| To be more successful, businesses should manage | | | | These were people who usually had Executive Vice |
| more strategically. There is at least one business that | | | | President titles, or sometimes Vice Chairman titles, |
| took its own advice and did just that, with | | | | and who had full profit and loss responsibility for |
| outstanding results. This brief article discusses the | | | | retail, corporate, capital markets, and other major |
| early steps in that business's strategic management | | | | businesses. Other firms were focused on the heads |
| process, and provides a good example of how | | | | of technology, the Board of Directors, or at lower |
| strategic management can dramatically improve a | | | | levels across the organization. Other firms did not |
| business's performance. | | | | identify strongly with the executives who had |
| During the years from 1993 to 2001, KPMG's financial | | | | day-to-day responsibility for the P&L, and who |
| services consulting practice (FSC) in the United States | | | | were also the chief visionaries for their businesses in |
| grew at an unprecedented rate. Revenue for the | | | | the market. |
| practice grew during that period at a compound | | | | FSC's market strategy appealed to line of business |
| annual growth rate of just over 40%. Outside the | | | | heads, and they controlled significant consulting |
| US, this high rate of growth began a couple of years | | | | budgets. The market strategy demanded in depth |
| later than in the US, but once started the results | | | | knowledge of the business. Functional knowledge was |
| were similar. From a starting point of less than $100 | | | | also important, but only within the context of the |
| million in 1993, in 2001, after several years of | | | | business knowledge. Most of the time, the issues |
| significant growth, global revenue for FSC exceeded | | | | faced by line of business heads could not be |
| $1.2 billion. | | | | segmented into functional components. It was |
| There were many factors that contributed to this | | | | necessary to blend various functional skills, such as |
| extraordinary growth. The purpose of this article is to | | | | strategy, risk, finance, operations, and technology, |
| discuss one of them, the market strategy that was | | | | into project teams, all with deep business knowledge. |
| defined for the practice. A strong case can be made | | | | Buying Factors |
| that market strategy was the most important factor | | | | The line of business heads, who were FSC's natural |
| in the success of the practice, but regardless, it did | | | | clients, had two buying factors that could not be |
| at least represent the first step in moving the | | | | compromised when selecting consulting firms: |
| practice forward. | | | | - There could be no learning of the business on the |
| Market Strategy | | | | job. FSC not only embraced this buying factor, but |
| The market strategy that was selected for FSC was | | | | tried to take it a step further. The goal was to |
| "business management". That market strategy | | | | assign professionals to projects that knew the |
| proved to be an excellent choice for FSC, for a | | | | business better than client personnel ever could. |
| couple of major reasons: | | | | Therefore, best practices in the industry were |
| - The "business management" strategy clearly | | | | introduced to clients in the normal course of |
| differentiated FSC from competitors. At the time, | | | | consulting projects. |
| firms in the market that were consulting to financial | | | | - Consulting expenditures had to have bottom line |
| services organizations could be categorized into three | | | | payback. Once understood, this buying factor |
| major types. There were systems integration and | | | | became a benefit to FSC. The heads of business lines |
| managed services firms that approached the market | | | | were much more inclined to spend money on |
| with their functional skills and large pools of resources. | | | | consulting projects when there was a quantified |
| There were general strategy firms that approached | | | | known payback. FSC had the knowledge and |
| the market with their consulting process and | | | | confidence to make commitments when necessary |
| corporate level reputations. There were also dozens | | | | on paybacks. |
| of niche firms that approached the market with their | | | | * * * * * * |
| knowledge and experience in a limited array of | | | | FSC enjoyed unprecedented growth during the |
| services. No firms in the market offered services | | | | 1990's. One of the major factors contributing to that |
| where depth of business knowledge was a | | | | growth was FSC's market strategy of "business |
| requirement. FSC chose that path, and quickly | | | | management". The market strategy appealed to the |
| became differentiated in the marketplace. | | | | internal heads of lines of business, who became FSC's |
| - The "business management" strategy built on FSC's | | | | natural clients. These natural clients had requirements |
| core strengths. Traditionally, FSC hired consultants | | | | for selecting consulting firms that demanded deep |
| with at least three years of industry experience. This | | | | business knowledge and payback on consulting |
| hands-on business experience became a good | | | | expenditures. The market strategy proved to be |
| starting point for developing even more depth of | | | | effective for FSC. |
| business knowledge and understanding of best | | | | Taking the first step along the strategic management |
| practices across an industry. | | | | pathway required a tremendous amount of |
| Natural Client | | | | information gathering, analysis, insights, and hard |
| The natural clients for FSC's "business management" | | | | work, but in the end, the results were worth the |
| strategy were the heads of the internal lines of | | | | effort. FSC would not have been as successful during |
| business at the large financial services organizations. | | | | that period without, first, thinking strategically. |