Consulting TimesFebruary 2011 | Top-Consultant.com

State of the market: Consultancy in pharmaceuticals

FEATURE

Consulting firms turn away work because of top talent shortage

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Wipro’s IT business with new CEO 4

Alexander Proudfoot names new head for global Procurement practice 4

Moorhouse gets off to a winning start in 2011 5

Simon-Kucher achieves record results in anniversary year 5

Consulting firms turn away work because of top talent shortage 7

Atos Origin sets out its ambition to be a zero email company within three years 9

Everyone’s (not) a winner 10

The helpful client who needs help 12

Accenture identifies eight trends driving the future of IT 15

State of the market: Consultancy in pharmaceuticals 16

PwC: CEOs’ confidence grows as recession woes wane 19

Building a business development culture is easier than you think 20

Can corporate entrepreneurship be a new source of growth? 22

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CONTENTS

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February 2011 NEWS

Wipro appointed T K Kurien as CEO of the information technol-ogy business and executive direc-tor of the company.

Girish Paranjpe and Suresh Vas-wani, the current joint CEOs of the IT business, steped down at the end of January 2011.

Commenting on the appoint-ment, Azim Premji, Wipro’s chair-man, said: “The joint CEO struc-ture was one of the key factors that helped us successfully navi-gate the worst economic crisis of our times. With the change in environment, there is a need for a simpler organisation structure. Over the last 10 years, Kurien has been instrumental in building and scaling many of our businesses successfully. His track record with customers, passion for excellence coupled with strategic thinking and rigour in execution makes him uniquely positioned to lead Wipro’s IT business through the next phase of growth.”

For the quarter ended 31 Decem-ber 2010, Wipro said its IT services business segment recorded rev-enue of Rs. 59.49bn ($1,328m), representing an increase of 15% over the same period last year. EBIT for this segment was Rs. 13.21bn ($295m), representing an increase of 8% over the same period last year.

Rival Tata Consultancy Services posted a 30% rise in quarterly profit and Infosys reported a 14% increase.

Wipro is forecasting its IT services revenue to be $1.38bn to $1.41bn for the next quarter, up 3%-5% from the previous one.

Wipro’s IT business with new CEO

APPOINTMENTS

Alexander Proudfoot names new head for global Procurement practice

The Alexander Proudfoot Com-pany, one of the world’s fore-most operational improvement consultancies, announced the appointment of John Sharman, a recognised leader in procure-ment, to head its global Pro-curement practice.

Mike Melling, Alexander Proud-foot President, UK, said: “Alex-ander Proudfoot is the world’s most experienced operational consulting company, and I am pleased that John is joining us in our efforts to improve and ex-pand our client offerings.

“John is a leading supply chain expert with over 25 years of in-depth and wide ranging experi-ence. He is a proven leader, with first hand experience of trans-forming businesses, and I am sure that his appointment will further strengthen our ability to deliver significant improve-ments in our clients’ organiza-tions, as we are proud to have done for over 65 years.”

Alexander Proudfoot explains that with businesses sourcing materials and products from all over the world, efficient pro-curement plays a more impor-tant part than ever in determin-ing a firm’s success.

In addition to meeting longer term procurement targets, cor-porates now also need to deal with the immediate threat of inflation in many parts of their supply chain.

The rising cost of raw materials across many sectors, coupled with the increase in the price of

fuel, has only served to inten-sify the pressures on margins. In many countries, businesses are also facing the unfamiliar chal-lenges of expanding produc-tion after such a lengthy eco-nomic downturn.

As head of the global Pro-curement practice, Sharman’s responsibilities will include identifying, developing and im-plementing the tools and sys-tems that will enable Alexander Proudfoot’s clients to drastically improve their procurement functions and maximize their overall returns.

“I am very excited to be working with an organization with such a distinguished track record of delivering value and results to clients,” Sharman said upon joining the firm.

“There is already a very solid foundation to build upon that will enable Alexander Proud-foot to become quickly the 'go to' consulting firm for effective procurement transformations.”

Sharman joins Alexander Proud-foot from five years as a senior level consultant on operational issues, gaining experience over a range of industry sectors.

Prior to that, he spent thirty years at IBM, where he became Global Procurement Practice Executive, and provided lead-ership as the company diversi-fied and grew from a computer company into the world’s larg-est IT and consulting services company.

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Consulting TimesNEWS

The global strategy consultancy Simon-Kucher & Partners expe-rienced a record year in 2010.

The consulting firm improved its revenue by 19% to achieve €105.4m (approximately £90.4m), thereby surpassing the €100m mark for the first time in its 25-year history.

The firm also expanded its con-sulting team by 14%; it current-ly has a team of 500 permanent employees. CEOs Klaus Hilleke and Georg Tacke are especially pleased with the 2010 figures.

“As nearly every year, our 2010 results were above the industry average. After 25 years of busi-ness, we are at the same level as The Boston Consulting Group was 25 years ago. That’s a posi-tive sign,” maintains Tacke.

Business in the UK boomed last year: the London office saw a revenue growth of 57% sup-ported by a 23% growth in staff across divisions. The percent-age revenue growth in the UK was considerably higher than other geographies.

Managing partner UK Mark Bil-lige expects this upward climb to continue: “We expect the growth to continue across all in-dustries we serve, with renewed focus on banking, business ser-vices and leisure sectors.”

Nearly all industries played a critical part in Simon-Kucher’s strong growth track with more

than two-thirds of this growth coming from life sciences and services such as telecommuni-cations, banking and logistics.

Over 40% of the German con-sultancy’s revenue is achieved in foreign offices. The firm has 23 offices in 17 countries and continued to pursue its strategy of globalisation in 2010, open-ing four new offices in Beijing, Copenhagen, Singapore and Sydney.

Simon-Kucher specialises in pricing, strategy, marketing and sales, and focuses on growth and profit generation through its programme Smart Profit Growth. The firm says the pro-gramme is in high demand as the UK economy emerges from the crisis and many companies not only need to revive volume levels, but also want to boost re-turns and profits.

“Specialising in profit-oriented growth pays off regardless of the economic environment businesses find themselves in,” says Billige.

In light of the high backlog and the consistently high order en-try level, the outlook for 2011 is positive. The consultancy expects to stay on its current growth track and achieve an-other record year. By the end of 2011, global revenue is expect-ed to climb another 15% to over €120m. “We have our eye on the €200m mark by 2015,” contend CEOs Hilleke and Tacke.

Simon-Kucher achieves record results in anniversary year It is proving a happy new year

for the Moorhouse team. The programme and project man-agement advisory specialists received top honours at the In-stitute of Consulting (IC) Annual Awards recently, when consul-tant Tom Elvidge was crowned ‘IC Consultant of the Year’ and col-league Simon Dennis picked up the award for ‘Customer Delight’.

Elvidge was commended for his support to client Department for Transport (DfT) International Networks Division, with whom he created a strong partnership while working on a programme to identify and propose improve-ments to passenger and freight journeys through airports and ports.

Dennis won his award for his work on the clinical delivery of a key patient administration system for NHS Connecting for Health. Client Joe McDonald said he had helped “the programme progress further in five months that it had done in the previous five years” with his “structure, analysis and high quality deliverables.”

Managing director Dom Moor-house commented: “To start the year with that kind of feedback from a client is pretty special; winning two important industry awards in recognition of our im-pact is doubly satisfying. 2010 was a breakthrough year for us as we successfully entered new markets, however, I’m heartened that one thing remains consistent – our ability to help clients deliv-er their complex transformation programmes and our dedication to achieving their desired out-comes.”

Moorhouse gets off to a winning start in 2011

GROWTH

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Consulting TimesCOVER STORY

A new report by consulting indus-try watcher Sourceforconsulting.com has found that a shortage of senior management consultants in the UK, combined with an in-creasing demand from clients for more senior skills, is forcing a third of consulting firms to turn away work.

The report, named The balanc-ing act: trends in consulting firm recruitment and sponsored by Mindbench, surveyed 60 man-agement consulting firms, which

is equivalent to around 50% of the UK’s consulting market.

At the same time, more than half of consulting firms have recov-ered from the staff losses they suf-fered as a result of the recession, with the financial services sector seeing significant increases in the number of consultants.

The report says that this growth in headcount has happened rela-tively recently, fuelled by a grow-ing expectation that the worst of

the downturn is over and that cli-ents are starting to spend again. The recruitment demand is at its strongest at senior levels.

Taking a closer look at the finan-cial services sector, almost three quarters (72%) of consulting firms increased the number of consultants in their financial ser-vices practice; nearly half by more than 20%.

Continued on page 8 ...

Consulting firms turn away work because of top talent shortage

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February 2011 COVER STORY

... continued from page 7

Over the next six months nearly all firms (92%) expect to increase headcount in this area, and two-thirds of those expect to do so by more than 20%.

Ed Haigh, head of content and marketing at Sourceforconsult-ing.com, commented: “The in-creasing shift towards recruiting the best senior people isn’t just a sign that consulting firms are trying to recoup recent losses as a result of the recession, but it reflects clients’ increasing desire to work with – and willingness to pay for – more experienced people, rather than junior consul-tants.

This has the potential to change both the structure of many firms and the basis of competition.”

Public sector – firms expect consultant numbers to rise?

Surprisingly, over half (54 %) of firms expect the number of con-sultants in their public sector practice to grow. Given that the talk in central government de-partments is of a moratorium, rather than a mere reduction in consulting spend, the report says that this may surprise many peo-ple.

The report says that there may be three possible explanations for this predicted rise in public sector consultants:

• Consulting firms are simply in

denial about the scale of cut-backs in the public sector.

• There will still be areas of the public sector that are spend-ing on consulting services. This holds some water: as a previous Source report on the current state of management consulting in the public sec-tor found that not all public sector organisations will cut back to the extent central government departments have. Health, where the GP commissioning initiative is being rolled out, is a notable case in point.

• Demand for some firms is ex-pected to be relatively strong. Big Four firms, mid-sized op-erational firms, and some small specialists top the list.

Operational performance ex-perts in demand

Nearly six in every 10 firms say they’ve increased the number of operational performance con-sultants over the last six months and an even greater proportion – about eight in every 10 firms – say they expect to do so in the next six months.

Richard Stewart, founder of Mind-bench, sponsor of the report, concluded: “The best people have always been the hardest to find, but when finding them be-comes a commercial imperative – one linked to the very model which firms operate – then it’s vi-tal that HR directors have a coher-ent strategy in place to turn chal-lenge into opportunity.”

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Consulting TimesNEWS

Atos Origin sets out its ambition to be a zero email company within three years Atos Origin says it's time to ease information pollution, just as environmental pollution was reduced after the industrial revolution.

Atos Origin set out its ambition to be a zero email company within three years.

Speaking at the fourth in a series of innovation press conferences, Atos Origin CEO and Chairman, Thierry Breton, addresses the challenges organizations face as a result of the explosion in data.

He explains his ambition to eradi-cate all emails between Atos Ori-gin employees by using instead improved communication appli-cations as well as new collabora-tion and social media tools.

Breton said: “We are producing data on a massive scale that is fast polluting our working environ-ments and also encroaching into our personal lives. At Atos Ori-gin we are taking action now to reverse this trend, just as organi-zations took measures to reduce environmental pollution after the industrial revolution.

“The volume of emails we send and receive is unsustainable for business. Managers spend be-tween 5 and 20 hours a week reading and writing emails. They are already using social media networking more than search, and spend 25 per cent of their time searching for information.

“At Atos Origin, for example, we have set up collaboration tools and social community platforms, to share and keep track of ideas

on subjects from innovation and Lean Management through to sales. Businesses need to do more of this - email is on the way out as the best way to run a company and do business.”

The focus of Atos Origin is to adopt innovative social business solutions in the workplace to bridge the ‘social business gap.

Built on collaborative technology these solutions provide a more personal, more immediate and importantly more cost effective means to manage and share in-formation that supports the way of working in the 21st century and enables the Smart Organiza-tion.

In line with its wellbeing at Work Programme launched in 2009 to support its goal of being one of the best places to work, it has implemented a number of initia-tives to improve communication and information sharing across its organization.

For example, it is encouraging the use of tools such as Office Com-municator and has set up social community platforms to share and keep track of ideas on sub-jects from innovation and Lean Management through to sales.

Initial feedback is that these type of tools reduce email by between 10 and 20% immediately.

Information overload –

the facts:

• By 2013, more than half of all new digital content will be the result of updates to, and editing of existing in-formation

• Online social networking is now more popular than email and search

• Middle managers spend more than 25% of their time searching for infor-mation

• 2010 : Corporate users re-ceive 200 mails per day, 18% of which is spam

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February 2011 FEATURE

I’ve just seen the shortlist for this year’s MCA awards. It’s quite a long list, so details are scanty, but there’s a very tantalising group of clients there and I look forward to finding out more in April when the winners are announced.

On the other side, there’s a very familiar ring to many of the con-sultancies on view: a few are new to me, but many of the firms, both large and small, crop up again and again in these contexts.

This isn’t just a matter of an un-remitting commitment to excel-lence, although, obviously, these projects wouldn’t have got this far unless they were very good indeed. But these consultancies did something even more spe-cial: they got their act together and entered their project for an award. And they do it year in and year out.

Last year I wrote an article urging consultants to capture and enter their projects for any and every

award possible in the noble cause of advancing human knowledge. This year I have a simpler mes-sage: enter awards and make money.

Coincidentally this week, a com-pany called Awards Intelligence, a consultancy which helps its cli-ents win the things (yes, there re-ally are no limits to our industry), forwarded me some fascinating research from the British Quality Foundation.

Companies which won awards saw their sales increase by more than a third. Smaller companies’ operating income went up by 63%, while larger awards win-ners gained a 48% boost. Com-panies which won awards saw their financial performance im-prove within a year of winning the award but were still ahead of their peers a year later.

True, the effect might not be en-tirely causal: an award-winning performance might coincide with

a company getting its act togeth-er in all sorts of other ways but still: look at all that money.

Now, it’s easy to be cynical about winning awards. Anyone who’s sat in an awards ceremony, watching some clapped out co-median struggle (or sometimes not) to disguise their ignorance of and contempt for the profession-als their addressing, while serv-ing up a routine of warmed-up leftovers, will know what I mean. (There are exceptions: the com-mitment and professionalism of Clive Anderson and Gyles Bran-dreth spring to mind. Are there awards for awards hosts?). And we all know people who seem to do very little else in life but plot their next award.

I should add here that I fall into the category of those who’ve ei-ther never been bothered to en-ter awards or have had to be bul-lied into it by a marketing person. If you’re incredibly lazy or don’t handle rejection well, it’s not a

Everyone’s (not) a winner If there are significant obstacles in your organisation to getting an award entry together, that raises all sorts of questions that are worth asking, says Mick James.

by MICK JAMES

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Consulting TimesFEATURE

bad strategy. But I’ve seen the ef-fects of this at the other end as a judge. Awards entries can be in-credibly patchy, although organ-isers will hardly ever admit to this (“incredible range of entries…so hard to choose a winner”).

First, there’s the volume. In an ideal world the event organis-ers spend some time winnowing down the entries to a long-list and then a short-list, at which point the judges are unleashed on the good stuff. On other occa-sions, you find yourself looking at two entries, both of which are of such low quality almost anyone could outclassed them.

Omissions from the long-list are another interesting point. Surely any big consultancy firm must have at least one project out of the thousands they do each year that they feel proud enough to enter for an award? How does a small firm even survive if every-thing they do is mediocre?

In other cases, you look at an entry and wonder if your clients get this sort of quality? Again, although everyone always says how difficult it was to pick a win-ner, the gap between the best and the worst entries is often em-barrassingly large.

I wonder how many consultan-cies each year miss out on awards they could have walked—if only they had entered. Meanwhile, other firms are running out of shelf-space for all the abstract lumps of glass they collect each year.

If you’re not entering awards each year, you have to ask yourselves why not, but not so much “why don’t we” as “why can’t we?” If you choose not to enter awards, or you’re not a member of a relevant body, for whatever reason, so be it.

But if there are significant ob-stacles in your organisation to getting an entry together, then I

think that raises all sorts of ques-tions that are worth asking. How is our client feedback? How mo-tivated are our partners? Are our consultants finding the work re-warding? What did happen to that KM project…and so on?

It’s not too late to make New Year’s resolutions. I’m planning to make this the year I attend an awards ceremony in the original trousers that came with the din-ner jacket. Why not make this the year you’re on the podium when I do?

For the shortlist, please click here.

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February 2011 FEATURE

Question: At a recent network-ing event, I met someone with whom I had dealings a few years ago. Back then, he seemed very keen to pursue a business rela-tionship and then surprised me by switching to a different option at the last minute.

Now, when we meet he seems to spend all the time asking about my work, in which he takes an in-telligent interest. The reason he gives is that he will be in a bet-ter position to recommend me to other people but I also know he is starting a new venture.

This is taking him into territory which is unfamiliar to him, but where we both know I have par-ticular skill and experience that he could find useful. Despite the fact that the new venture is not secret and needs all the exposure it can get, when we get together one-to-one he seems very reluc-tant to talk about it and always deflects attention back to me.

We have a lunch meeting coming up and I want to get to the bot-tom of why he is so reluctant to

move the conversation on to ar-eas of mutual interest. How can I do this without sounding impa-tient and confronting?

Answer: There are a number of possibilities here. One is that he feels a little guilty about the way your previous encounter turned out, and is looking for ways to help you to make up for it by be-ing genuinely helpful in putting you in touch with new business.

But you seem to sense that his interest amounts to more than that, and that he has a genuine need that he is reluctant to make explicit. Before your next con-versation, try this test which will help you to firm up your hunch that your skill and experience are needed.

1. Your belief suggests there is a gap between what would be go-ing on in the new venture without your help and what could hap-pen with it. Ask yourself, “What is likely to be going on now?” and “What should be happening in-stead?” For example, what is go-ing on now could be that a client

is continuing to use the market-ing approaches they have always used. What should be going on is that they modify their approach in the light of understanding who their most profitable customers are and where they come from.

2. Next, you need to distance yourself from your skill and ex-perience and think in terms of a client requirement to resolve the gap you have identified. Express your skill and experience as, “A way of doing something, so that something happens.” Be specific about the ‘something’. For exam-ple, a client might need, ‘a way of profiling their most valuable customers’ so that ‘marketing ef-fort can be focused on attracting more of them’.

3. Now you need to undertake a quick and dirty risk assessment on their behalf. Think about the worst case scenario if the client does not address the requirement by implementing your solution or something very like it. This will ‘qualify’ the requirement against the likely cost of your input. The outcome might be, ‘the client

The helpful client who needs helpSometimes we sense that the client has a need they are reluctant to express. Malcolm Sleath from coaching consultancy 12boxes suggests a way of uncovering what is really going on.

by MALCOLM SLEATH

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Consulting TimesFEATURE

could fail to secure the most prof-itable sector of the market, and allow someone else to capture it’.

Answering these three ques-tions will enable you to clarify the hunch that your skills and ex-perience are needed. If you find the case is obvious, and from the sound of it you will, this gives rise to the fourth question:

4. If the need is this obvious to me, why is the client not actively addressing it, or at least express-ing the desire to change their situation in some way?

Try to think in terms of a dilemma the client is facing. In other words, assume that at some level the cli-ent wants to resolve the issue, but at another, there is something in-hibiting them from doing so.

Let me give a recent example. Forgive me if what follows sounds like algebra, but I don’t want to give the slightest clue as to the actual client circumstances I was dealing with.

A potential client appeared to be embarking on a challenging venture that we will call Course B. He was very familiar with the technical aspects of the project, but there were certain commer-cial and other features that were quite daunting. It seemed reason-able to suppose that he would need help with these, and we began to talk to him with a view to supporting him as he pursued Course B.

But then he started to procras-tinate. He showed a great deal of interest in our expertise, but never got to the point where we had a conversation about how that expertise could be applied to Course B. Like you, we were be-ginning to feel a little frustrated.

But, instead of pushing at the is-sue, we used the conversation to explore a little history – ‘How did this opportunity come about?’ and so forth. The answer was in-teresting. In the course of the story, the client revealed that he had previously been pursuing another opportunity. Let’s call

it Course A. Of the two, Course A was by far the most attractive. But the project had been abort-ed, and left the client feeling let down and very disappointed. In fact, he was living in hope that a similar opportunity to Course A would present itself.

The dilemma turned out to be that in actively pursuing Course B, the client was convinced that he would be sabotaging any future chance of another Course A. For-tunately, we were able to find a way of allowing the client to have his cake and eat it. We devised a way of going about Course B that would not get in the way of another Course A emerging, and might even encourage it to hap-pen.

The fear of losing another Course A was a restraining force on the client asking for change. Once we were able to modify the require-ment, the dilemma was resolved.

Whenever clients appear to be evasive, in the first instance it’s always best to assume that, from their point of view, there must be a good reason for it.

A gentle approach, focusing on events in the past, often reveals experiences that have lead the client to experience a dilemma in the present. Sometimes this can be resolved at an early stage by modifying the requirement (Question 2, above) to take them into account.

Regarding ‘irrational doubts and fears’ as irrelevant is dangerous. In the case of Course B, if the client had gone ahead despite his con-cerns, we would have been leav-ing ourselves open to all kinds of frustration later in the project when he failed to follow through on necessary action.

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Consulting TimesNEWS

Accenture identifies eight trends driving the future of IT

The emerging world of informa-tion technology is one in which data is king, social platforms evolve as a new source of busi-ness intelligence, and cloud com-puting finally delivers on IT’s role as a driver of business growth, ac-cording to a new report from Ac-centure.

The Accenture Technology Vision 2011 identifies eight emerging trends that challenge long-held assumptions about IT and are poised to reshape the business landscape. The report also offers “action steps” that high perform-ing businesses and governments can take to prepare for the new world of computing.

“We took a look around the cor-ner and saw a world of IT that barely resembles what enterprise computing looks like today,” said Gavin Michael, managing direc-tor of R&D and alliances, Accen-ture, who supervised the project. “The role of technology chang-ing; it is no longer in a support role. Instead, it is front and cen-ter driving business performance and enriching people’s lives like never before.”

One of the most significant trends identified in the report finds that the age of “viewing ev-erything through an application lens is coming to an end.” Instead, platform architectures will be selected primarily to cope with soaring volumes of data and the complexity of data management, not for their ability to support ap-plications.

The tried and true relational data-base will not go away, but it will soon start to make way for other

types of databases – streaming databases, for instance – that mark a significant departure from what IT departments and busi-ness users have relied on for de-cades.

“IT and business leaders will be-gin to view application services as utilities that can be procured off the shelf,” said Michael. “The roles of application and data will be reversed, with data becoming the platform that supports appli-cation services. Business leaders, as such, will be encouraged to re-frame their IT orientation around the idea of data platforms.”

The vision also predicts the evo-lution of social media into social platforms. This means company web sites may longer be the first port of call for customers. This has the potential to disrupt the way companies conduct busi-ness, posing new challenges – and opportunities – for IT.

For example, “social identities” – based on the rich history of in-formation that individuals leave in social networks – will become much more valuable to business-es than the traditional and iso-lated information they get when an individual registers on their corporate website.

Accenture also sees a new con-versation emerging around cloud computing, which will become so pervasive that the term itself be-comes superfluous. According to the report, hybrid clouds – soft-ware as a service (SaaS) and plat-form as a service (PaaS) in combi-nation with internal applications – will “cement IT’s role as a driver of business growth.”

The focus will shift from simple infrastructure solutions to devel-oping cloud strategies that de-liver increased functionality and flexibility using a mix of public and private cloud-based applica-tion and platform services. While many challenges remain, cloud is nonetheless poised to change the face of enterprise computing.

The other trends identified in the report are:

• DataSecurity:Thefortressmentality, in which all IT has to be architected to be foolproof, is giv-ing way to a security architecture that responds proportionately to threats when and where they happen.

• Data Privacy: Individual pri-vacy will take center stage as a result of increased govern-ment regulation and policy enforcement.

• Analytics: Companies that continue to view analytics as a simple extension of busi-ness intelligence will be “se-verely underestimating ana-lytics’ potential to move the needles on the business.”

• Architecture: Information technology is evolving from a world that is server-centric to one that is service-centric.

• User Experience: Today, busi-ness process design is driven by the need for optimization and cost reduction. Tomorrow it will be driven by the need to create superior user experi-ences that help to boost cus-tomer satisfaction.

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February 2011 FEATURE

Pharmaceuticals is a sector, per-haps even more than oil & gas, where the industry’s minnows are still behemoths. Never is this clearer than when looking at the revenue figures of the top 50 global pharmaceutical compa-nies, with the lowest still an im-pressive £1.5bn.

Key trends presently seen in the pharmaceutical industry that are generating work for consultan-cies are cost-reduction, new forms of business process outsourcing (BPO), acquisition & consolida-tion and research & development (R&D) challenges.

“The biggest challenge for phar-maceutical companies is always the pipeline of new drugs and, currently, pipelines are shrinking”, said Paul Attridge, head of life sci-ences at CSC. New drug develop-

ment takes place over a 10-year cycle, with an average of $100m investment required. Companies then have a limited timeline to make profits before generic com-panies enter the market. This de-creasing pipeline of new drugs has significant implications for the revenues and profits of these pharmaceutical companies and is the key driver behind many of the different directions these firms are trying to take. Along with the declining pipeline of new drugs, there is also the question of what the next “blockbuster” drug will be. Firms are focusing on drugs that target many of the degener-ative diseases, but they have en-countered difficulties in R&D, see-ing many new drugs failing at the second and third stage of trials. This has resulted in the loss of a significant amount of R&D invest-ment, and a large number of jobs.

These economic conditions have led to a great deal of consultancy work, within a sector looking to maximise profits. This work falls into broad categories of cost-re-duction and outsourcing in order to maximise profits, despite fall-ing revenues, and acquisitions, strategic marketing and joined up R&D to improve drug/prod-uct/sales pipelines.

Acquisitions across the market range from within ‘big-pharma’ (e.g. the relatively recent acqui-sition of Wyeth by Pfizer), to big pharmaceuticals buying small firms, where the aim of the pur-chase is to own a patent, a com-pound or for product fit. John Rountree, co-founder of mid-sized pharmaceutical consul-tancy NovaSecta, says that much of the deal activity in the ‘mid-pharma’ sector is about “building

State of the market: Consultancy in pharmaceuticalsStephen Humphreys from Huntswood reviews the consultancy market in pharmaceuticals.

by STEPHEN HUMPHREYS, Recruitment Manager, Huntswood

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Consulting TimesFEATURE

capability and partnerships, not just compounds”. For example, many European firms are looking to acquire in the US to assist in the move to new markets.

NovaSecta is helping companies in the mid-pharma market with their “front office”. The consul-tancy particularly focuses on the gap between strategy and opera-tions; the practicalities of deliver-ing strategy. On the other side of the reducing pipeline issue, CSC focuses on the cost-reduction as-pect, with strategic sourcing, IT implementation and BPO.

Within R&D, NovaSecta is looking at generating more innovation, strategic outsourcing of research, and the interface of innovation and marketing. This last point is particularly important at the moment. Essentially, pharma-

ceuticals is a business that sells the output of good R&D. Linking these two functions is essential for a streamlined and effective pharma business, and NovaSec-ta is seeing significant business growth in this area. In summary, its front office project areas are:

• Research & development – ac-celerating proof of concept, evolving and building func-tional capabilities, partnering effectively.

• Corporate development – supporting clients with their strategic intent, and helping to make that happen (e.g. ac-quisitions vs. organic growth, risk management, partner se-lection).

• Strategic marketing – help-ing to improve the interface with R&D. Ensuring medical, marketing and research work together.

On the “back office”/cost reduc-tion side, there has been a steady growth of IT outsourcing, along-side the development of busi-ness process outsourcing. The growth of the outsourcing model has lowered the price-point even further. This has had significant implications for the consulting in-dustry, as the traditional US inte-grators Accenture, IBM and EDS/HP are being replaced by the In-dian firms TCS, Cognizant Wipro and Infosys. This, coupled with a consolidation of the number of suppliers that each pharmaceuti-cal company uses, has put a lot of pressure on the market, leading to consolidation in the consul-tancy arena. CSC’s Attridge says his company is a classic example of this, with its acquisition of First Consulting Group in 2008 and, even more timely, the acquisition by CSC of Image Solutions Incor-porated (ISI) at the end of 2010.

Scale and depth within the con-sultancy firms is critical.

“These market developments and acquisitions leave us in a very strategic situation to pres-ent a stronger BPO offering to big-pharma at a time when they are looking for ways to further cut operational costs,” says Attridge. He says acquisition has also in-creased the firm’s competency in the regulatory outsourcing space where it has won deals with GSK, among others. “This is a market that few of the other outsourc-ers are focusing on, and is a real growth opportunity for CSC. This move is a real game-changer,” he says.

Pharmaceutical companies are increasingly looking to consul-tancies for support. The “back of-fice” needs to cut costs, through operational improvements and large scale outsourcing of IT, busi-ness processes and regulatory reporting. This demand has led to an expansion of the pharma group at CSC, along with acquisi-tions, from 100 to 550 people.

It’s a similar story for the “front office”. The pharmaceutical com-panies want to increase sales and specialist firms like NovaSecta are working with them to tackle strategic marketing issues, R&D performance improvement, and make proactive and driven cor-porate strategies happen. As cli-ents have succeeded and taken on more challenges, NovaSecta has been able to grow its own business in terms of both client base and staff.

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Consulting TimesFEATURE

PwC: CEOs’ confidence grows as recession woes wane

Two years removed from the depths of recession, CEOs’ con-fidence in future growth has re-turned to nearly pre-crisis levels, according to PwC’s 14th Annual Global CEO Survey. In the world-wide poll of 1,201 CEOs, 48% said they were “very confident” of growth in the next 12 months. That’s a major shift from the 31% last year who were “very confi-dent” last year and approaches the 50% reached in 2008 before the onslaught of the economic crisis.

In total, 88% of CEOs said they now have some level of confi-dence for prospects in the next 12 months, up from 81% last year. Longer term, 94% now are confi-dent of growth three years from now, an increase of two percent-age points.

Renewed confidence was spread across all continents, with CEOs in India, Austria, Colombia, Peru, China, Thailand and Paraguay particularly upbeat about near term growth. Regionally, CEOs in Western Europe were the least confident. German CEOs were an exception, with nearly 80% of CEOs “very confident”, up from about 20% last year. The survey results were released at the World Economic Forum annual meeting in Davos.

CEOs said they considered China the most important country for future growth. China was named by 39% of CEOs, followed by the US, 21%; Brazil, 19%; and India, 18%. And China, the US and India were seen as the most important future sources for products and raw materials. Regionally, 90% of CEOs said they expect their

operations to grow in Asia in the next 12 months, followed by Latin America, 84%; Africa, 75%; the Middle East, 72%; and Eastern Europe, 70%. But just a third of respondents said the country in which they are based offers high growth potential.

Strategically, the best opportu-nities for growth in the next 12 months will come from the devel-opment of new products and ser-vices and from increasing share in existing markets, both cited by 29% of CEOs, and by penetra-tion of new markets, 17%. Merg-ers and acquisitions and joint ventures and alliances trailed as growth strategies.

“CEOs have emerged from the bunker mentality of surviving the recession. They now see re-newed opportunity for growth, even in the near term, and are determined to take advantage of better global economic con-ditions and increased customer demands,” said Dennis M. Nally, chairman of PricewaterhouseC-oopers International.

“The post-recession global econ-omy is recovering on two-tiers. Emerging economies like China, India and Brazil are growing at rates that far surpass the devel-oped nations. The shift in the eco-nomic balance of power creates challenges for CEOs in deciding how and where to invest in facili-ties, people and innovation. Com-panies that understand and capi-talise on the diverging growth patterns of the developed and emerging economies will be the winners in the years ahead,” he added.

The positive momentum in CEO confidence was reflected in hir-ing plans; more than half (51%) of CEOs worldwide said they ex-pected to add jobs in the next 12 months, up from 39% in the last survey. CEOs in Central Europe, Asia Pacific and Africa were par-ticularly bullish about hiring. Sig-nificantly, just 16% of CEOs said they expected to cut their work-force in the coming year, down from 25% last year.

The impact of the recession on strategy was also evident in the survey results. Most CEOs – 84% – said they had changed their com-pany’s strategy in the past two years, and about a third said the change was fundamental. Stra-tegic changes were driven pri-marily by economic uncertainty, customer requirements, and the post-recession dynamics in their industry. Most CEOs said they plan to change their strategies for managing talent (83%), risk (77%), investments (76%), and or-ganisational structure (74%).

Fewer CEOs, 64%, said they planned to cut costs in the next 12 months, down from about 70% last year. And 34% said they would complete a merger or ac-quisition, half expect to form a new strategic alliance or joint venture, and 31% said they would outsource a business function. Western Europe, Asia and North America were the most popular venues for M&A.

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February 2011 FEATURE

Last year it seemed as if many of SBR Consulting’s clients were fo-cusing on building relationships within their existing customers and finding ways to add value. Since the start of 2011, we have already been having a number of conversations with clients and prospects about their strategy to embark on new business, or to be more accurate, “new, new busi-ness” (rather than “new, existing business”). This article will look at how achievable this is and at a few ways to ensure it happens.

Let’s first look at whether this is an approach you should take. Based on SBR Consulting’s experiences, the following figures are pretty realistic.

If we assume you are selling ex-

isting products with strong case studies and track record, the split is likely to be: selling to current customers, 70%; selling to past customers, 40%; and selling to new customers, 20%.

If you are selling new products in each of these groups optimistic figures would be: selling to cur-rent customers, 60%; selling to past customers, 30%; and selling to new customers, 10%.

Based on these projections, it is no wonder that most consultants shy away from selling to new cus-tomers. When you add the real-ity that first projects with new customers are often significantly smaller in size than some of the more established programmes, plus the additional effort needed

to understand the particular nu-ances of the new client, you can see why it really does take a lot of motivation and commitment to succeed.

However, the cold, hard facts are that for a consultancy to grow, part of your strategy needs to fo-cus on “new, new business”. This is because these will eventually become the big projects, the ex-isting business, that takes over from the inevitable, natural loss of other accounts which have run their course.

If you are going to make this part of your culture, take a look at the senior management team and how they perceive their individu-al roles in bringing new business into the firm. This is where it starts

by LARS TEWES

Selling in the Consulting World –

Building a business development culture is easier than you think Lars Tewes, Managing Director of sales performance con-sultancy SBR Consulting, asks if creating a business devel-opment culture in your firm is a quantum leap in terms of cultural change or are you closer than you think?

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Consulting TimesFEATURE

to get interesting and occasional-ly a little uncomfortable – if lead-ers do not change their picture about what it takes to win busi-ness.

Let me explain. For many direc-tors and senior managers, busi-ness development feels like a quantum leap, and something that others excel at. They there-fore feel that it is not possible to achieve, especially since they are still so busy “working in the business” delivering and running projects.

What if we realised that it is not a quantum leap but something that many of us are pretty good at? It is just that we have not formed the right habits around doing the little things that most

successful business developers do naturally. These are:

• Maintaining contact with people they used to work with at past employers

• Maintaining contact with cli-ents they used to work with

• Maintaining contact with cli-ents you are now at other companies

• Being interested in what is happening to others

• Attend association meetings / conferences

• At networking events arrive a bit early and stay a little later so you can talk with others

• Have lunch with people and be interested in them instead of your blackberry / iPhone

• Always follow-up with people

• Listen for opportunities wher-ever you go – they are all around you if you are willing to hear them.

None of these is hard to do once they become a habit. The hard part is to make them a habit in the first place. I can cite numer-ous examples over just the past 12 months where directors and senior managers we work with have made very slight changes to their habits, such as eating lunch a couple of times a week with a colleague, client or someone they do not know well but work close-ly to; rReconnecting by phone (not email) with a couple of old contacts each week; attending one association meeting or con-ference a month.

The results have been staggering. One client moving from public

to private sector has won pro-grammes in three of the major banks; another in the marketing consulting arena has opened up four global names not previously worked with; and another has won new initiatives in the telco space – the list goes on.

We are not seeing huge quantum leap style changes, but what we are seeing is real commitment to business development activities that add up to something signifi-cant. Five directors each commu-nicating with one to two of their past contacts each week (this can be done sitting in your car using your hands-free in a traffic jam), equates to 25-50 a month, 300-600 connections a year. If 10% of those lead to possible opportu-nities and based on the 1:5 ratio seen above, you would have 12 new clients.

We call this “the slight edge phi-losophy”. Change that lasts rare-ly happens in one big bang; it is normally the result of lots of small things linked to each other that create momentum. Jeff Ol-sen wrote about a good example of this in 2005 in his book, “The Slight Edge”: it showed that a 0.003% improvement in some-thing every day for a one year period leads to a 100% improve-ment, in two years to a 200% improvement, in three years to a 400% improvement, in four years to an 800% improvement.

So creating a business develop-ment culture is closer than you think. The firms that realise suc-cessful business development is often about 100% commitment to and execution of small but sig-nificant changes in behaviour at a senior level, will see the growth in revenue they deserve. As Aristo-tle said: “We are what we repeat-edly do. Excellence, then, is not an act, but a habit.”

www.top-consultant.com22

February 2011 NEWS

With 2011 shaping up to be an-other tough year, the question on everyone’s lips is where is the growth going to come from that will rebalance both the books and the economy?

For founder and director of Market Gravity, Gideon Hyde, the answer is clear – reawakening the thirst for corporate entrepreneurialism that lies dormant in our large or-ganisations. Promoting this idea has led to the production of a “business novel”, Defying Grav-ity: the adventures of a corporate entrepreneur, as well as the spon-sorship of the UK’s first awards for corporate entrepreneurship last year. The awards had the effect of flushing out corporate entre-preneurs from a number of or-ganisations, including Transport for London which carried off the award for the successful launch of Barclays Cycle Hire, otherwise known as the “Boris bikes”.

“We thought we’d try to hold a mirror up to the industry and in-vite them to come forward so we could recognise their achieve-ment in developing and deliver-

ing growth in their industries,” ex-plains Hyde. “After the awards we could clearly see that the things we were doing were tapping into something real.”

Hyde is very clear that the “agen-da is growth” – Market Gravity isn’t an ideas shop or an innova-tion factory. Innovation within companies comes in a number of forms – some are known for it culturally, others take a more be-hind-the-scenes approach, some systematise it and still others are more “let a thousand flowers bloom”.

By focusing on entrepreneurial-ism, the firm felt it was better placed to help good ideas to be-come reality. One example was working with British Gas over its micro-generation offering:

“That wasn’t innovative per se, but it needed an entrepreneurial approach,” says Hyde. “It wasn’t a breakthrough piece of thinking but it was difficult to do, difficult to organise how to get the kit into people’s homes and to make money out of it.”

Hyde sees the combination of creativity and delivery as the key to facilitating entrepreneurship:

“It’s the ability to go from a blank piece of paper to the early stages of a business,” he says. This will of-ten include staying on in the busi-ness post-launch in an interim role: “There’s nothing like actually delivering a business plan to help you realise the pitfalls.”

By taking an overview of the en-tire lifecycle, Hyde believes he can help organisations overcome some of the bottlenecks and pit-falls involved in setting up corpo-rate ventures.

“The challenge is how to bring out the organisation’s collective knowledge and insight – not just those people who happen to be in the room,” he says. “You need to start with a broad spectrum of ideas and opportunities, so that you’re confident that you’ve done everything you can to iden-tify potential ideas. Then you drill down to a dozen big opportuni-ties to focus on, and then look at what you can do near term.”

Can corporate entrepreneurship be a new source of growth? Mick James talks to founder and director of Market Gravity, Gideon Hyde, who thinks cor-porate entrepreneurship is the perfect way for organisations to map their growth poten-tial.

by MICK JAMES

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Consulting TimesFEATURE

“The challenge is how to bring out the organisa-tion’s collective knowledge and insight – not just those people who happen to be in the room,” says Gideon Hyde, founder and director of Market Gravity.

This process should lead to one or two “super business cases”, each of which can be pursued in the confidence that they are the best of all the opportunities on offer. Where most companies fail is that they start off with too nar-row a range of initial ideas and go straight to launch, or they fail to qualify the ideas and get bogged down in a cycle of endless pilot schemes.

“The idea is that after working with us you will have a growth pipeline that is completely vali-dated and based on informed data, not guesswork,” says Hyde. “We can’t guarantee success but we can take away a lot of the risk without undermining the oppor-tunity.”

By taking this step-by-step ap-proach, the journey looks a lot less like climbing a sheer rock face – with lots of opportunities to fall off.

“If you go along that journey, not only is the risk lowered but it al-lows you to get to places which are inherently beneficial to the organisation even if you don’t proceed any further.”

In the book Hyde talks about “venture death” and the “naysay-ers and assassins” who can derail the corporate entrepreneur:

“The biggest hurdle to growth in an organisation is cultural; it’s not a lack of desire or a lack of clever people,” he says. “Often the parent organisation wants to impose its own governance structures onto the new venture, but a venture is inherently more risky – there are different expectations, different performance measures, a differ-ent need for flexibility.”

This means that managing cor-porate entrepreneurship requires

strong leadership as well as emo-tional intelligence:

“You need people who will go to bat for the venture and you need to handle egos and also be very politically savvy,” says Hyde. “When you pick the core team, you are looking for people who are not just motivated by money, you want to pick the people who are a little bit frustrated, who want to create something new they can put on their CV and be proud of.”

For its part Market Gravity is also looking for people to fuel its growth, which Hyde says has re-cently gone “gangbusters” with the final quarter in 2010 outpac-ing the rest of the year. Currently basking in a market presence that belies its size, the company hopes to move from 10 full-time consul-tants to 20 or 25 by the end of the year.

“What we like are people who’ve either got a consultancy back-ground or do big, interesting things in industry as programme managers, who’ve seen projects through from start to finish, so they know what it’s about,” says Hyde. “The most important thing is attitude; we’re not looking for eggheads but for people who can work with people on a day to day level.”

So is 2011 the year for corporate entrepreneurship to really take off?

“There’s only so much efficiency you can eke out of an organisa-tion,” says Hyde. “The FTSE 100 companies have made some sav-ings but they can’t cut any more people and they can’t keep on finding more savings. The way we approach it is to look at the mar-ket as a whole and identify the growth potential for their busi-ness.”

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