Ted Halverson founded this firm in 1978 on a single conviction: that mid-market companies in America were systematically served by consultants whose business models had been designed for someone else, and that the work the mid-market actually required was not being done well by anyone. Almost fifty years later, the conviction is, if anything, more defensible than it was when Ted first articulated it.
The argument is structural. The largest consulting firms — the firms whose names are most familiar to a Fortune 500 audit committee — operate business models that require a particular cost structure, a particular leverage ratio of partners to junior staff, and a particular kind of engagement to make the economics work. The model is, on its own terms, well-designed. It is well-designed for the engagements it was built to serve, which are large, multi-year, methodology-intensive engagements at companies whose scale supports them.
The mid-market does not, with rare exceptions, generate engagements of that shape. The mid-market generates engagements that require senior judgment, narrow scoping, fast cycle times, and a degree of intimacy with the operating realities of the business that the leveraged model does not naturally produce. The mid-market engagement that succeeds requires the partner to be in the room — not in the kickoff and the closeout, but in the middle, where the work is done. The leveraged model does not put the partner in the room in the middle. The partner is in three other rooms, in three other cities, supervising the engagements that the model requires the partner to supervise to make the economics work.
What the mid-market gets instead
What the mid-market gets, when it engages a consulting firm whose business model was designed for the Fortune 500, is the same engagement run by a consulting team whose seniority and experience are calibrated to the firm's average engagement rather than to the particular engagement at hand. The methodology is the methodology that has worked at the firm's flagship clients. The deliverables are deliverables that have impressed Fortune 500 audit committees. The team is a team of intelligent, hard-working junior consultants supervised at a respectful distance by a partner whose attention is, by the structure of the firm's economics, divided.
The result, often, is competent work that does not meet the engagement's requirements. The methodology is too elaborate for the engagement's actual question. The deliverables are designed for an audience the mid-market company does not have. The team is doing its honest best, and the partner — who is, in nearly every case, a competent and committed person — is doing the best he can with the time the firm's economics permit him to spend on the engagement.
The boutique alternative, and its limits
The mid-market firm that has concluded that the leveraged model is not for it has historically had two alternatives. The first is the freelance senior consultant, often a former partner of one of the larger firms, whose seniority and experience are excellent and whose capacity is meaningfully limited by the structure of his practice. The freelance consultant is excellent for engagements of a particular shape and size. He is not the right answer for the engagement that requires a team, or for the engagement that requires the durability and continuity that an institution provides.
The second is the small operations or strategy boutique, of which there are a meaningful number across the country, many of them excellent within their domains. The boutique is the right answer for many mid-market engagements. It is rarely the right answer for the engagement that crosses domains — the engagement that requires strategy, operations, technology, and organizational work in some combination, sequenced and integrated across the same partner-led team.
What the firm tries to be
The firm Ted built, and that Margaret Reed expanded, was conceived as a third answer. The firm operates with a partner-led structure that is closer to the boutique than to the leveraged firm. It is institutional, with the continuity, the bench, and the cross-domain capability of an institution. The economics are designed to permit the partner to be in the room in the middle of the engagement, not only at the beginning and the end. The engagement scope is set against the question the client is actually trying to answer, not against the methodology that the firm finds it most convenient to deliver.
I do not claim that this model is original to us. I claim that it is uncommon in the segment of the market we serve, and that the mid-market companies who have worked with us, and with the small number of firms in the same tradition, recognize the difference. We were reconstituted in 2016 with the deliberate intention of carrying that tradition into the next generation of the practice. The convictions of the firm are unchanged. The methods have evolved. The discipline — that the right engagement for a mid-market company is the engagement that the mid-market company actually requires — has not.