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The Big PICTURE
BCG's
Richard Lesser on coping with change, volatility and disruption
E ver since taking over the
reins of consulting major Boston Consulting Group (BCG) in January, Richard
Lesser has been trotting the globe, meeting clients. As the global economy
limps back to normal, these are interesting times to lead a white-shoe
advisor with struggling companies needing all the help they can get, with
growth, with costs, with strategy, with execution. Lesser took over from a
rockstar amongst the consulting firm CEOs, Hans Paul Burkner, who in his
ten year tenure nearly tripled consulting firm's revenues to $3.55 billion
while doubling headcount to nearly 9000 consultants across 40 countries.
Earlier the regional chairman for the Americas, Lesser, now has the
challenging task of leading the strat firm in uncertain times when the
consulting profession is witnessing new challenges and newer competitors
are emerging on the horizon. BCG's sixth CEO was in India recently, where
he took out time to discuss with CD, the changes and challenges facing the
profession. Edited excerpts:
Clayton Christensen recently wrote in a Harvard Business Review article
that consulting is at the cusp of disruption. What are your thoughts?
It is a very dynamic time for our industry and
I think it is the most dynamic time since the period just before and just
after the dotcom bubble when there were new firms, disappearing firms, and
restructuring. We are in another one of those stretches right now. The
second thing is that the expectations of our clients continue to rise and
the need for investment orientation in how we approach the next few years
is critical. That investment will not just be how we are doing traditional
things better, but there will be different kinds of tools, different kinds
of capabilities and so forth.
Where I would have a different view perhaps is the
belief that small firms and software are going to replace a lot of what is
done, because at least the way we practice it, a deep belief we have is
that competitive advantage is not about adopting best practices or
following what others do but in being unique and differentiated and
understanding where you stand out. Finding those insights is quite
challenging and it requires really good understanding of the industry, the
competitive dynamics and the way different loops will shape that going forward.
In the big, complex, global, fast changing organizations, the ability to
make change happen in any organization, to get it done and get it right is
not so easily replaced. Embrace Change
There is a portion of the analytical part of our
work that will absolutely increase and there will be more leveraging of
tools and analytics but the core of what our clients needs is customising,
how to have differentiated advantage and the ability to make change happen
in an organization. That's not so easily replaced with small firms that may
have deep capabilities in one area or with tools and analytics.
How is BCG adapting to the changing industry dynamics?
BCG has been adept in tiding over the various
waves of that have swept consulting. Over the years, we have seen four
waves. The first wave was strategy and getting into recommendation. The
second was implementation of those elements. Thirty years ago BCG built a
really great reputation in strategy. Then that wasn't enough and you had to
be able to help your clients implement the strategy. Ten years ago you did
those two things, but you also need to be able to orchestrate large scale
change across these issues, functions, geographies. Today, what we are
doing is those first three plus also enabling the organization. The world
requires more adaptiveness to deal with uncertainty and volatility. You
have to build the underlying capabilities of the organization so that it
can respond and evolve over time.
Our clients are not just looking at one time change,
they want that because they need the value from it, whether it is top line
value or bottom line value. They are now looking to build a stronger more
resilient team, equipped with better tools, and an ability to sense what is
going on in the environment. That's a big part of what we are focused on.
We are also building more depth of capabilities in
our various practices, simply because our clients expect both the team and
the tools to be world-class. Finally, we have to help clients interpret how
new technologies can be applied in their business, not just to keep up, but
to create advantage.
How has consulting changed in the last five years?
There are five things that we would highlight.
First is the search for value-creating growth. The world was growing at
such a pace that people just assumed growth came easily and was
automatically value creating. Now most of our clients are discovering that
growth is harder to find in many places, even the emerging markets. The
rate of growth will be a couple of clicks lower than would have been in
prior decade. They are finding value creating growth in a very intensely
competitive world, a tough one to crack. The second is that productivity
now is measured at a world class level against the best players around the
world, not just locally. The third is around adaptiveness. The fourth is
around connectivity, investing not only in digital infrastructure but also
in the principal infrastructure. When I talk to CEOs, there is a
recognition of managing for the long term, managing in a multi-stakeholder
environment, understanding that in many cases doing well and doing good
have a very strong linkage.
At times of such uncertainty and change, why is the classic strategy
work going down for consulting firms?
Knowledge disseminates very rapidly in this world. It's not a surprise
to me that our clients capabilities on many fronts continues to grow,
including their own ability to think through strategy, or do a typical
three year plan or five year plan or work through an analytic issue. Our
clients are very much capable of doing things that they would have turned
to an outside crew to do ten years ago. But the challenges continue to go
up and our responsibility is to bring new ideas, new tools and capable
people to help them work through those issues. Some things are strategy,
but in today's world where competition is so intense, it's often about
getting more fit, more adaptive, embracing change and strengthening
leadership.
Clients have become increasingly sophisticated and know exactly how to
structure engagements, measure delivery, and often ask for the consultants'
skin in the game. Is that a good thing for the profession?
Sophisticated clients are something I feel great about, because BCG has
always been trying to win on quality. The ability to ensure value capture
from consultants is an increasing priority for our clients, and we have a
shared objective in that, because if I want to be their partner five years
from now, I really need to create impact. There are some projects where we
are open to having our fees at risk and some are linked to performance
results and we are quite happy to do that. But clients tend to go back to
traditional methods once they realize that we deliver and they have to pay
more.
Do you see more productised services coming from consulting firms in the
future?
We have more tools and more capabilities that we can leverage, but
labeling them as products is a double-edged sword. The clients want the
comfort of knowing you know how to do this and that you are not
experimenting on them and that it is a tried and tested, that it yields
value. But if you think that solving the most difficult business problems
for the best companies in the world is just a cook book, that's going a
step too far.
How is BCG India doing compared to firms in other geographies?
It's one of the most robust parts of BCG, and has been for many years.
Year after year there is an obsession here with delivering impact and
building relationships and attracting amazing people. And when you get in a
good loop in such a dynamic economy like India it becomes a very virtuous
cycle and that is what we are in. We have another year of 20%- plus growth.
We growing at 20 to 30% since a long time.
How desperately do you want to beat Mckinsey?
Honestly, what I discuss everyday is about getting better, because the
history of the BCG is when we get better, we outperform and we grow and it
offers great opportunities for our people and we deliver great value to our
clients. I think it is so easy to get caught up in externalities, some of
which you can control. For our team, focusing on the client, focusing on
building our capabilities, building our people is the orientation that I
have. And then if they to do that, it will bring results, which they
have…and that will continue.
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