The Monitor Group's recent bankruptcy announcement took many in the business community by surprise. That's not unusual, given that the firm—like many in the consulting industry—was privately held and therefore not under any obligation to release financial reports. But what about the people inside the firm? How much did the consultants—business experts all—know or suspect about the state of the firm's finances? That's a question that we at Vault are almost uniquely qualified to answer. Prior to its demise, Monitor Group was one of the firms that distributed our annual consulting survey to its employees.
This year, between March and April, over 100 of Monitor Group's approximately 1,200 consultants took the time to fill out our annual consulting survey, answering a mix of qualitative and quantitative questions on everything from their opinions on the firm's hiring process to—yes—its overall business outlook.
So what did Monitor's own employees have to say about the firm's prospects, just six months before its demise?
How they voted
First: the quantitative data. When asked to rate their firm's overall business outlook on a scale from one (in a precarious position) to ten (well positioned to thrive), Monitor's consultants returned an average rating of 7.25—a vote of relatively low confidence that saw the firm rank second from bottom in the category out of all the firms who qualified for the ranking.
Perhaps unsurprisingly, the firm's leaders didn't seem to inspire much trust either: Monitor's consultants rated them at 7.63 out of 10
What they said
While we can infer a lot from the numbers above, stories are best told with words and we were fortunate in that a significant number of Monitor's consultants chose to supplement their ratings with comments on the firm's outlook. While there were a number of comments that were bullish on the firm's prospects ("The leadership seems to have to the appetite to make choices and execute on them. It is reassuring to see conviction in a tough economy."), the most interesting—at least from the point of view of figuring out what went wrong—are those that express specific recommendations and reservations about Monitor's performance. Those concerns fall into two main groups: leadership/strategy issues, and concerns about the wider economy.
"Outlook is much improved since the downturn, but there is still infighting at the partner level and strong performers are leaving. Feels like the firm is spinning its wheels."
"I think Monitor is one of the most innovative firms in the industry -- we truly offer custom solutions. The combination of our design-centered innovation practice (Doblin) and our traditional strategy practice provides an offering that is truly unparalleled in the industry. That being said, I sometimes find firm leadership to constantly introspect and look at what needs to be changed internally, when the real focus might be how to better market and brand ourselves outwardly."
"Partner base is not effective in selling work, this has improved significantly but we still have a long way to go."
"Firm has had to adjust year-end revenue/profit targets (and subsequently bonus pool) down significantly the last couple of years. I question whether the next big innovation will come from Monitor; I haven't seen anything recently in new IP development that seems transformative."
"Firm management is poor—I don't have confidence in leadership making sound decisions."
Wider economic woes
"We have had a slow quarter—partially affected by the global macroeconomic crisis and partially effected by the transition to a new firm strategy."
"Industry overall is quite volatile, so we are never completely sure about our forecasts, and ability to cope with uncertain times, but I think we have gotten much better at managing for tough times out of the last recession (2009) when we made some much needed structural changes."
"The leadership is actively making decisions to implement a new global strategy. I am confident that the recent "professionalization" of our partnership will mean good things for the future of Monitor. That said, there are some tough choices to be made about where we are focused and how we are aligning internally to take advantage of opportunities in the market."
"The company is on firm footing and has a clear path forward to drive long term growth, but is subject to the continued uncertainties in the global economy in certain regions."
Newsflash: Looking back easier than looking forward
With hindsight, it is easier to see the roots of the failure reflected in these comments than it was to imagine the prospect months or even weeks ago. Taken together, the comments above seem to present a fairly damning case against the firm. However, they also represent less than a third of the comments we received regarding the firm's outlook; an almost equal number of responses expressed the belief that better things were in store.
With all of that in mind, the question of how much Monitor's employees knew or suspected remains open. Certainly, there were plenty of employees who had their doubts about the firm's strategy and leadership—although none that suggested anyone knew the end was nigh for the company.
While transparency into what's going on in the C-suite is unlikely to improve under the new owners, there is one silver lining for those who survive the transition: Deloitte featured in the top-20 for Overall Business Outlook in our 2013 Consulting Rankings!
--Phil Stott, Vault.com