than 5%, rom 80% in one retail channel, in the pilot. My uture looked good. Less than 9 months ater joining I was asked to move to Pepsi’s head oce and help lead an initiative to bring some o my “analytical spark” to a new and important unit that was trying to help with in-store promotions. I was excited. As I was settling settling into my new position, position, I was also looking or a new apartment. I realised that over 50% o my take-home salary would go to my new apartment. It was not even or a nice place. I was living in a dingy little basement
apartment – albeit in a rather premium neighbourhood. Tat same month I also received my increase. It was just 7%. I gured out airly quickly that everyone else in my group o management recruits were receiving the same salary and had obtained the same increase. Given my track record and demonstrated success, it really stung that I was not gaining the additional recognition I deserved. I looked at the other management recruits and they had both weak resumes and weak results on the job. Most were arts and legal majors rom rom lesser-known schools who ended up at Pep Pepsi, si, rather than choosing Pepsi like I did. Not a single management recruit, my peers, could point out tangible and measurable initiatives they had led which had benetted Pepsi. Not one. Tat demoralized me more than a little. I remember going home early that evening and uming that my eorts were not being being rewarded. rewarded. A brand manager I had beriended realised realised I was unhappy and oered to take me to lunch to explain how salaries are set and why it is not the only measure o success and progress. Despite all the nice and important things he said in that lunch, and oering to pay or the duck, all I remember was an aside comment he made about his wie working at the management consulting rm, BCG, and the huge salary she was making. Te next day I decided to come into the oce later than planned and spent a good ew hours on the internet at home nding out about the world o management consulting. At the time, there there was not much inormation about the interview and recruitment process. Tis was pre-Google. Most inormation, little that there was, was written by juniors and associates, but nothing by the partners themselves who make the major decisions. What’s the point o listening to juniors? So I called up a ew head-hunting rms whom I read about online having successully placed candidates at McKinsey and Bain. At the time, since the brand manager’s wie was a Rhodes Scholar and Harvard MBA who had once represented her country at the Olympics, I assumed BCG people were way out o my lead, and thereore, the rm was out o my league - an error on my
part. Ater a ew calls and messages, I ound a rm who had been successul with consulting placements and currently had a mandate to nd new associates or McKinsey. Bingo. I sent my resume across. At this time, tim e, my resume resu me did not have much muc h on it. It was pretty bland. I studied at a UK boarding school and I was the Head Preect. I had won several awards at High School. I was a debat debatee cham champion. pion. I was pres president ident o my university physics team and president o the science society. I was also a member o a ew organisations or smart people. I had played baseball at university and was also involved in track and ield at high school. What I did have on my side was that I was conident, some would say cocky, a polished speaker and dressed like a proessional. I looked the part. I did well enough at university but somehow my accomplishments seemed hollow when compared to the consulting proiles online. Te head hunter was nice enough but very direct. He made it clear that the best shot I had would be to join a consulting consulting rm at the entrylevel. I needed to shoot or the business analyst position. I was a little disappointed until I heard the salary range. It was easily twice what I was earning. He also thought my resume was poorly ormatted and I needed to particularly show our things: Exceptionall academic results and demonExceptiona strated leadership (“a V.P. o anything is a leader o nothing”). A broad range o interests. Demonstrated success in both my proessional and personal pursuits. Someone who showed they could succeed as a proessional. He wanted a one page resume and told me to go or the Ivy League style. He sent me a sample rom a Harvard graduate. By this time, my heart was just not into Pepsi. Despite my successes and obvious value to the business, I still could not get over my paltry increase which seemed to be the standard or all employees. Te company car was obviously a bonus, but that novelty soon wore o as well.
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Paying 50% o my salary towards my apartment was also heavily impacting my lie. Not to mention that the exorbitant price o beer was severely cramping my wallet. Te remaining 50% was split between ood, paying o my study loans and the meagre remainder went to wards my nascent social lie. Dating was expensive. Most o my remaining days at the oce were spent reading the paper and just waiting to go home. It was a real drag. Te people were great and my new assignment was going well, but all things considered I had to go soon. I was not enjoying my time. Te head-hunter had managed to secure me interviews at 3 major rms and one investment bank. Tey were all antastic companies: Bain & Company Monitor Company McKinsey & Company Morgan Stanley Te Monitor interview was a disaster. For one, despite all the advice about being prepared or case questions and brain teasers, I was not ully prepared. I also elt that the Monitorr partners running the interview were Monito just not happy to be there. Tey were slightly condescending, made banal remarks and seemed quite proud o their rm. Tey were more interested in explaining how superior Monitor was to McKinsey than they were in interviewing me. Te case was a disaster. Te rest o the interview was a disaster. I needed no urther response rom the rm to know I was not going to be called back or another round. Te head-hunter called me. His eedback was that the partners elt I was good but “not wired to think like a management consultant.” Ouch. Te Morgan Stanley interview was something else altogether. Despite being all o 22 years o age and holding an undergraduate degree, albeit with almost a ull 100% average rom a great school, I was going to be interviewed by the Senior Managing Director running M&A and his two deputies. It did not get any better than this. Te interview was on a really hot and muggy summer’s day. I drove out to Morgan Stanley’ Stanle y’ss head oce where w here I was • • • •
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ushered into a massive boardroom and took a seat at the ar end. Shortly thereater, the three gentlemen arrived. I was not intimidated in the least. Tey did not seem ocused on testing my analytical skills. My resume seems to have provided sucient comort on that ront. It was a great discussion as as they shared their their vision vision or the business, what they were looking or and why they needed someone super-smart and with burning ambition to serve as their own “brain” to support them in meetings, discussions and planning sessions. I was going to be a gloried executive assistant. Yet, the proposed salary more than made up or that slight in title. Tey seemed keen and pushed or me to see the HR director the next day. Te Morgan Stanley oer disappeared when the HR EVP vetoed the oer. In her words “he is not a person who will succeed or be happy in the background.” Damn. Bain & Company’s oce oozed opulence. It was intimidating intimidating and you could sense sense the mental energy in the place. People were polite, well dressed and seemed to have bought their clothing rom the same place. I remember sitting in the interview and trying to count the stitches on the sleeve o my interviewer’s white, Frenchcued cotton shirt. My written exam went well and I was nished in about 30 minutes so I had a good 40 more minutes let over. My rst case also went well since I spent more time preparing. My second more detailed case was also a success. It’s easy to read the outcome o the case by judging the interviewer’s demeanour and response to your answers. Tese guys were enjoying the interview. On the drive back rom the interview I received a call rom the head-hunter saying that Bain was happy and wanted to move me to the next round o interviews. Te next round was two 30 minute cases with separate partners. One was a medical market diagnostic case and the second was an insurance company growth case. I actually enjoyed the cases. Te partners were engaging engaging and we had a good conversation throughout. It elt more like a pleasant conversation than a test.
From my Monitor case experience, I had decided to sketch out my Bain case response on the white board since this created more space with which to work, and so it was easier or the partners to see my response and I could make edits easily. I used the ollowing techniques in both cases: Step One: What is the question I am answering? Step wo: What data do I have? Step Tree: What constrain constraints ts do I have? Step Four: What is my decision tree or hypotheses? Step Five: alk the partner through my thinking. Tis approach was very well received. I think the partners liked my open approach; they appreciated the act that I communicated all my thinking with them. It is important to realise that cases do not always have only one answer. You Y ou could very well arrive at a dierent, but plausible answer, rom what the partner has in ront o him. Tereore, in the event that you provide a dierent answer, the interviewers should understand how you arrived at it. Te thinking process to arrive at the answer is much more important than the real answer. Hence one needs to ensure that the interviewer understands how the answer was developed. Te worst thing you can do is simply pop out an answer and then be unable to talk the interviewer through your approach. I was called back or more interviews the next day and an oer was nally made on the ourth day.. I was very surprised at the speed o things. day Yet, Y et, based on the more than 200% increase in salary, how could I say no? I accepted. At the time, I did not realise that McKinsey was seen as the premium management consulting rm. I I had known, I may not have taken the Bain oer and would have waited or the McKinsey oer oer.. Howe However ver,, the Bain experience was a truly polished aair. Te place was humming with cerebral energy. Everything was proessional and classy. Tey were thorough and prompt. No delays between interviews or ater interviews. Tey seemed to know what they wanted. People remembered •
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my name and while they were tough and very smart, I elt welcomed. oday, I know better – the rms r ms are on a par, with McKinsey and BCG widely considered the more eminent strategy rms. Tis was a second reason or joining a management consulting rm. Everyone talks about them like only the best and brightest can get it. It’s almost as i you are stupid i you have not worked there. Tis elitist eeling does tug at one’s ego. It was a badge o honour that I was indeed smart. I sounded like a preppy boy scout but I did not care what others thought. I was moving up in the world. Leaving Pepsi was not easy. Despite my disinterest and laziness towards the job at hand, things were going very well and the powers that be were eyeing me or bigger things. Both o my managers were away on an Arican Saari. I thereore decided to ax my resignation letter. Tis was a bad idea. I think they were personally aronted that I would not try to call them. Tat said, they asked me to hold on and came back early to talk me out o my resignation. I was own to Miami, where they were in transit, and taken down to a antastic dinner on the marina. Not too shabby or my rst trip to Miami. Tey mentioned how much I had done or Pepsi and how impressed the company was with my perormance. It was a long discussion discussion about what my uture could be. Tey showed me a huge home belonging to a Pepsi executive and said that in 15 to 20 years I could have something like that. Given their eorts to keep me, I elt pretty bad about my ax. I told them I would think about it though I had already decided to go anyway. I think too much damage was done with the ax and my thoughts about leaving. I was also upset that it took a threatened resignation or them to see my value. Despite what they said, I knew I was doing a better job than my peers but receiving the same salary. Tis did not seem at all like a meritocracy. Te rst thing I did when I handed in my company sponsored car was to walk across the street to a BMW dealership and drive out with a convertible. I thought I had arrived.
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Bain & Company is an interesting company. “Bainies” as they reer to themselves take enormous pride in their culture and the “true north” value system which lies at the core o their cultural values. On my rst day at the oce, sitting through an induction led by a team o partners, the ollowing three points were driven home: Bain believes in developing solutions which work. Te Monday-mo Monday-morning-prinrning-principle was the belie that any Bain recommendation must lead to an action that could be implemented by the client on Monday morning. Bain believed in the 80/20 rule. It is better to have 80% o the best answer, provided this could be implemented by the client to obtain success. Chasing the best theoretical answer with no room or or operational success was not an option. Clients come rst. Period. Bain ties this to their “true north” value system o only doing what lies true to their value system, and by deault, the client. Wee went through a long induction period W lasting one complete week. A whole host o topics were covered in this intense mini-Bain MBA week: History o Bain Bain Approach to Management Consulting Bain Value System Bain Path to Partnership Bain Knowledge Systems Research Skills Presentation Skills Writing W riting Skills Skills Speaking Skills Dressing Skills Engagement Etiquette Oce Etiquette Etiquette or Engaging Clients Maintaining Maintaini ng Client Condentiality Te thing that immediately hits you at Bain is the intellect and wide-ranging skills o the •
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people in the room. In my group o 12 new hires one could nd a NASA rocket scientist, a Rhodes-Scholar economist who served on the Clinton campaign, several Harvard, Wharton and Stanord MBAs, a ormer musician turned MBA rom the University o Chicago (now the Booth School o Business), a poet and Fulbright scholar…and then me; a junior physicist. Tereore it is an intimidating place. Tat kind o pedigree exists throughout the rest o the organization. Bain is unique among management consulting rms or several reasons. Bain is the only one o the truly prestigious rms to be run by a woman, Orit Gadiesh. Gadiesh. Orit is chairman o the rm. You should read the interesting Harvard Business School Case Study or her complete story.. Her tough survival story sur vival attitude is part o the Bain culture. Bain almost went bankrupt when I was with the rm. Tis embarrassed the rm immensely but also made them more conservative and orced them to put in place measures to make sure this never happened again. Tereore Bain seems to be very analytical when examining its own actions. Bill Bain walked out o the Boston Consulting Group along with a handul o key people to set up Bain & Company across the town rom his ormer employer.. Te rm tends to avoid discussing this part er o its history. However, it does shape who they are. It’s almost as i they try so much harder to bury their past. You Y ou do not read much about the jockeying or personal prole, power and prestige, but it’s there. With so many big egos around the room, everyone is trying to outdo the other and be seen as serious competition. Te positioning and verbal spars do not come across acros s clearly. Te Bain partners and existing employees employees try to create a more collegial atmosphere, but spats are bound to happen and are a consistent theme in management consulting rms. With such high salaries, so much at stake and reputations on the line, everyone is trying to one-up the other person even i this is done ever so subtly. Te business analysts/consultants/associates (dierent rms use dierent names or the entry-level position) were separated rom the
more senior associate level recruits. Te six o us went through a more detailed orientation about the Bain approach to research. ypically, even the analysts are staed onto engagements. However, Bain was going through a period o rapid growth and the research support systems worldwide were struggling to keep up. A decision had been made that three o the consultants would be assigned to an internal role primarily to support the partners on clientdevelopment studies, while others in my group would go into client acing roles. I was one o the three placed on the internal role. We would be a type o internal research unit only supporting partners in my oce. Another Bain partner and three managers would be assigned to the unit ull-time to ensure it could operate to the highest Bain standards. I remember looking orlornly at the other consultants as they went out onto client site. It was seen as a badge o honour to be on a live engagement working with clients. Despite what the rm told us, we elt as i we were not not ready and needed to be trained in this sae environment. O course it was probably not true, tr ue, but that’s the way we elt. Although it could have been true - I have not yet seen my complete le, and probably never will. On our rst day in the unit, we three consultants went out or lunch. One o the consultants was quite upset because she elt her career would be held back and she was not developing hersel by working in the oce. Over steak and grilled vegetables we decided that i we were going to be the internal team, then we would be the best internal team ever. We would make the Bain partners see the enormous value we were generating. It went without saying that all three o us were secretly wishing we would be the rst to be assigned out o the unit and onto a project. A couple o massive new engagements with new clients put a crimp in our plans. Rather than having a generous leadership group with a ull-time partner and three managers, the research unit was soon down to a part-time partner,, spending just 30 minutes per week with us, ner and one ull-time manager, who rankly spent more time outside the oce than helping us.
I later learnt she was going through a divorce at this time and wished I could take back my negative thoughts about her perormance. In hind-sight the lack o dedicated support turned out to be an amazing blessing. Te senior partners in the oce started spending more time with us; we were were given given more more senior senior roles roles to carry out and since we needed more support, and we were sent on much more ormal training to exotic destinations like London. Well, exotic or me anyway. Spending time with the senior partners was especially important, and hugely benecial. A benet I would only understand in the uture. For our colleagues on engagements their perormance was ed through several lines o communication beore it reached the partners. We were however working directly with the partners. Our success or ailure was entirely in our hands. Tere would be no miscommunication. One month into our time in the unit, a major opportunity arrived to demonstrate the unit’s value. Bain had been trying or some time to break into a major biscuit company. For the sake o writing, we shall call this company Nabisco (although it was not Nabisco). Bain had tried a ew times to build a relationship with the COO on operations operations issues, but nothing ever really happened. McKinsey had somehow always managed to arrive at the right time to snatch away the work. Nabisco was going through a CEO transition and the new CEO wanted to relook at the portolio o brands in the business. Since the new CEO did not have a preerred consulting partner nor did he know the industry, he invited a Bain partner, his MBA class colleague, to discuss ideas or improvement. With the change o the guard, change in the clients’ board and conicting diaries, the rst o these meetings was set or 10 weeks into the uture. Tat gave us plenty o time to put together something ormidable to support the partner. Working W orking with the partner partner,, we mapped out a strategy or the discussions. We clearly did not know enough about the sector and client. Tereore we developed a two-pronged approach.
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First, we could not do the research to tell them what was not working and needed to be improved. We did not have access to the data and that would need to be the engagement itsel. Tereore we decided to do a study to show the client how he should go through analyzing his company. Second, we decided to show him the instore consumer perspective. Working W orking with the partner was a antastic experience. He drummed into me and showed me the value o an approach that I still use to this day and have carried with me even when I let Bain or another consulting rm: Be clear about the question you are answering. Ask yoursel i answering answering this question would allow allow you to reach reach your objectives. objectives. Te wrong question is more damaging than the wrong answer. Break down this core question into smaller sub-questions. Te questions must all be mutually-exc mutually-exclulusive and collectively-ex collectively-exhaustive. haustive. Getting the handle o this was painul. However, MECE is one o the single most important skills in management consulting. Design the analyses to answer the subquestions. Collect the data or the analyses. Run the analyses. Causality is king. I you cannot prove causality you do not have a basis or making recommendations. Go back to the start and test or logic, test or completeness and test or commonsense. Tis is the management consulting way. In every single engagement and across thousands o issues, I have successully used this approach. It is the root o consulting success. O course, learning how to do this is a painul and dicult process. You can only learn by doing – never n ever by reading. All the more reason I nd it surprising MBA students try to apply this hypothesis-led approach in cases. It takes consultants a ew months to learn it, and they have strong support with expert teachers. How can candidates •
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possibly learn this so quickly? It is very dicult to understand what a storyboard is when it is explained to you. I do not know about other people, but I personally have always struggled to generate a perect storyboard. I still struggle all these years later. I can do it, but I think it is one o my weaker areas. It takes me several iterations to get it just right. Te same goes with preparing perect slides. So many people do not know how to prepare slides and are comortable with this deciency. At Bain, you need need to know slide slide standards and learn how to deploy the standards well. Wee split the work up on this project. Given W the partners experience, he would work on the storyboard and slides or the ramework to analyse the company and I would handle the in-store experience analyses. Completing the in-store study posed a big problem. What was the central central question question I was was answering? answering? How How would I do this? Eventua Eventually lly,, ater many iterations I settled on showing the disconnect between what Nabisco was trying to achieve in store, as explained on their website, annual report and numerous analyst calls, and the actual customer experience. So o I went and designed my storyboard and decision tree. Once that was signed o (ater 5 iterations!), I designed the tests and started the data collection. Management consulting is a lot like the show CSI. ypically, people are trying to hide something rom you. No one comes out and says, “Hey Mr. Consultant, thanks th anks or coming over. At the moment I am the problem since I have weak sel-condence and need to be recognised. I thereore structure all decisions to come through me. I know this creates many bottlenecks, is causing delays and losing us money, but it makes me eel so good. So please x this problem and everything will work well.” Wee have to investigate and W and nd the truth because nothing is what it seems. It is a little messy to nd the inormation and document everything. Lots and lots o new consultants get hooked into the glamour image o consulting. Glamour is the outcome o
doing all the messy work. Te glamour side is not the journey we undergo on a daily basis. It is tough and sometimes painul to nd the data you seek. Nothing is given to you and there are no nice looking case study appendices with perectly ormatted data. We need to sit through an organization to nd the inormation and create the pretty slides which we hand to clients. Te burden o proo is on us. Never ever orget that. Wee need to prove that our recommendation W and ndings are correct. I we ail, the client does not trust our recommendation and we lose credibility. And then you get managed out. Te theme I choose was “A Day-in-the-lie o a Nabisco Brand.” Using a set o photos and time series analyses we tracked the biscuit boxes all the way rom the manuacturer’s distribution warehouse to the supermarkets and stores, then to their warehouses, onto the shel, through shel replenishment and nally to the consumer. Doing this was tough since many stores do not like shutterbug consultants snapping away near their loading docks and display units. Customers also do not like this. Especially since we had no ormal mandate to be there! Tis was also way beore the iPhone and digital cameras. I am sure it would be much easier to do this today. We solicited some consultants to send us photos o the biscuit boxes when they opened them at home. Was the box easy to open? Were the biscuits broken? Could the box be stored without damaging the remaining biscuits? What did children do with the toys inside? Wee timed deliveries rom W rom the warehouse to stores, timed the OOS (my Pepsi experience came in useul here) and were able to show the client how damaged the boxes really were, how peak shopping time trac was missed since the stock was not replenished on time and many other useul insights. Te pack we put together went ar. Further than I thought it would. Te client loved it and eventually awarded Bain the portolio analysis work. Te deck itsel became something o a
best-in-class internal study guideline on how to combine eld work with desk-top research to produce powerul and insightul presentations. My time in the unit was interesting and very benecial. I actually liked knowing where I would be the next day day,, unlike so many colleagues who were sometimes given a day’s notice or their travels. I also liked to have one oce which I could call my own; where I could develop a routine. Te oce had a great caeteria and the ood was excellent. While I sometimes travelled out to collect data, I could predict with a high degree o accuracy when I would nish my work. I now now had more more money and the time to develop a social lie. Late work nights were very rare since we had ample time to plan, and I could take work home. Te biggest benet was spending one complete year working and learning rom the rms most talented partners. Tat was invaluable. I had built excellent relationships with them. By the end o the year I knew each partner’s preerences and could tailor my communication and work to meet their expectations. It was especially gratiying when partners tried to get me onto their projects ater the Nabisco study. Spending all this time with the guardians o the rm also allowed me to see how they operated in ront o clients, nurtured the rm’s values, managed client expectations and developed multi-million dollar engagements rom the kernel o an idea. Te last part is literal. Studies usually begin with an unormed idea presented by a client, and the partner needs to nurture it and build it into something; a “something” usually billing about $200,000/we $200,000/week. ek. Once things settled or Bain worldwide, the need to keep the internal unit disappeared. However, given its success the global rm decided to set up a dedicated research team in that particular oce. I think that was a great eather in my cap and good or the rest o the team as well. I was willing to take any credit I could. Many aspiring consultants eel they have to get out to clients to move ahead. Tat’s partly true, but there are many, many benets to
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rst joining the internal research units. Tat worked very well or me and I would say gave me a major advantage over other consultants. I did one other similar study or or a retail bank beore I was hauled o onto my rst engagement; analysing an airline. I was the rst person out o the research unit. Tings seemed to be looking up or me.
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Power at Bain lay in the stang oce. Te all-powerul stang oce is responsible or looking at project needs, comparing these to the perormance evaluation and development needs o consultants, and stang them. I am sure that having a close relationship to a powerul partner helps a little, but the stang oce is overwhelmingl overwhelminglyy inuential. My airline project was slightly dierent. Again, I was lucky. lucky. Te oce was running low low on consultants, a partner with whom I had worked closely closely at the the unit was leading leading an excitexciting aviation engagement and the rm needed someone with a consumer products background on the project. Tat was going to be me. Te project manager and his team, however, elt my arrival was somewhat “orced” on them. Tey never said it openly, but I could eel they were not so excited to have me on the project and were more interested in working with some o the other consultants either on the beach (not billing) or in the research unit. Tis was a very important project or a premium client and I got the eeling that the project team elt others were in line ahead o me and should have had the opportunity. In all reviews o management consulting rms, everyone downplays the human element. Consultants like to ocus on tangible elements in writing online reviews, like working hours, benets, salaries and so on. Go to any reviews on Glassdoor or Vault and this is clearly where the ocus is. It makes sense since those are tan-
gible elements where there is less subjectivity. Yet, Y et, relationship dynamics are a major issue at management consulting rms. It is probably the main issue. Although, I only realized this latter when I briey let Bain this was my rst experience o how it would play out. I also somehow got the eeling that some consultants, although not all, were somehow unhappy with the success I had in the unit. Many consultants saw time in the unit as a orm o punishment or not being good enough to be in ront o the client. Tey were surprised I had turned it into a success. My hand in the Nabisco relationship building and subsequent engagement threw them or a loop. Especially, when our presence at Nabisco continued to grow and grow. Despite the clear tensions within the team, I decided to put my head down and ocus on the task. I realised the project partner knew me well so I was not ghting an uphill battle to build a reputation. I just needed to maintain my reputation. Te project was very interesting. A major airline had lurched rom one disaster to another. A new CEO had appointed Bain to review the company and develop a plan to turnaround the business. Te initial diagnostic generated a long list o issues to be addressed. Te marketing o the airline was one o them. Te team I was working on had started earlier than the other work teams and was developing a plan to x the marketing arm. We had 6 weeks to complete a strategy to x marketing. My role was to map out the key marketing processes at the client and then complete the business case or the marketing part o the project. It’ss been a very long It’ lo ng time so I cannot remember re member all the details. However, I do recall the rest o the team working on branding analyses, organisational design analyses and communications analyses. Te corporate communications unit was part o the marketing marketing unit at the client. Wee were based at the client’ W client’ss head oce which was a good 1-hour commute rom my home. Given the travelling we were likely to do, I chose to take my car along and ditch the sub way.. A ride in a convertible on a warm spring way day was denitely inspiring. Our team was assigned a bare white room with one large square
table. It was pretty basic, but useul or being in the same corridor as the marketing executives. Tere were heavily tinted windows which made every sunny day look like an overcast one. Coming in at 7am and leaving when the sun sets is very demoralizing especially when your mind is constantly tricked into thinking it is winter due to the tinted windows. Te caeteria at the client was less than inspiring. It looked like a high school caeteria plonked down in the middle o relatively ancy looking oces. It was as i the rest o the building was built to higher standards and when only the caeteria was let, the project budget ran out. Te ood was bland and overcooked. Vegetables and pasta should never be overcooked to lose their shape. Te irony was that a ood network played continuously on the caeteria televisions. Te ches should have watched a ew shows and maybe taken some notes. Right o the bat I was not enjoying the project. I had a good ew reasons or this: I elt the project manager treated most o the team like they were unimportant and did not need to be involved in important discussions. He started key discussions when only his most trusted trusted team members were in the room, room, made people people eel as i i they were not contributing to the engagement and divided the ow o inormation. He had picked a consultant as his designated number 2 and pretty much only discussed important items with him. We were all excluded excluded in discussing discussing eedback, providing direction and even conducting reviews. Later I learned that project managers play the greatest role in determining the energy levels on a project. A good manager raises the energy levels o the team, makes everyone eel important and involved, and keeps the team united. Tey are still tough on perormance, but they play the ball and not the man. Tis team manager kept the team divided and kept energy levels painully low. It was like he wanted to convey an aura o tragedy so that the client would think things things were really really bad, and •
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the consultants were needed. In creating a so-called “burning-bridge” “burning-bridge” he was burning his chances o building a strong team. Te manager had decided earlier that he would try to win the implementati implementation on work by painting an apocalyptic picture o the client’s uture. I suppose a natural mortician’s personality coincidentally came in useul in his case. I the data created this apocalyptic picture, that’s ne, but what i it did not? In this case, the data clearly was showing that marketing was not bad and not really ailing, yet it was amusing how he would nd any problems in the airline’s perormance as being driven by a major collapse in the marketing department. Every problem was the end o the world and needed to be addressed immediately or the “ate o the airline would be dire.” He brought this sombre mood to everything, which was, in my opinion, overblown. Later I learned he merely had the personality o a morgue technician – he was like this even on his happy days. Tat late kernel o insight came too late to help me on my rst engagement. I suppose it’s only air to say that I did not like him and I am sure he did not like me very much. Tis likely aected our relationship. Ater working with the partners, I realised the enormous eort Bain makes to develop and train people. Tere is a Bain way and the only possible way to learn this is via close coaching and direct eedback. Senior leaders o the rm are willing to take time out o their busy schedules to explain the Bain way. I am not sure i it was just me, but I ound this manager weak at training people. At the same time as the project, my social lie was gathering pace and I had developed a routine o leaving at around 8pm, meeting riends at 10pm and returning home around 1am or 2am. I would then sleep or 4 hours and be in the oce between 7am and 7:30am. I would not recommend this to anyone. While I managed this airly well or the rst week, it really started to take a toll by the second week. I was so tired by the next Wednesday that I just went home at 8pm and crashed in in ront o my big screen V. I usually ell asleep with a hal-
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eaten pizza and beer. Tis was easy to do when I was younger. Much later in lie, when I tried this as a partner, I ballooned and put on lots o weight. My tted suits were no longer tting as well. It’s amusing how eager young consultants arrive with Hermes ties, French cut suits, polished shoes and generally good physiques. Four years later they tend to look like a truck hit them, did a U-turn and then came back to nish the job. Haute couture road-kill. Developing my project plan, timelines and hypotheses away from the safe planning connes of the unit was a bit perplexing. I did not know what I was even meant to do. In the unit, the partners always helped us understand the questions we were trying to answer. Out with the client, pinpointing the questions was much tougher. The questions I was meant to answer were vague at best and I was getting no guidance from the project manager. I remember being very, very wor ried that I would come in, not have anything to do, because I did not know how to do it, and stress about how to look busy. Every time I asked for help my manager gave me some vague description and told me to pre pare a draft to check. A draft of what!? Eventually after many delays, frustration, beer, tears, name-calling and pizza, I man man-aged to get stuck into the process analyses. I thought I was doing a ne job and the manman ager seemed pleased until I was alone in the project room one day and the project partner arrived. A very sociable person (as well as former Olympian and Baker Scholar), we got to speaking about the project. Although I thought I was doing well, his simple but obvious questions, which I could not answer easily, sent me scrambling back to the drawdraw ing board. Although I cannot remember his exact questions, it went something like this: t his: • • • •
How many processes are there? How did you pick these processes? What hypotheses are are you testing? What do you hope hope to get out o mapping mapping the processes?
How does this link back to the overall project? Where is the storyboard? storyboard? Have you tested this with the client? In 7 minutes he completely dismantled my work. And my condence. condence. Tere were more issues. He also pointed out that some o the more creative things I thought I was doing did not make a lot o sense. Bain has a set way o doing things or a reason and I was expected to toe the line. Tis is one thing many people ail to understand. At Bain, you need to rst perectly understand the Bain way o doing things, prove you have mastered it and then you can be creative. Bain wants you to be creative yet only by using their heavily analytical MECE-driven process. o use a literature metaphor, you rst need to understand the rules o the English language, and then elegantly create prose while staying within the rules. You Y ou cannot change the rules, rules, just the prose. At my level, there was little room to be creative. I was still learning learning the rules. I you come in thinking you will teach Bain something new, you are sadly mistaken. Tere is a Bain way and you need to earn your right to be creative only ater mastering the Bain way. Tose who struggle to master these techniques, the “language” rules, are quickly managed out. Te rm does not tolerate renegades. Tereore Tereore when someone thinks they are creative, they need to be able to display this creativity while always deploying the Bain approach to engaging clients and solving problems. Since I was getting mixed signals rom the partner and project manager, I went to the project manager and asked or his opinion on my thoughts to reconcile the two approaches. His view was that he would manage the partner and I should simply ollow his instructions. So I continued. Over many painully slow and boring workshops, I mapped the key processes, looked or gaps and bottlenecks, worked to reduce ineciencies and improv improved ed the processes. I thought I did a pretty swell job. Te client was impressed and and so was the project project manager. manager. Te partner was not impressed. He elt noth•
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ing I did had addressed the key client issues around improving improving the perormance o the marketing department as measured by the ability to target the right events and manage a portolio o multiple campaigns. He also elt I had ignored his comments. Te project manager and partner had wildly divergent views about what needed to be done. Te business case was an equal disaster. Te only dierence rom the process mapping is that I knew the mapping would be a disaster rom the start and my prediction came true. Te project manager was trying to nd any business case to show the value o his work. Many o the benets were painully intangible and non-nancial. He was also trying to nd any allies he could within the marketing division at the client. Unortunately we were not doing too well. Te analyses were poorly planned and the project manager’s style was not winning any converts; with one exception. Te head o knowledge management within marketing loved the act that these expensive, Ivy League educated consultants, except me, were willing to listen to her and gave us her undivided attention. Te project manager conused interest with inuence and causality. Te knowledge manager was interested but not inuential. Nor did xing her problems x the marketing issues. Te impossible business case they wanted me to build was to improve the investment in knowledge management which could improve ideas in marketing and eventually improve the return ret urn on marketing marketin g spend. alk alk about ridiculous trickle down economic theory. Bain has a sacred rule that anyone can challenge a decision i it is not in the best interests o a client. Te rm will listen and, irrespective o the person’ pers on’ss seniority seniorit y, age or experience exper ience i the th e dissenter is correct, the rm will change its direction. Tis is called the right to dissent. Some call it the obligation to dissent when clients’ interests are compromised. Tereore I voiced my concerns and said this was a really weak business case which would be very hard to calculate and deend. For my views, I was taken o the project by the project manager and sent back to the oce.
I pretty much thought my career was over. I contemplated the thought o having to go back into the job market and start all over again. Fourteen months at Bain would not look so bad on my résumé. I hoped. A quick and unocial poll poll in the oce indicated that no one personally knew a single consultant who had been removed rom a project. Everyone had heard o some consultant who had been removed. However, the idea o being dispatched rom one’s rst project was like an urban legend. Like all urban legends, this one was interesting and played to their ears. Yet, there was no proo it had ever happened. Until now that is. I was not happy to be the one bursting their bubble. Perormance reviews at Bain are painul. Te rm spends more time writing pages and pages about improvement areas than writing pages about your good goo d work. You You need a tough stomst omach to swallow this and keep it down. A credit to Bain and a credit to their value system was the way they handled the perormance reviews. Despite the act I had only been there or a year, it was my rst project and I was a relatively unknown quantity, the review committee looked at the acts and decided that I had done all the right things and it was my project manager who had erred, just not on the side o caution. My career did not suer but he let 2 months later. Te rm never said why, but it was clear they did not eel he had the correct value system. It was humbling that a new hire could stand up to a well-educated and long-time manager, challenge him and win i the client’s interests were placed rst. Bain is proud o its value system and it should be. It lives by them. Not many companies in the world can make the same claim. My perormance eedback was not great. It was honest. I could deal with that and decided to stay at Bain.
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I elt lucky and relieved to have survived the scare o my last engagement. Te relie did not last very long. I had to very quickly show that I deserved to be at Bain. With the engagement manager having let, I elt there was greater attention on my perormance. Would I be able to rise to the occasion and prove that this was indeed just a personal issue or was there something really wrong with my perormance? I also elt a personal obligation to not disappoint the partners who had stood up or me. I did not have long to wait or the opportunity to prove mysel. Just one week ater my perormance review, review, I was assigned to another aviation project. As you will see over time, the aviation sector, and strategy in particular, became my area o specialization.. Bain had been appointed to develop cialization an I strategy or one o the largest air carriers in the continental USA. I was assigned to lead an important piece o work. Te rm wanted to test me and asked me to be the analyst leading the business case under the support o a consultant. It was going to be tough or me. I had no real nance or accounting background other than my week-long Bain MBA training. Although I was assigned assigned to work with a consultant, the partner made it clear that I would need to drive the business case. Te senior consultant would oversee my work and provide input as needed. She would not be responsible or delivery. I would need to own this piece o work. o be honest I was scared. scared. While I appreappreciated the opportunity to lead something this big, I was not sure I could do it, and rankly surprised the engagement manager would place such trust in me. My peers on the engagement did not help matters. Te team assigned to this project was a stellar team. All were high-yers within the ranks o Bain and were regularly cited or their outstanding team work, delivery excellence and exceptional client work. Bain awards outstanding consultants with vacations away to some exotic locale all expenses paid
and they are allowed to take their signicantothers. Each o the guys on the team had won at least one vacation over the last 3 years running. Te team consisted o 5 consultants including the partner leading the study. I really appreciated the way the engagement manager approached this study. Tat is the reason I decided to bite the bullet and plunge into this project. We sat down and had a long discussion about what he wanted rom the business case. He was very hands-o; which I ound surprising. He spoke about the principles o the Bain philosophy. I could see this guy led teams by bringing in smart people, inspiring them and allowing them to work. He mentioned he requested or me to be on the project because he heard I had spoken up or the client’s benet on my last project. He admired that and wanted a similar style on this study. I clearly remember the 6 principles he had or the engagement: ake charge and dazzle the client, project team and Bain. itles mean nothing. nothing. As ar as he is concerned, I am the point man on the business case. A policy o no surprises. surprises. He would provide air-cover as needed and I just needed to ask or help. Follow the Bain approach but be creative. Have un and work as a team. Having this conversation really helped me. Not only did he inspire me to give my best, but he kept his word. At no point on the project was I treated like a junior member o the team. I was treated like a really senior and established Bain consultant. I remember sitting in the planning meetings and the engagement manager would deect all nance questions to me. He made a point o ensuring that no one, not even the engagement partner, approach the Finance EVP unless I was involved and it was part o my plan or the study. Tis gave me a tremendous boost in condence. Now I just needed to deliver behind that. It’s hard to disappoint someone rooting or you so strongly. Te level o responsibility I was being given was rare. It was uncommon or a relatively •
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young analyst to be leading a business case or such an important client. Motivation is one thing, but what the hell do I do? Business cases can mean so many things. I spoke to the Bain business case experts and everyone had dierent ideas. In one project, a business case meant working out the return-on-equity and in another it meant nding the increase in protability. In another it meant calculating the reduction in labor. So or the rst week, I worked worke d with the engag engagement ement manager manager,, partner and rest o the team to see where they were taking the study. I decided that i each business case is unique, then the business case must serve the needs o the project. Tereore I could only plan the business case once the needs o the project were clea clearr. Tat Tat sounded sounded logi logical cal to to me. As I worked worked with the other team team members to develop their plans, I developed a ramework or my analyses. In hindsight, the ramework was so obvious and logical, but at the time, I was just pulling my my hair out. What little I had let. It helps to arrive at the ramework by yoursel, since you can then understand why it was developed in the ormat chosen. Te engagement manager would calmly listen to me and make polite suggestions and it was up to me to make the nal decision. With power comes great responsibility – or so they say. So my analyses approach was simple: Step 1 – Conduct a review o the I department’s nances. Basically I was recreating their income statement, which they did not have and creating an easier to understand capital investment overview. Something which they, again, did not have. Step 2 – Determine i their total expenditure was appropria appropriate. te. Step 3 – Determine i investments were made in the appropriate parts o the business. Step 4 – Determine what they could do to improve. Step 5 – Determine the business case (benets, cost to implement, time to implement and returns) or the recommended strategy. •
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I ran this by the engagement manager and partner and everyone was happy. Tey thought it was easy to ollow, exactly what was needed and just a question o nding the inormation and drawing the insights. I already knew that the engagement partner would be on on my case to to prepare prepare my storyboard. storyboard. So I spent the rst week doing the ollowing: Summarizing Summarizi ng the key questions and hypotheses I needed to answer. Building a decision tree to ensure I was not excluding anything important. Developing my analyses and data collection templates. Once this was done, I used them to guide my storyboard. I must say that developing my rst storyboard was a painul concept. It is such a oreign concept when done, by onesel, or the rst time. Although I had practiced this in the oce when I worked in the research team, I had taken or granted the important prompts and pointers provided by the partners. Tis really was useul to nudge me in the right direction. I would just have to work without them. I reworked my storyboard every single night and discussed it with the manager the next morning. Each morning he sent me back with the ollowing kinds o comments: “Do we need to tell clients we did this?” “What is this data telling us? Are you sure?” “What does it mean i they do not adhere to global best practice?” “What is the most important nding you expect? Why is it not in the story?” “Why is your story so long?” “Did you know Winston Churchill demanded his war cabinet provide eedback using one single-sided typed page with double spacing? Why is your storyboard stor yboard 80 pages? Is the news eighty times as catastrophic as World War II?” He was never ippant or arrogant. He just asked interesting questions in a nice way. He was really really riendly riendly about about it. He had this grin on this ace and would ask me to sit on his desk as he talked me through things. Nicest guy to whom I ever reported. Period . •
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He single-handedly rebuilt my condence. His style and questions orced me to think through my approach over and over. I used to spend hours talking to employees and helping the other consultants, all the while stressing that I had not started my data collection and analyses. Te engagement manager did not seem worried. He wanted me to rst develop my storyboard. By the end o week 2, I was still not sure what my nal storyboard would be; this ater 7 iterations. Unortunately or me, the next day the entire project team was having a meeting and we each needed to present present back our storyboard. storyboard. Wee were scheduled to have the meeting rom W 9am to 11am. My tactic was to stall and hope to buy time to gather my thoughts over the weekend and hopeully Monday Monday.. Te project partner rarely came in on Monday to Wednesday, so i I could survive Friday I would have about 5 days to spare. I did quite well on Friday. Stalling that is. When the partner came in Fri Friday day morning morning,, I strongly suggested he have some pastry rom the new Dean & Deluca boutique on the ground oor. Yes, this client did not skimp on ood. Tat killed about 25 minutes since I was extremely polite by allowing every woman to pay beore me. We spent another 10 minutes on pleasantries upstairs beore getting into the detail. It was an intellectually tough session. Te storyboards were dissected and analyzed. Te partner checks or logic in thinking, robustness o the analyses and so on. It was interesting to watch. He asked or specics at all times and probed behind every assertion made. I also kept asking as many questions as I could to stall. At 10:55am, the partner checked his watch and mentioned he was running out o time. Te rest o the team got up to leave since they had 11am meetings. Te partner motioned or me to stay and quickly brie him. He wanted me to give him the basic message rom my storyboard. Damn! I thought I had escaped. I basically sucked in a deep breath and told him what I thought the analyses would show. I just went with what I thought the data was telling me and its implications:
About 75% o o the I budget is locked locked into legacy contracts decided at corporate level and over which the I department as no control. Te legacy contracts are never reviewed and likely not meeting perormance criteria. Te planned budget cuts could only be taken on the capital projects side, where passenger and ticketing I upgrades would be made, made, since the legacy contracts contracts are all long term and could not be altered easily. Tis would directly impact sales and customer satisaction, which would hurt prots. Despite popular opinion, opinion, the client is not spending more than peers. However, its allocation o spend was very dierent rom its peers. It is spending s pending too little on core systems (ticketing) and wants to cut them even more. It is the only airline in its peer group having such a large percentage o its I budget tied to internal systems, and legacy contracts, versus customer supporting systems. Te I department could invest in the customer systems without requiring a signicant budget increase. Tey would need to tighten internal I costs and shit the savings to the customer acing systems. I waited or the expected criticism. It never came. Te partner said that was a “brilliant” storyline and he looked orward to seeing the analyses. Your Y our rst partner praise is is like your rst kiss. You Y ou never orget it. Clearly merging my intuition with the analyses was not hal bad an idea. Tat taught me a very important lesson. Sure, consulting rms have many phenomenal tools to construct decision trees, hypotheses and hundreds o guides to work out costing and rates o return. However, those tools only break down the problem. Tey do not put the pieces together to present the answer. Tat takes intuition, creativity, experience and guts. Tat was a undamental lesson in this project which I believe set me up or great success as a •
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management consultant. I realized all the tools exist to break down problems into neat parts or comparison. Te truly outstanding consultants understand this and develop a knack or looking at the pieces and trying to t them together to present a new picture. Tey interpret the data and ndings. Tey do not assume the analyses are the end o the process. Tat’s a very important lesson that I hope to convey in this book. Great associates and engagement managers can use ormidable analyses to break down problems. Tose who can reassemble them into cogent solutions become partners. It’s that simple. A good riend once said that a consultant is paid or their interpretation o an issue. Whenever you seek eedback rom a colleague, case management or partner always remember to rst present your interpretation. Tat is why you are hired. It annoys people when you cannot provide an inormed opinion, and simply want to collect their ideas and meld them into slides. Much later I realized that Henry Mintzberg and Kenichi Ohmae (McKinsey) both outlined this understanding as a critical skill or management consultants. Mintzberg said that not everyone can be a management consultant. Bringing the right combination o intuition, creativity, experience and guts to a problem is something that cannot be taught and not everyone has it. Tereore not everyone can be a management consultant. Ohmae arrived at the same conclusion in his book “Te Mind o a Strategist” but explained it dierently. He said that engineers are linear problem solvers and are excellent at breaking down problems. However, this skill at breaking down problems is a major disadvantage when combining the pieces to develop the solution. Linear thinking does not work in this context. In other words, all management consultants must have the skills o engineering thinking, but having these skills by itsel is not enough. Tose with artistic backgrounds on top o business skills tend to do better in shaping a solution. In hindsight I cannot think why anyone would ever solve problems by scurrying o to
analyze every piece o data. It is such a waste o time. Te approach o solving a problem with decision decision trees and hypotheses hypotheses is so powerul that it really boggles the mind. Once you make that shit to understanding and using the process, you become a powerul and ecient thinker. You Y ou should imagine your career consisting consisting o three parts: Part 1 – Learning to correctly break down problems and analyse them. Part 2 – Assembling the pieces to develop the solution and recommendation. Part 3 – Implementing the solutions. Analysts, interns, consultants, senior consultants, managers, case leaders, engagement managers (dierent terms or dierent rms) are all in part 1. It’s that simple. Tey are still learning to break down problems. An analyst is helping to break down a problem, an associate is actually breaking down a problem and an engagement manager is overseeing many people as they break down a problem. Part 2 is much tougher and ew consultants make the transition. Until consultants get to the associate principal, partner, senior partner, director or managing director level, they are not crating solutions. Tey are just preparing the pieces which the more skilled thinkers will use to crat the nal solution. Many consultants managed out o Bain, McKinsey and the Boston Consulting Group, never understand this point. Tey leave as associates or engagement managers and think they know how to develop solutions. Unortunately Unortunately they have not learnt the skills needed. Tey only have hal o the skill-set required. Do not get me wrong, wrong, the skills they have are still important, but they are not enough. Part 3 will be discussed much later. Te bottom line is that you cannot be an implementer in a management consulting rm. You need to transition to a corporate role, run a P&L with resources resources and ght the the daily battle battle to succeed in the market. An implementer is not just a consultant managing implementation. You need to be invested in the process and that means being an employee o the company. •
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Management consultants are thereore never true implementers. It would be nice to say that I worked brutal hours every day. Tat ts into the stereotype or management consultants. I did not. Using the storyboard to structure my analyses and data collection made the project ridiculously easy.. I should not say that, but it is true. easy I you ollow the Bain approach to break down problems and ollow the guidelines to develop the analyses, you cannot go wrong. Yes – you need to constantly think about what you are doing, communicate and incorporate inormation, but i you do this, you will succeed. Always learn the process or solving problems. Really understand it and use it. Ten sit with the data and and think about what what it is saying. Tink long and deep about it. Despite being the junior person on this team, I can saely say that the business case did dazzle the client. Most o the hypotheses were proven. Te client did manage to make huge investments in the customer acing side o the business, with only a 5% increase to the I budget. Te client retained us or much more work. I was also surprised when people at the oce started reerring to me as an aviation and business case specialist. Yet that is the power o the management consulting approach. It works. My star was rising.
rapidly turning around a struggling eastern european airline
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Fiteen months ater joining Bain I was promoted to senior associate consultant. Most people take about 24 months to make the jump rom associate to senior associate consultant, so I was doing well. I was by no means breaking the speed barrier with regards to my promotion but I was denitely on the radar as a consultant to watch. At this time I was really looking orward to doing something a little dierent. I
had been on two aviation projects. Te rst was a disaster but the second was a huge success. I desperately wanted to be in another sector and closer to home. A couple o reasons were driving my hopes or an assignment at home. For one, baseball season was in ull swing and this time I wanted to be there or as many home games as possible. I was tired tired o missing missing the games and catching the updates at the airport. Remember this was the era beore the Smartphone. Second, my personal lie was taking o. I met someone who worked very close to my oce, oce, within walking walking distance, but my excessive travelling was damaging that convenience. So hopeully I could secure something where I could spend more time at home. I was always excited about the work the media media and banking teams were doing. Tere was lots happening in the technology space and while the San Francisco region commanded most o the technology work, my oce and region had a lot going or it. I spoke to my mentor and the various partners. Given my recent project success, I had a good and growing reputation which I was hoping to leverage. Tere was certainly interest to use me on some o the technology work. Ah, but ate had a dierent dierent plan plan or me. Bain Bain had been invited to do another aviation project; this time in Europe. Unortunately my name came up and I was o. With that went my love lie and baseball. However, I did learn about the European love or ootball (we call it soccer). Te project was denitely one o the most exciting I have ever been staed upon. An Eastern European country was trying to pay down its debts and raise much needed oreign currency. A new president and team o advisors had hit on the idea o selling-o large chunks o the state-run economy. Te thinking was that the sale would bring in immediate hard-currency, x the balance o payments issue, inject western ideas and management into the economy, raise productivity and hopeully this would all lead to an increase in the standard o living. Everything rom the state run airline sector, banks, chemicals companies, ood companies, textiles, auto compa-
nies and so on were all slated to go. However, there was hesitancy that a rushed process could lead to a Russian-style re-sale where all the prime assets were picked up on the cheap with no real short-term or long-term benets to the country. Tereore, it was decided that the airline company would be the pilot (no pun intended). It would rst be gussied-up or sale and then taken into an Initial-Public-Oering Initial-Public-Oering (IPO) led by a prominent US investment bank. Tis project was again a great opportunity or me. Te engagement was overseen by the same partner with whom I had worked with previously so he was aware o my skills and capability. Tat helped immensely since I was being given important roles which were well above my level. Tey were clear stretch-roles which allowed me to grow signicantly during my ormative years. I really relished this opportunity. It was exciting. I was working with a consultant to look at hundreds o dierent businesses within the state-run airline and determine i they should be retained. Tis was in the days beore Chris Zook wrote his hugely successul book “Prot rom the Core” but his ideas and thinking were already being tested and developed with clients. So our role was simple. Determine i the 70 or so businesses which belonged to the airline should be kept, and i not, make the case to divest them. Like all state-run businesses without a clear prot mandate, this company had really poor nancial controls, reporting processes, asset registers etc. It was really painul to construct all these items. Moreover, strategy did not seem to dictate the client’s decisions. Te main-oce or the airline was in a suburb on the outskirts o the capital city. In the late 1980s the national government had decided to build a prestigious, and expensive, new technical university very close to the head oce. So what did they do? Tey asked the airline i they would “oversee” the university. “Oversee’ could have meant many things, but it eventually led to the airline unding the university, managing the university and even keeping the university on its own books. And this was normal since prots were
never the target. It was all or the greater good. Te government was also very paranoid about security and wanted the airline to backward and orward integrate to lock-in both raw materials and routes. So the airline owned, unded and managed the ollowing: Pilot training schools 4 dierent aircrat manuacturing companies 2 engine manuacturers 2 engineering training academies Several maintenance acilities Several aviation liquid uel depots, reneries and distribution companies 2 Oilelds Several basic catering companies Road maintenance companies Airports Facilities management companies Airport management management companies 6 ravel ravel agencies A leasing company company Tese are just the big-ticket items and the ones I can name without giving away the client’s identity. Tere was one particularly large investment totally outside their main business which I cannot mention, since it would easily identiy the client. I you add in the smaller investments and their actual airline-critica airline-criticall investments, this asset list easily grows ourold. My team worked really closely with the strategy group. Tey were working out what should be the new business and its retained assets, and our job was to then build the business case or dispensing the non-core assets and determine the value created rom disposing the non-core assets. Building the valuations was incredibly hard. Te basics o a valuation call or orecasting the uture cash-ows, adding in a terminal value and discounting back to get the possible sales price. However, so many assumptions and variables drove the value o these businesses: Te country was going through so much nancial and political risks that the risk premium, and discount rate was constantly changing. Tis dramatically aected the valuation. • •
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Many o these non-core businesses were only valuable i they had the airline as a client. I they were cut loose, their value would plummet. plummet. So we needed needed to eed this this back to the strategy team since it was their call to determine i the airline should continue using them. Choosing the incorrect or inecient suppliers would dramatically aect the airline’s cost structure, but make the divested business unsustainable. It was a trade-o. Other Eastern European countries were about to embark on similar exercises. Tereore these assets needed to hit the market very quickly or the explosion o supply in similar assets would dampen prices and lower the asking price. Collecting all the necessary data to analyze this was tough. Luckily we were already working with the investment bankers who were helping us with the analyses. So we had to work with the strategy and operations teams as they crated their solutions, and the bankers to ensure the numbers lined up, and also serve as a check on the banker’s work – an unmentioned use o our time. Tings changed wildly over this 4 month engagement. As new and critical data was discovered, entire recommendations changed. Up until this stage I was still very excited about working in an exotic exotic location. location. Tat enthusiasm enthusiasm was heavily dampened dampened on this trip. trip. While I really enjoyed the engagement, working with new people and the country, it also orced me to rethink some things I took or granted: My reedom was heavily crimped. At the time, kidnappings were a popular pastime and we were conned to our oces and hotel most o the time. We could only go out in groups which aected this nightowl or the entire 4 months. Being in a oreign country on vacation versus work is such a bizarre experience. On several gorgeous days we would see people strolling through the streets, sitting at caes or going to the lake. We would be in the oce and watching all o this behind tinted bullet-proo glass. Tat was depressing. •
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Not speaking the local language is a huge problem. Every interaction requires a translator and there is a lot that is lost in translation. Your Y our social lie and and interaction interaction takes a huge hit. My early days at Bain were also in the early days o the internet. Mobile phones were still taking o. Skype was a dream. Mark Zuckerberg had no acne yet. AltaVista still still ruled the search universe. universe. A poor, despotic ruler at that. Eastern Europe was struggling at this time. While we saw people people having un we also saw many signs o poverty. Now it is much better, but then it was tough to watch. I did eel cut out o many typical Bain events and cultural happenings. Bain did not have an oce in this country and we were just starting o. o. I elt isolated. isolated. I really hatedbeing away rom an oce or so long. I elt I was driting into some weird world world where I was cast cast out with no link back to the real world. I realized how much I missed being part o something bigger. o Bain and the client, the project was classied as a success. Over the years that ollowed as the client implemented the recommendations, they did do well. Tey won awards or their service and they have a healthy balance sheet. Many o the businesses linked to them were never going to be viable and simply olded. Tat could not have helped the exploding unemployment situation. Te unions were certainly quick to make the link. Tis project showed me the importance o operations and implementation. Like everyone else I was obsessed with being a “strategy consultant”. Over time as I saw the challenges o running a business and implementing ideas, I realized that I needed to understand how to take ideas and make them work. I resolved to get onto a juicy operations project, out o the aviation sector, as soon as possible. •
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challenging was the way the separation would take place. It was a ormula which would, haphazardly, orm the blueprint or many low-cost carriers around the world. Te parent company wanted the low-cost Hallelujah! I managed to get mysel onto an carrier to be branded dierently and apoperations engagement, but as you probably pear to be independent to the public. guessed, I was still stuck in the airline sector. However, critical behind-the-scenes opera At this this point I had resigned mysel to accepting tions and unctions would be merged to that this sector was so important and growing drive economies o scale. so ast that Bain would recognize my eorts. Other critical operations which needed to I would not be punished or not having more be separated like check-in, baggage handiverse experience. My end o project perordling and so on would need to be manmance review or the Eastern Europea European n airline aged separately. project had went well. I needed to continue Te airline would be moving all 4,000 o maintaining that momentum. Yet, at the time its current employees who worked on the that was proving to be dicult largely due to low-cost side o the business into the new my own poor planning. budget airline. Some o my Bain colleagues had a rule o takOver the next ew years we saw many airlines ing about 5 days o vacation time ater every adopt the same model in creating low-cost al2 month or 3 month project. It helped them ternatives to ght against pure low-cost comrelax ater the project stresses. I had been at the petitors. A couple o things made this a airly rm or 18 months and I was still not taking interesting project: any time away. Between projects I was workTis was all happening at a time when ing on knowledge-capture work and internal the airline and unions were locked in viassignments or partners. Te atigue was startcious salary and benets negotiations. Te ing to creep up on me and I was getting tired unions were wary the creation o a new more oten. Heck, I thought I was too young low cost airline was a tactic to separate the to worry about this. So ar my career was going poor perormers into a poorly perorming well despite a wobbly rst project. I needed to unit which would be allowed to collapse push through and build my career while I had into bankruptcy. You must remember this the momentum to do so. was beore the low-cost low-cost airlines airlines started Wee were going to Asia to help a leading air W dominating air travel and their economics carrier split out part o their eet to create a were not ully proven. proven. Southwest Southwest was seen seen new low-cost carrier to compete in this lucramore as an anomaly than a workable busitive segment catering to budget-conscious travness model which could be understood ellers. Low cost airlines were starting to post and replicated. consistently large prots and eating into the Te airline had already communicated a incumbent’s territory. Te larger, established go-live date which was about 9 months carriers needed to respond and they believed away. Since this date was already out in creating a separate low-cost carrier could do the press, there was no way they could the trick. Bain had been awarded the strategy change the date without looking totally assignment which recommended the separaunprepared. tion. Now, in an additional assignment, Bain At this same time time the parent company company was also going to be tasked with preparing the was going through some o its own major major blue-print or separating the operations and shits. It had decided to expand into helping the airline with the rst stages o the several adjacent markets and industries implementation. What made this project so like catering and engineering. Te airline
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was also preparing preparing or a major major switch to an Airbus eet. All o these changes were sucking up resources and talent. Tere was a concern the low-cost eet would be let with the scraps. Te low-cost airline was deliberately being pitched as the anti-establishm anti-establishment ent airline. It was meant to be the cool place to work and the cool airline to y. Tis created animosity between employees o the parent and low-cost airline, although they were both technically employed by the same company. I had a very interesting role. I had to work with a team who had to create the new organizational structure or the low-cost airline. It was an exciting role. It was a totally new type o work or me and I was not even sure where to begin. Unlike a business-case type o assignment where the next steps were relatively clear, I could not even begin to think this one through. I spent a lot o time talking to Bain organizational design experts to build an approach we could use. It was like being back in university. I needed to go right back to the beginning and learn a new eld. wo o the concepts that were drummed into my head by the senior partner specializing in organizational design were that: Structure ollows strategy. Tink o the structure as the element which mops up deciencies deciencies in the strategy strategy,, and vice-versa. Tis turned out to be useul advice. Using these as the pillars or my thinking, I decided we would would spend the rst 2 weeks weeks with with the strategy team really understanding and splitting apart the strategy. We needed to perectly understand what the strategy wanted to achieve and the best way or the organizational design to help achieve this. We also needed to eed the strategy team limitations in the organizational structure which would impact the strategy. We also had to nd any possible aws in the strategy and how the organizational design could mitigate this. By the time we had come in, the strategy team was winding up their work. work. Like all companies •
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going through change, rumours o the recommendations were already sweeping through the corridors. We arrived just at that point in time when the operations team needed to start executing the strategy. What you learn in operations and especially in implementation work is that things operate according to a totally dierent set o laws or a corporation. For example, during an implementat implementation ion project, when the CEO miscommunicates or poorly communicates changes, the consulting team eels the brunt o the resistance. For example i the CEO is not clear about the pace o change needed, or is unwilling to create urgency, then the operations employees that the consulting team engages on a daily basis, is sometimes un willing to work with us. Tat Tat is very common. Implementation is not about analyses. Sure, you need the correct analyses and it must lead to the correct recommendation. However, the correct analyses will not go very ar. I cannot tell you how many hours were spent listening to the concerns and questions o the employees. Tey saw the analyses, but they did not know what it meant or how it would work in the real world. Tis was usually the case; they just wanted their concerns concerns to be heard. heard. Tereore, most o our time was spent listening to employees and placating their ears. It was a ar cry rom my previous strategy work when I would spend most o o my time analysing data and developing recommendations. In this project I was spending the majority o my time in meetings and discussions. My objective was to get the employees to start moving orward and building momentum. At the start o the post, I celebrated because I thought I was on an operations project. Tis was not operations project. Tis was a mix o operations (analysing the operations to present a recommendat recommendation ion – organisational design) and a lot o implementation (helping the client achieve the benets) work. In hind-sight I think that many rms conuse the two. An operations assignment is not implementation work and vice-versa. Tey are very dierent. I ound this project to be hugely draining, time and energy-wise. While we were develop-
ing the organisational structure, the rest o the organisation was moving head rst into meeting the go-live date target. Tereore we had to provide advice beore we had completely veried our ndings. Tis was rustrating and dicult. We needed to ensure that we gave guidance which would allow us to change direction later, i needed. On paper the project was designed to be led by the strategy team who would hand over to the organizational design team who would work with the systems and processes team, team, and human resources group. Te systems and processes could only be designed once the strategy team decided how the two companies would interact and organisational design sketched out the points o interaction. Human resources should not be doing anything until a skills audit was complete and we were sure who would move across, how this would aect their salaries and benets, and when they would move across. All o this needed to be timed to work in concert. Although Bain was appointed to lead this process, we ound that all parts o the organization were scrambling to get things done simultaneously: Te HR director would remain in the parent company. Knowing this, and wanting to keep the best employees, he had assigned his team to nd the top perormers and “lock them” into the parent company. Te engineering crew realised they were losing about 50% o their Airbus technicians. o ensure they did not waste any training budget on the wrong 50%, they took matters into their own hands and split the crew beore the skills audit was done. We ound hal the engineers sitting in limbo not sure what to do. Te team leading the SAP implementation were bounced o the executive committees update meeting agenda as more pressing matters crept up. Feeling as i they were losing importance, they doubled their work rate. Tis would have been ne, except or the act that they went ahead and and redesigned key processes and automated them without checking i •
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they tted in with the new organizational structure. Poaching Poa ching o talent was taking place in all parts o the organisation. Knowing Knowing that a sta split was on the horizon, managers were trying to retain their best people rather than let the business needs dictate stang. Te good thing about this project is that we were working right next to the strategy guys and needed to have oversight over everything else. We could clearly see the chaos that was erupting. We wasted no time in communicating this to the senior Bain partner along with a string o recommendations which were implemented. Wee needed to rapidly W rapidly escalate the sharing o inormation and connection points (and requency) between the consulting teams and the client. Limited inormation in the company meant that employees were imagining imagining scenarios and responding to these imagined events. Teir imaginations always created worse scenarios than reality. Fridays were now set aside whereby the team leaders or each part o the transition would get together and debate progress and reach decisions. Te CEO needed to take a tougher stand and stop the caustic behaviour. Ater a ew months o hand-wringing he eventually did. He replaced the HR director and replaced the Operations Director. Te tone dramatically changed with these actions. He also asked the new HR director to ensure metrics measuring the ease o the transition was built into perormance evaluations company-wide company-wide.. Te company embarked on a massive communications exercise so everyone knew exactly what was happening and when. Te part which came back to almost derail the project was the tax implicatio implications ns o transerring assets, pension unds and other liabilities. We spent a ew long and tense meetings to nail this down. I realised that while strategy projects have •
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this image o superiority, implementation projects are a little like driving a car at highspeed around a circuit on which you have never trained. Rather than instructions being radiorelayed through your helmet, you just have to watch or clues rom the pedestrians. It is tough and there is a lot o room or mistakes and spectacular crashes. Our days were long and tiring at rst. o get the organisation to start moving we needed to run a project which generated lots o momentum. You cannot generate momentum by sitting in your oce running analyses, emailing requests or via phone calls. Our evenings were spent running the numbers and our days were spent meeting key operations people to provide updates and help them move along. We sometimes had to meet key people three times beore they did anything. Tereore the rst ew months were packed with these meetings and setting up the processes or the project to move ahead as we scaled down our involvement. I can saely say that only ater three months did the momentum really pick up rom the client’s side. We still aced some big obstacles but the organisation was moving in the right direction. Tis project was important or one reason. It nally showed me how important operations and implementation consulting were. Like most consultants I had been enamoured with strategy consulting. While strategy was certainly exciting and I enjoyed the ew projects I had done, I was starting to see that operators kept the cash register ringing. You could have the grandest vision o bringing together two great companies, however, to make that work; you needed to actually make the deal work. Strategy was just as important as operations and implementation, and vice-versa. I started talking to some o the London partners about interesting operations projects they were about to start.
common sense Benchmarking is a powerul tool used by Bain. An eective set o benchmarks can quickly tell us how ar away a company is rom reaching parity with its competitors. It provides a rough magnitude o the scope o change possible and is critical to developing a top-down business-case. Te problem with benchmarks is that unless you apply common sense you can arrive at some airly ridiculous conclusions. I have seen this all too oten in my career. Te low-cost carrier project, described in the previous chapter, provides some especially illuminating examples. On this this project the client had invited a specialist aviation benchmarking rm to benchmark a ew processes within the operations and provide a blueprint or improvement on some o the core processes. Bain would use these as input into their analyses. Very Very quickly into the process, and much to our dismay given the tight timelines, we realised the benchmarks were o little value. Te low cost airline had a major hub in South-East Asia and regional hubs in 12 other cities across Asia, Australia and one in the USA. I you have own a low cost airline you know they cut out every single rill; onboard snacks, extra luggage, seat assignment, seating space and so on. Basically the customer is paying a really low price in return or no extras. Other things low cost airlines cut out are delays. Low-cost operators are brutal at cutting out any possible delays. Te planes leave and arrive on time. Te specialist aviation benchmarking rm was adamant that the client could reduce the turnaround time or all aircrat rom 12 minutes to 5 minutes. Te turnaround time is the time rom when a plane lands to the time when it is ready to leave. It includes ofoading baggage, cleaning the plane and, i needed, reloading baggage. Te Asian hubs had an average turnaround time o 8 minutes while the US and Australian hub were pushing 12 minutes and in some cases 14 minutes. Te business case or more than halving turnaround time
was compelling. It It could mean eectively eectively adding 20% more ights to the day. It was a signiicant business case and one we were salivating to push through. Te one thing about Bain is that we are very practical. Just because we produce top-notch analyses does not mean we do not have a eel or how things work in the eld. Tat has al ways distinguished us rom BCG and McKinsey. In In act, that gut eel or operational operat ional impacts is exactly why we are so good. We have a rule o providing advice which can be implemented on Monday morning at 8am. I advice cannot be implemented this way, then what is the point o the client paying or it? Tereore it’s not surprising that the Bain senior partner said that since so much o the revenue improvement came rom this idea, and we did not do the analyses, we needed to test it. We were all given stop-watches and told to nd the best crew in each hub and conduct a DILO (dayin-the-lie-o)) study to see i this was even posin-the-lie-o sible. So we did it and the ndings surprised us quite a bit and taught me the importance o applying common-sense: Te Asian hubs hired younger, slimmer and nimbler women. Tey were quick and able to dart between the seats and clean up everything in no time. Even so they barely managed a 6 minute turnaround. US and Australian hubs hired older and not as slim women to work the turnaround teams. Tey just could not move as ast. Tey were also suering to maintain the momentum throughout the day. It was the equivalent o repeatedly running a 100m sprint with too short intervals to rest. When we brought this this to the attention attention o the external specialists, they mentioned that the solution was to hire younger and more nimble women. Tat’ Tat’ss pretty bad advice since it did not take into consideration the extra costs o hiring them. Younger women with more options just would not do such work or the same salary in the USA. Tis does not even begin to address the problem o issuing employment employment adverts in the US which categorically discrimi•
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nated against male hires, older women or larger women. Since the client was unable to lower costs by achieving economies o scale in the smaller hubs, the external specialist decided to import the idea o cross-utilization. In this concept, an employee is trained to do more than one task. Tis eliminates the need to hire more people, increases utilization via an employee’s employee’s usage across multiple tasks and, the ultimate prize, lowered costs. Japanese auto manuacturers made this concept amous when they used it to x deects and improve quality on their production lines – culminating in the amous anban lines. Ater exposing aws in the turnaround time recommendations, the senior partner wanted to test this important cost reduction opportunity as well. Armed with a ew more stop watches and clipboard clipboards, s, we again marched o to do our DILO studies. Although this was not anywhere within my work scope, I still decided to assist since it was very interesting to do. Te act that the client ew us rst-class to each hub may have impacted my involvement just a little. Tis is what we ound. In the smaller hubs, there was only one person manning the checkin counter. Tis employee would manage all check-ins and close the counter. Tereater Tereater she would go to the runway and guide the aircrat as it docked in. She would then unpack the luggage, pack in the new luggage and go back upstairs to manage check-in or the next ight. She did this anywhere rom 5 to 10 times depending on the hub and day, and needed to complete each cycle in 45 minutes. Tis was tough work! Te distance between the check-in counter, which is upstairs, and the docking point or the aircrat, which is downstairs, is about 1300m on average. Every hub, except the US hub, will have average summer temperature temperaturess o 39 degrees and average winter temperature temperaturess o 24 degrees. Imagine running around, hauling heavy bags and keeping up the company’s image in this heat. Tis was not an easy task. Again the specialist external provider provider had no solution.
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Employees were already working too much. Further cross-utilization could literally kill them. So we ipped the idea around. Rather than increasing the number o sta, what i we reduced the amount o work done by the sta? Here is why we came up with this idea. Te major concern or us was the dierence between above-ground and ground-level activities. Tey were very dierent and doing one well (managing heavy baggage) automatically meant employees suered when it came to engaging with customers. Who wants to work with sweaty and smelly employees? employees? EvenEventually we recommended this client orm alliances with other low-cost carriers. Tis was at the time an unusual move but is now common. Tereore the client would manage the aboveground activity or an alliance member and that member would manage the ground level work. In dierent hubs there were variations, but in this model there was a sharing o the burden. Tis allowed the employees to ocus on one activity and do it well. It also allowed the airlines to do everything as planned, and increase volume, without adding more sta. On a side note, this idea o outsourcing selected unctions worked so well that the client was able to reduce a sizable chunk o its workorce without impacting perormance at all. In act, delays decreased and customer satisaction improved. Tis goes to show the importance o critically evaluating constraints in a business problem. Te external benchmarking rm also provided one piece o analysis which would have a proound eect on the client i it were implemented. Te analysis showed that the client was unlikely to receive berths at the major airports i it went ahead and bought the largest Airbuses available available.. Te rm was recommending that the client buy smaller planes since they stood a greater chance o getting berths at the older terminals at the major hubs. Doing this would have a proound impact on the client’s economics. Larger planes have much greater uel economy. Giving this up would dramatically impact the client’s nancial strategy. Not to mention wreak havoc
with all the planning already done with the expectation o larger planes. Crew numbers, destinations, promotions etc. were all built around the expected uel savings and larger volumes generated rom larger planes. Tere were also als o no guarantees that the t he client clie nt would woul d be granted the berths in the older terminals. Te higher taxes and landing ees in the larger airport would lead to higher nal ticket prices as well. In other words, why would anyone choose a low-cost airline which was not very low-cost, ew smaller planes, charged more or uel and orced them to check-in at cramped major airports? Bain’s solution was not all that original, but it did save the client. We recommended that the client stick to the larger planes, plough the savings into lower ticket prices and y in and out via smaller airports. We reasoned that customers really wanted the lower ares and would not mind the inconvenience o using a smaller airport. Te upsides were lower taxes, less delays and less congestion. Ryanair Ryanair had done this successully in Europe so it was conceivable the same model would work here. It did. Tis experience crystallized some important lessons worth remembering when applying benchmarks: Does the benchmark work given the practical issues acing the company? Some benchmarks look wonderul on paper but can never be applied without paralyzing operations. Has anyone actually seen this solution work? You You would be surprised surprised to learn how many ancy ideas described on slides have never actually been witnessed by anyone, because they exist only in the imagination o the person creating the slide. Usually, because the slide author never bothered to actually visit an operation. Does achieving the benchmarks lead to nancial and quantiable savings while simultaneously leading to non-nancial and non-quantiable loses? Like a drop in morale. Are there constraints constraints which need to be examined in greater detail? •
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Have the regional dierences been identied in the global benchmarks? For this solution to work, do the employees have to be robots? Tis is a unny comment the partner made. So many recommendations assumed perection rom employees. Tat can never be an assumption since it is clearly awed. Have you asked the employees, who will be aected by the change, or their advice? Line employees can usually give you immediate problems with the suggestions, s uggestions, and oer some nice solutions as well. Do you know how your employees will eel ater you have implemented this ‘solution’? Tat’ss one o the reasons Tat’ reason s why I always eel ee l good inside when I complete a project. Bain is so dierent in the way they operate. Solutions Solutions must be analytically sound. However, that’s not enough. Tey need to work in practical terms. Someone rom Bain is always thinking about how much value there is in implementing the idea. •
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