Page 418 - Operations Strategy

Case study
4 Clever Consulting

Michael lewis

The Clever Consulting Company (CCC) was first established when four business school
finance faculties decided to ‘… try and do it for real … and also make a lot more money!’. The
firm was not entirely independent. The idea was created with the support of their uni-
versity’s business development scheme, whereby for an equity stake and some super-
visory influence, the university provided the opportunity, continued association with
the university name and some basic facilities.
The original operation comprised the four partners, four consultants (all recent MBA
graduates who had been taught by the academics), three analysts (recent first degree
graduates from the university) and one person providing administrative and secretarial
support. At the start of the venture, none of the partners were firmly established as the
leader; they were all first among equals.
‘During the first 18 months everything went incredibly smoothly … the initial proposition
was to leverage our academic credibility and functional expertise in order to give us a niche
position and the market responded. We began with one big bank as a client, but very quickly
we undertook two or three smallish projects for other clients who, without exception, came
back to us with larger and longer projects. No one minded putting in the hours … which
frankly were often crazy … I guess that in those early days commitment and creativity drove
growth.’

(Managing Partner)
By the end of the second full year of trading, however, it became clear that the
firm’s flat managerial structure was unsustainable, especially in their dealings with
the university parent and other equity holders. Although the firm continued to grow
organically, one November the firm entered into a prolonged period of leadership cri-
sis. Eventually, one of the partners was firmly established as the Managing Partner but
it was not a smooth transition. For nearly a year there was personal and professional
conflict within the firm, making it difficult for the firm to address strategic growth and
corresponding structural issues. Evidence for the impact of this crisis on CCC’s busi-
ness can be seen in the annual revenue figures. The years immediately before the crisis
saw growth of 55 per cent and 66 per cent, whereas during this difficult period, growth
fell to 17 per cent. Whilst apparently respectable, this was considerably less than their
growth target and at the same time a number of operational initiatives floundered.
Recruitment, training and promotions became difficult and plans to develop a Web-
based infrastructure for capturing project knowledge were postponed indefinitely. The
crisis of leadership was only partially resolved when, in the following April, two of the
founding partners returned to full-time academia in different institutions. A year later
the third founding partner retired.
During the last two financial years, CCC’s revenues have grown by an impressive 93
per cent and 113 per cent, arguably a demonstration of the benefits of clear managerial
direction. Unfortunately, this level of growth has simply served to reinforce many of

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