The document discusses how various consulting firms are adapting their strategies amidst the economic challenges of 2009, with insights from IBM, Kurt Salmon Associates, and Slalom Consulting. Each firm outlines their focus on value creation, cash preservation, and flexibility in project management, while also acknowledging the unprecedented nature of the downturn. Overall, the firms emphasize the importance of transformation and strategic planning to navigate the difficult economic landscape.

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Three Firms, Three Plans for Managing the Challenging Economy 1 / 20 / 2009
By Jacqueline Durett
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It’s never easy going into a year hardly anyone has hope for; 2009 has already seen layoffs, more projected
layoffs, lots of scary days on the Dow and unemployment numbers that continually rise.
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Consulting firms, of course, understand the pressure companies are under and have had to balance tough love in
the present with a eye toward a future turnaround. Here are three consultancies’ take on how they will manage—
RANKINGS and even master—one of the roughest projected years in memory.
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Hidden Gems of the Profession IBM’s goal is to help clients take the long view, even if that means some
challenges in the near term. Saul Berman, global leader of IBM’s
» View all
business solutions practice, sums up the firm’s take on the
environment, saying “We think that we’re into a different kind of
INTERVIEWS
downturn and a different kind of world than in the past. We think we’ve
» One on One with Accenture's got unprecedented, at least in our lifetime, constraints on access to
David McCurley
credit and capital. We’ve got falling demand, increased price sensitivity
» Consulting One on One with [and] disruptions in the supply chain. We think it’s a time of
Romil Bahl transformation, restructuring of industries. Firms will fail, some will be
» One on One with OMNI's Frank sold off, some will be spun off.”
Bernhard
» Out of Office: Roz Savage And that means, he says, that the traditional answer isn’t always the
» View all right answer. “[Firms] need to become smarter. We’re living in a world
that’s smaller and flatter with more pervasive connections and
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communications, emerging markets, open trade and it’s like a domino
UPCOMING EVENTS effect—somebody hiccups in one part of the world and the rest of the
world reacts,” Berman says. “And it’s a world where we have smarter
Financial Services Forum: instruments, smarter interconnectivity, smarter intelligence, and we’re saying that people who go into this
Foresight Into Emerging downturn correctly can come out of it more advantaged in the future.”
Consulting Demand - New York -
March 25, 2010 So IBM is telling clients to focus on three things: value, namely doing more with less; eliminating anything not core
to the company’s future; and exploiting opportunities—now. “Because times of disruption and change are times of
Consulting Firm Leadership
market share shift. And we think that some of our clients are going to be very successful at capturing share,
Roundtable 2010 - Chicago - May
4, 2010 disrupting their weaker competitors, taking advantage of them, making acquisitions. And we see them building
future capabilities,” Berman says. “We see it as a time to protect and acquire talent, develop the required assets
Consulting Summit - Adapting to and technologies and skill sets for the future and time to reshape the industry. It’s a time for bold moves and to
Market Realities - May 5, 2010 position yourself globally.” He also says that managing change is vital to staying strong in this challenging
» View all economy.
Clients, he says, respond to this advice in a variety of ways. And it largely comes from their position in the
marketplace. “Some of them are worried about where the next dollar is going to come from, some of them are
worried about why their stock price is so undervalued. Some of them are saying well I’ve got those problems, but
I’ve got cash, so now’s the time to be opportunistic.”
IBM, Berman says, is currently is seeing two primary types of engagements—transformative projects and shorter,
more crisis-focused engagements, and he doesn’t see that trend changing any time soon. But while Berman isn’t
a fatalist—“I don’t view it as the Great Depression”—he says much of what the firm is seeing is unprecedented.
“We weren’t in recent history dealing with major cost capital questions; clients always want to reduce their
overhead. But nobody was saying I need to reduce it by the order and magnitude now that clients are starting to
realize they may have.”
And when will the economy turn around?
“The sooner the better!” Berman says.
Kurt Salmon Associates: No Relief for Retailers
Cash is king, says Jerry Black, CEO of Kurt Salmon Associates.
“This [recession] is so different. [Companies are] trying to preserve cash,” Black says. A huge part of KSA’s
business is in retail, a sector extremely affected by this economy. “This [recession] is hugely driven by liquidity, so
you see clients trying to get out of leases. Some of them are deferring maintenance by two, three, four months—
simple things like painting parking lots or upgrading flooring and doors, those kinds of things. In the past, they
weren’t so much worried about capital because … it didn’t have a huge impact on P&L, but this one is so much
about liquidity and preserving cash as well as the P&L.”
The industries leaders Black has spoken with also are very concerned about retention in this economy. “Part of
that is driven by bonus programs [that] are shot to hell for the current year; the stock market is down so far that
things like equity retention programs … employees don’t place a whole lot value on [them]. So there are a lot of
questions about how we make sure we come out of this having retained high potential, high performing
employees.”
Retailers, he says, are among the first to have seen the recession coming, which is demonstrated by inventory
orders last spring. “Retailers were anticipating a relatively poor fall because of the impact of high energy costs and
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gas prices, so I think they were relatively conservative on the inventory planning. I don’t think anyone expected
the liquidity crisis to get as bad as it is, but I think there was a lot of anticipation high fuel costs, I think there was a
lot of anticipation that we were headed for a recession.”
So what are retailers doing to survive—and what is KSA doing to help them? “I think, knock on wood, projects
that have been in motion are still in motion,” Black says, adding he’s advising retailers to focus on creating value
for the customer and doing things differently on the back end, such as being flexible on order shipments, in order
to keep costs down for the customer. “We have seen people not very much interested in interesting projects or
point solutions. They are very much interested in trying to continue transformational projects, cross functional
things that will have an impact on their strategic positioning, their supply chain. So [there’s a] focus on quick
payback, ROI type things, as well as transformational projects.”
And that means other plans get shifted to the back burner. “Generally speaking, the lower the project is positioned
in the organization the harder it is [to do] because what happens is direction comes down from the top to eliminate
all non-discretionary spending, so unless it’s very strategic, transformational type project—which, we’re fortunate
because we’re doing a lot of those—it’s probably at risk.”
So what are those top priority projects? Brand overhaul efforts, changes that optimize speed to market and
process improvement initiatives top the list. Many retailers are also looking at creating or expanding a private label
as an additional revenue stream.
Retailers will continue to be challenged this year by real estate leases that may not reflect the current value of
their space, and with consumers’ lack of disposable incomes—and, at the opposite end of the spectrum,
consumers who have the income, but not the will to shop. “Rich people are actually spending less because there’s
a little bit of a guilt factor,” he says.
Black also says he’s also concerned about a prolonged time of stagflation, but thinks a serious period of it is
unlikely. “I think we’re taking our medicine. We’re doing a lot of write-offs. I think this is likely to be a deep
recession, but not a 15-year stagflation-type thing,” he says, adding, “I’m not an economist.”
Slalom Consulting: No Real Drop-off Yet … Really
Slalom Consulting is like that student who always ruins the grading curve for everyone else. But that’s great news
for this local-model business and technology consulting firm, which is headquartered in Seattle.
“We’re not really carrying a bench right now, and we’re pretty much full out. Things are pretty good,” says Alex
Qatsha, general manager of Slalom’s Atlanta office. And the numbers support that—the Atlanta office at one
point in 2008 hit a 99 percent utilization rate, and the firm has an average of 93.4 percent. “We could fall 10
percent and still hit our mark,” Qatsha says of Atlanta’s efforts.
Tiago Dias, business intelligence practice lead at the firm’s San Francisco office, attributes the firm’s model to its
success and ability to consistently gain market share. “We have very seasoned and experienced consultants who
we bring to the table. Our local business model basically means that no one travels. And that allows us to
basically pass on those savings to clients,” Dias says. And that’s good for the firm in a time where every line item
is questioned. “[Clients] scrutinize a little bit more who they bring on board. They look at the rates more closely as
well. And so very often they find that we provide a very compelling offer,” he adds.
And Slalom is certainly a firm in the minority in another sense—it’s actively recruiting and hiring. “There’s certainly
a lot more talent on the market. From a recruitment perspective, it’s definitely a good time for us,” Dias says.
Qatsha agrees, adding that the firm is not only looking for consultants, but hires to fill leadership roles as well.
So is Slalom simply immune to 2009’s dour forecast? Not completely.
Qatsha says that many of his clients are former consultants themselves, so instead of cancelling a project, they’ll
scale down the manpower needed. “So when I talk to them I hear a lot, for example, ‘Alex, I know what we’re
trying to do and I know where you can help us. I don’t need a six-person team to come in here. I need one or two
smart people with this type of experience to come help us.’” And Slalom would rather send one or two consultants
than none at all. “So what we’re finding is we can be flexible with them to how they want to work and that’s why I
believe we keep winning in the marketplace even through this kind of depressed time right now. Because we can
move with them and allow them to buy how they want to buy.”
Qatsha also says he’s seeing more postponements than all-out cancellations. “A larger deal might be slowed
down where it was going to start this month, now they’re asking can we work with them and start it sometime next
month. But we are also talking to them about some work and they wanted to start [soon] and we just get a phone
call that says, ‘Hey look, we’d love to work with you, but right now is not going to work, we’re going to revisit in
Q2.” But those calls aren’t happening every day, he says, adding, “I would say it’s the exception, really.
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