| Topic Name: |
Mitchell Madison |
| Message Name: |
the truth part V |
| Date Posted: |
03/26/2001 |
| In Reply To: |
In the years that followed, MMG would enjoy eye-popping growth, while
dazzling on-campus recruits with its provocative vision of a strategy
firm determined to liberate its consultants from a profession's
growing bastion of hierarchical consultancies. M MG was meant to be a
firm where creative thinkers thrived in a freedom-based culture. It
was an inspired vision, but one MMG former partners say became
stifled by a frat house culture and an unyielding drive for growth -
a firmwide mandate that would ulti mately lead to a boardroom scuffle
and the exit of five of MMG's founding partners and directors.
MMG's story is one that speaks to the clandestine and clubbish nature
of partnerships within an industry that's been slow to adopt
professional standards. It's a tale in which MMG consultants become
as much a victim of their firm's appetite for growth as they do an e-
consulting stock bubble.
Hunters & Farmers
"We spent about two years at A.T. Kearney, and then we bought
ourselves out to start Mitchell Madison, and there was one other
person and myself who started the firm in 1994," says Arnab Gupta,
one of the former McKinsey consultants who looms large in the history
of MMG.
Gupta's words would likely be something of a revelation to the firm's
25 other former founding partners who helped establish a financial
services practice at A.T. Kearney before breaking away to form MMG.
But for those who run with the renegades, team spirit has never been
ranked high among consulting's prerequisites.
As the chief architect of MMG's sourcing business, Gupta, along with
MMG partner Vikas Kapoor, is credited with having built the practice
responsible for capturing 50 percent of MMG's annual revenue - a fact
that elevated his and Kapoor's stature withi n the $250 million firm.
Asked about the necessity of instilling shared values or principles
inside the professional services construct, Gupta prefers to boil
down what he views as a firm's critical components.
"In professional services you hire good people, you allow them to
control their own franchises and have them get the clients going, so
they can build it," explains Gupta, who, like a true renegade, once
again broke away from his adopted consutancy, mar chFIRST, and last
May established Zeborg, a marchFIRST spin-off specializing in
business-to-business sourcing. Prior to the sale of USWeb, Gupta
would play a central role in MMG's efforts to evaluate and enhance
its compensation scheme.
|
| Message: |
Those who desire a better grasp on what some might call consultancy
fundamentals may want to reach for the profession's noted primer -
Managing the Professional Service Firm - and open to the chapter
titled "Hunters & Farmers."
As its title implies, the text's author, David Maister, suggests that
consultancies most often operate under two distinct business systems.
While the success of the farmer system is built on firmwide
collaboration and a set of shared principles or valu es, the success
of the hunter system is built on entrepreneurialism, opportunism,
flexibility, and quick response to client needs. And the author
underscores the hunter model's dependence on a trusted compensation
system - whose absence, he concludes, cou ld put a firm's competitive
hunters at odds with one another.
While successful consulting partnerships have been built leveraging
the virtues of both the farmer and hunter systems, few observers of
the profession would challenge that given its history, MMG was built
on the latter.
The Bubble & the Cash Crunch
Nearing his late 50s, Thomas Steiner is silver-haired and wears
spectacles. He could, perhaps, pass as savvy investor Peter Lynch, or
maybe just his stunt double. But Steiner has never been one to loom
in the shadows.
"The original vision was to create a 'type one' firm," he recalls,
while applying the "type one" label to McKinsey & Company, Boston
Consulting Group, and Bain & Company - three firms whose founders he
seems to sense a kinship with.
"Bill Bain didn't have the option to sell his firm, frankly - or to
sell it for a multiple of its revenues. The only market at the time
was the other partners, of which there might have been only five, and
the bank," says Steiner, quickly drawing a com parison with Bain &
Company's founder when asked why MMG decided to abandon its "type
one" vision and sell out.
"Now, if we were in the 1950s, like Marvin Bower, we could have gone
for it," says Steiner, who believes McKinsey's founder enjoyed the
advantage of having less competition.
"If we had not been in the dot-com era, it's an interesting question
as to whether we would have sold," says Steiner, who describes the
late 1990s surge in e-business consulting stocks as "the interesting
bubble" - one Marvin Bower never laid eyes on - and one that would
lead USWeb and Mitchell Madison to the altar in the third quarter of
1999.
|
|
