News

The Change Makers
Author: Amy Milshtein, Oregon Business
Posted: February 14, 2020

“Hurray, the consultants are here!” 
says no employee ever.

And who can blame them? The arrival of a consulting team is nerve-wracking for the rank-and-file employee because it means something is going on. Maybe that something is good. Maybe that something is disruptive. Or maybe that something means it is time to freshen up the resume because people are going to lose their jobs.

No matter what, that something is going to be uncomfortable at least for a little while.

And then there’s the consultant “type” to contend with. Picture a whiz kid with a freshly minted MBA from a top-tier school. They’re super smart, aggressive and paid big money to fly in, shake things up and fly out, but not before selling their next engagement.


One source for this article, who asked not to be named (no surprise there — consultants are famously tight-lipped about their work and client lists), put it succinctly: “Describe a consultant?” he asks. “That’s easy. We’re all arrogant a**holes!”

That might be an overstatement, but it is not untrue, either. Nearly every source for this article admits to knowing of, working for or working with that kind of consultant. They usually attach the stereotype to the big national firms — think McKinsey, Deloitte or Bain — before pivoting to how their local shop filled with local consultants is different.

To wit: “One of our clients described us as ‘a local BCG or McKinsey, but you’re cheaper and you’re not a**holes,’” says Damian Smith, founder and managing partner of Pepper Foster.

They’re not lying. Local consultancies follow different business models, build a different culture and have different expectations for their staff. Make no mistake, local consultants are all smart and competitive.

They have to be to thrive in consultant-heavy Portland, where there’s only so much work to go around. They’ll even go so far as to admit that there is a certain type attracted to the job, without using the A-word.


 

That’s welcome news considering the pace of business today. Consultants have long been selling better ways to work Portland’s big corporations — Intel, Nike and the rest. But now technology is disrupting the nature of business like never before.

All companies, no matter the size, no matter the sector, have to adapt.

So here’s a look at a few local consultancies, from a three-person shop to the bigger heavy hitters. Owners and directors talk about their challenges, successes, how to keep employees happy and why it’s good to run into clients in the grocery store on a Saturday morning.

And to further prove they’re not a**holes, they’re even shedding light on some broad business trends free of charge, such as the disruption of jobs that were once considered undisruptable and the eventual disappearance of all work.


Sicely Donaldson, market director, Point B (Photo Credit: Jason E. Kaplan)

1. Why does a company need a consultant?

“Companies call us when they have a pain point that requires expertise or a business problem that needs an objective lens because it’s complex or political,” says Sicely Donaldson, market director for Point B’s Portland office.

She explains that in most cases, Point B is called to bring cross-disciplinary points of view and expertise. “Something that would be really difficult for a company within a single sector to be able to do on their own,” she says.

It is a vital service considering the big structural shifts all business is facing. Take Agile, a type of project management, as an example. While it started as a way to deliver software products faster, Agile’s values of collaboration, flexibility, continuous improvement and constant evaluation are spreading to all project management.

This completely different mindset can be an uncomfortable change for employees at all levels.

Co-founder of 71 & Change Kim Bailey explains that the consultant’s task is not only to implement that change but to help guide staff through. “Any change brings a disruption curve that every employee has to go through,” he says.

“Our job is to minimize the depth of that curve and time spent in it. This makes people more productive, happier, and ultimately achieves the desired outcome a lot faster.”


 

Consultants also build software, help with migrating to the cloud or integrate workforces after a merger/acquisition. Some consultants specialize in one area.

Elizabeth and Rick Peters, owners of The Peters Company, do one thing: help companies understand and implement the Toyota Production System known as Lean. Born out of the manufacturing sector instead of software design, Lean is similar to Agile in that it strives to eliminate waste while increasing customers’ satisfaction, product quality and employee involvement.

Their three-person shop works with clients that range from five employees to 1,000. They don’t view themselves as competitors to the larger consultancies in town, yet they share similar values and outlooks. And they are plenty busy, as more companies engage their services in an effort to stay ahead of the competition.

“Sometimes we get called in because there’s a broken process,” says Rick, “but there’s also broken people, because it’s the people who make the process happen.” Elizabeth notes the importance of getting everyone’s buy-in. “With the Toyota Production System, all employees have an equal voice. That can be a culture shift, and we spend a lot of time getting people on board.”

And sometimes consultants are called to “build capacity.” This is business speak for adding a temporary workforce without having to put anyone on the payroll. These consultants execute specific projects or build technologies and then move on to the next job.


Damian Smith, founder and managing partner, Pepper Foster (Photo Credit: Jason E. Kaplan)

2. What’s the difference between a local and national consultancy?

Kevin Duggan, client service partner at Slalom, worked for a big, national consultancy for 10 years. He loved the pace, variety and challenge of the work, but the schedule — fly in on Sunday, fly out on Thursday — was “terrible, particularly after I started a family.”

Travel is a big part of working for a national firm. So are 60- to 80-hour workweeks, aggressively selling their next engagement and a competitive up-or-out culture that demands consultants earn a promotion every few years or hit the bricks.

The combination helps explain the typical consultant stereotype as someone who “works to you,” according to Smith. “They fly in with an MBA from a top-tier school, have a big brand associated with them, and do the equivalent of patting you on the head because you’re a provincial Portlander and they’re brilliant.”

Amalia Goodwin, managing director of Slalom, has seen the aftermath of working with that kind of consultant from that kind of firm. She recounts walking into a room of skeptical employees. “Someone flew in, left a binder of PowerPoint slides and flew out,” she says. “I’m here. I have to see my clients in the grocery store on Saturday morning.”

The narrative is similar from Point B’s Donaldson. “We work hard to become ingrained and networked in the community,” she says. “We know the companies in our own backyard.”


Elizabeth Peters and Rick Peters, co-owners of The Peters Company (Photo Credit: Jason E. Kaplan)

 

3. What’s the consultant type?

National or local, there’s definitely a personality type that thrives in consultancy, one that can often be identified while still in school. “The students who are interested and qualified for consulting have a great ‘zoom in, zoom out’ capability,” says Dave Garten, professor for Portland State’s MBA program. “They can see the strategic issues and deliver a super situation analysis.”

They also crave change, love complexity, embrace ambiguity and are comfortable with discomfort.

Or as Pepper Foster’s Smith puts it: “I bring people in who can ‘figure sh*t out and get sh*t done.’” (He’s so tied to the mantra that he mounted decorative letters — FSO & GSD — on the office wall.)

This ability, according to Smith, requires preternatural foresight, a rare gift that allows people to read inputs, identify risks and predict outcomes sometimes five years into the future.

There’s also an empathy factor in play, an emotional intelligence that allows consultants to read a room, ask the right questions and shift communication styles on the fly. Amy Weeden, CEO of Propeller, recalls one example when working on a hospital process change with a room full of unhappy nurses.

“I walked in and 90% of them had their hands crossed over their chests. It took a lot of humility to get them where they needed to be.”

Or, as Elizabeth Peters puts it: “We have a deep love for people, and it’s not easy to love people.”

And as far as having a big ego? Well, sources prefer to call it confidence tempered with humility. After all, you can’t stride into a room and lead a project without some juice. “We look for people who are hungry, humble and smart,” says Slalom’s Goodwin.


Kevin Duggan, client service partner, and Amalia Goodwin, managing director, Slalom (Photo Credit: Jason E. Kaplan)

4. How do you keep consultants happy?

National consultancies tend to “burn and churn” through employees with an annual attrition rate between 15% and 20%, according to a 2018 Mercer survey. That kind of turnover is most likely the result of a culture that demands long hours, lots of travel and internal competition.

The local consultancies use a different model. “We have a people-first culture,” says Duggan from Slalom. It is a typical answer that translates into no flying unless a consultant wants to; no up-or-out mentality, meaning it is OK to spend a career consulting and not move into a leadership position; and no expectation of a 60-hour workweek.

Smith knows this relatively laid-back, local approach can be jarring for some. He recalls one hire who was checked in on by four different leaders after working two weekends in a row. “He said, ‘I’ve never had anyone worry about me working overtime before.’”

Then there are the perks and benefits that local consulting firms offer: unlimited PTO; monthly all-hands meetings in a special location; and big, two-day, quarterly events for employees and a guest are not uncommon. Some go even further, providing an on-call business therapist and a year of free diapers for new parents.

Consultancies offer these extraordinary, and expensive, benefits for two reasons: recruiting and retention. The fight for talent is fierce, and no company wants to lose a rising star to the competition. Creating a culture where people want to stay and thrive makes the best business sense.

5. How do consultants know 
they’ve been successful?

Metrics, metrics and more metrics. From a Net Promoter Score to a “Plan, Do, Check, Act” process to weekly internal engagement surveys, consultants generate lots of data. They have, to according to 71 & Change’s co-founder Beth Montag-Schmaltz.

“What we do is so subjective, so gray. This is a way to make it black and white. We literally measure every element of the change we are implementing.”

Executives are not only embracing this data dump — they’re demanding it. “Business leaders love their measurements and score cards,” Montag-Schmaltz says. “We’re speaking their language.”

But what about the argument that surveys themselves are subjective? “Well, at the end of the day, employee perception is reality,” she counters. “You may not like that, but it’s the reality.”

Once the change has been implemented, more concrete, quantitative measurements can be taken. For instance, Montag-Schmaltz helped a large insurance company move to an internal, paperless document-management system. The shift, which affected thousands of employees in several offices across the country, was measured with one simple metric: printer volume.

If the process was successful, printer volume should go down. Leader boards promoting competition between offices helped volume go down further.


Amy Weeden, CEO of Propeller (Photo Credit: Jason E. Kaplan)

6. How is the consultancy business changing?

Just like the rest of the service industry, consultants who charge by the hour are feeling squeezed. “White-collar work is becoming less valued,” laments Pepper Foster’s Smith. “Last time I hired a plumber, I paid $180 an hour. Now I’m struggling to get $180 an hour for experienced MBAs.”

Firms that take on traditional staffing roles, aka capacity building, as all or part of their business are definitely feeling the pinch. Margins for execution work, such as implementing large software platforms or other technology projects, are shrinking as everyone fights for the same jobs. “We do see traditional staffing roles becoming commoditized in the industry,” says Point B’s Donaldson.

Fixed fees for strategic work that requires deep expertise, however, is holding.

The national fly-in, fly-out model might be in for some disruption as well. Montag-Schmaltz reports seeing more consultancies saying that they are locally based companies. “Clients don’t want to pay for travel anymore,” she says.

“They’re not interested in road warriors.” She adds that technology is allowing more virtual work than before, revealing that she has two or three projects she is working on remotely, something she would have “fought tooth and nail against 10 years ago.”

7. How about those free insights?

All the consultants talked about artificial intelligence, machine learning and predictive analytics as continuing business drivers. But don’t expect the rate of adoption to slow down any time soon. The speed of adoption and the depth of how far these technologies will reach promise to transform the nature of work. Individual companies will have to adapt to stay competitive.

“We’re seeing organizations fundamentally changing the way they approach running their business because they have to,” says Donaldson.

This requires an engaged, vital workforce ready to embrace change. “AI and machine learning?” asks Montag-Schmaltz. “Nothing puts the fear of God in employees more than those two words.”

The insurance, utilities and banking sector, where there is a layer of repetitive, redundant work, is already primed for disruption from those forces. The challenge, according to Montag-Schmaltz, will be refocusing and reskilling that workforce.

Smith goes one step further. “All work will be gone soon,” he says. “A whole raft of jobs you think would be immune to automation — lawyers, doctors — anything that involves analysis of data or repetitive action will be going away.” He points to LegalZoom, a company that automates legal services, as an early example.

Smith admits these changes will take time, between 20 and 40 years, but the rise of autonomous vehicles, which he pegs at only five years away, will bring untold consequences for the 5 million Americans who make their living driving.

“Eight million jobs went away during the recession. Now one application of technology will wipe out almost as many,” he says.

Propeller’s Weeden agrees automation will bring profound disruption to the workplace. She also points to a desire to get deep on the customer persona and experience. While that is not groundbreaking for big retail players such as Nike or Columbia Sportswear, it is new thinking for utilities, health care and the financial-services sector.

“When we make a change, it’s to increase customer loyalty,” she says. “That’s a big trend.”


 
Article originally posted on OregonBusiness.com.