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Archstone’s Early Milestones
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March/April2007
Consulting
Andersen shuttersits offices under acloud of scandalDownturn inconsulting servicespurchases causesoverall consultingmarket to shrinkfor the first timeon recordDeloitte rejectsthe profession’spopular wisdomand nixes a planto split offconsultingFirm isestablished withthree principals;Todd Lavieriserves as CEOand presidentLake Capitalinvests $75million in firmknown asCandlewoodConsultingNewlynamedArchstoneConsultinggrows to 39employeesOpens offices:Chicago, New York,Stamford
In the past, such murky episodes of introspec-tion have come sandwiched between waves of client opportunities — none lasting perhaps morethan two or three years.Now, five years after the fall of Andersen, con-sulting leaders still persist in defining the currentage by what it lacks rather than by the clientopportunities it yields. It is the age of no
big
ideas, we have routinely been told. However, aswith every other age of consulting, the presentone is arguably best revealed by the clients con-sultants serve.
Listening to Clients
Ric Noreen, senior director of growth channelsfor Kraft, says that the company’s currentapproach to working with consultants calls forKraft executives to be more precise when defin-ing problems up front.“Manufacturers like Kraft are using consul-tants in a much more narrowly defined projectscope, and the firms that can respond to this sortof pinpoint targeting of problem-and-solution arein a great position to continue to bill,” saysNoreen, whose company’s growing appetite fornarrowly scoped projects and more specializedservices appears to be part of a larger trend on thepart of industry, according to research completedby Kennedy Information, of Peterborough, NewHampshire (see chart, p. 20).As narrowly scoped engagements grow as a per-centage of overall consulting spending, corporateclients have more frequently been opening the doorto smaller firms that now compete and win againstlarger firms that sometimes struggle to maintaintheir profit margins on smaller engagements,according to Kennedy Information.“I see far more projects with narrowly definedoutcomes or solutions initiated by Kraft over thelast couple of years than I do the large, multidi-mensional, $2 million dollar engagements,” saysNoreen, who first agreed to be interviewed by
Consulting
Magazine upon hearing that our arti-cle was on a small but growing consulting firmknown as Archstone Consulting. According toNoreen, Archstone is exactly the type of firm thatKraft tends to do business with these days:focused, nimble, and with its seniormost peopleroutinely involved.Elise Klein, a vice president at Berlex Inc.,shares Noreen’s opinion of Archstone and believesthat the firm is extra cautious when it comes toreusing content. “You never get the sense that Arch-stone is recycling material, and if they are, they tellyou,” says Klein.Suzanne Doft, Director/Team Leader of Oncology at Pfizer, believes that Archstone is high-ly attentive to individual client needs.“They listen really well,” explains Doft. “Theylisten and then they understand, and they not onlyunderstand the problem, they also understand ourpeople roles very well so that they are able to adjusttheir content and allow the different disciplines tobe able to digest it.”
Defining the Age
Having captured 13 new clients in January of thisyear alone, Archstone appears to have specializedofferings whose appeal extends well beyond theabove-mentioned clients. Archstone grew by 34percent last year, while capturing $59 million inannual revenue and expanding its client portfolio to150 clients.Not bad for a three-and-half-year-old firm thatwas launched in the midst of a calamitous consult-ing sales downturn. In fact, the year beforeArchstone was launched, the global market for con-sulting services shrank for the first time on record.Certainly, the idea that such a newbie firm hascome to have a hand in defining the latest age of consulting is a notion that is rejected, not surpris-ingly, by larger, more established, consulting firms.
Now watch ArchstonePrincipal
Mark Schmeling
discuss the firm’s CFOservices offerings onThis Week in Consulting at
www.consultingmag.com
.
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