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by Vault Consulting Editors | June 25, 2008


It's been about a month now since Booz Allen announced its snap-up by The Carlyle Group, resulting in the split from its now-all-grown-up corporate sibling Booz & Co - enough time to gauge the effects of the divide on all parties involved. After speaking to a number of consultants on both ends of the scale, the verdict seems to be business as usual.

On the Booz side of the equation, where you'd expect to see most of the tangible effects (aside from a brand new logo, which seems to be growing on people like mold on cheese), staffers describe a new "buzz" around the office generated by the excitement of the structural shift. Day to day, however, consultants don't seem to feel much of a change - the biggest change seems to have taken shape in the marketing and communications side of things, with consultants working with clients just as before ("Our work continues to be the same, and our existing clients recognize that"). As one source puts it, "The transition has been flawless. We've done a good job explaining stuff to the client, done a good job on campus, operationally, with new e-mails, a new intranet and new templates." Most of the sources I spoke to had positive things to say the split, and feel that the firm is heading in the right direction.

There have been a few concrete changes, however, first in terms of relationships with higher-ups: "One effect has been more involvement from the partners and senior staff in terms of understanding what the junior staff wants. We are now looking into more robust training programs, mentorship programs and ways for junior members such as myself to participate in cross-country staffing," an insider explains. (This new open attitude exhibited by top leadership may be a result of the fact that the firm no longer falls under the stricter governance rules of the old Booz Allen structure.)

Things are also looking up in the areas of promotion and recruiting, and insiders believe they will now be able to compete more directly (and fiercely) with their competitors in the pure strategy space. A source states, "We will likely resume aggressive hiring of strategy and industry personnel. We took a bit of a painful deceleration in the past year to accommodate the PE transaction as well as recognition of a slowing market. Assuming business doesn't fall off a cliff, I think we can be bolder in competing for the very best talent at the best graduate programs out there. " And just in terms of selling themselves to undergrads and MBA students, Booz will be able to market itself as a pure consulting strategy house, which helps them match up more linearly with their Bain and BCG-type competitors. Insiders also see hope for a faster path to partner: "The government business (such a completely different business model) had different promotion pipelines, different expectations. Over time, some of that mindset started to impact the opportunity for promotion on the commercial side. Now, it's just commercial folks evaluating commercial folks, and promotion is not just based on how many years you're on the job," a consultant explains.

On the Booz Allen Hamilton side, a consultant notes that she's "not feeling any effects, and I don?t think I actually will. We still have a close relationship with the commercial side, so if projects come up and they need the expertise of someone on the government side, they're going to turn to us for help." The same source explains that "the only difference is it's going to be more of a formal contract than what it used to be, where you just join somebody else's team for a certain projects. I really don?t see, from our perspective, that that's going to change at all." A colleague agrees that there have been "no tangible effects on day to day life at all. I wouldn?t know anything was going on at all, if it weren?t for the constant communications we get from the CEO, and all the e-mails and resources we go to on a day-to-day basis, just to keep us informed." As for the perks of being associated with a company like Carlyle, aside from bolstering its status even more in the public sector, a consultant explains that now that the government side doesn't need to worry about helping the commercial side out, monetarily speaking, "this puts more money back in our pot at the end of the day ? This means more money, more events, activities, higher wages, promotions down the road, things of that nature. They haven't made any promises, but it's beneficial to be on this side, in my opinion."

The relationship with Carlyle may not be all sweet-smelling roses, however. Check out this discussion on the Vault Message Board discussing some conflict-of-interest issues that are arising between BAH's acquisition contracts and Carlyle's holdings. Will this mean the firm will face higher competition in the market? Maybe it's not just business as usual ?


Filed Under: Consulting

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