Profile - Making space for people

No job has been too small, or too large for Arthur D Little: from putting widgets into beer cans for Bass, devising business strategy for a whole host of firms, to developing instruments for the Apollo experiments on the moon.

The firm’s success and growth is inextricably linked with its diverse technological inventions. Over the last 112 years, ADL has been a pioneer in promoting the use of science within business. It has advised conglomerates on the application of science to business since 1886.

Founded by the then 23-year-old Arthur Dehon Little and another chemist Roger Griffin, the firm’s first interest was in promoting technology and changing internal processes.

Within Griffin & Little the vision was that new technology could improve organisations’ competitive edge, and improve both processes within firms, and their products. Big business increasingly incorporated new scientific discoveries into everyday routine, so that today technology and business are intrinsically linked.

Science and business synergy within ADL started with the papermaking and motion picture industries. In 1893 the firm helped to transform papermaking from an art to a technology, with its publication of The Chemistry of Papermaking. The latter became a standard reference for the papermaking industry. In 1900 ADL developed the first acetate fibre, and also the first non-flammable motion picture film. Both were patented to ADL, but the rights for the motion picture film were sold to Eastman Kodak.

With only 22 people, and based mainly in the New England area, the firm incorporated in 1909, and announced its vision for the future: the application of technology to industrial growth.

The firm had a finger in every pie and its inventions ranged from: trying to achieve the impossible, such as making a silk purse out of a bucket of sows’ ears in 1921 (its attempt is still on display at the Smithsonian Institute) to developing the Kleinschmidt system for converting sea water into fresh water at the lowest fuel consumption in 1938.

Some of ADL’s most well-known, leading edge inventions are in pharmaceuticals and chemistry. It produced the first synthetic penicillin process, and it was at the forefront of cancer chemotherapy research. In 1996, uniting the western and eastern world, it produced a unique contraception system, approved by both the Catholic and Muslim churches. In October 1997, the firm, in conjunction with Plug Power and the US Energy Department’s Los Alamos National Laboratory, developed a gasoline-powered fuel cell that has near-zero exhaust emissions – one fuel cell will power a car for up to 80 miles.

In the last three decades, ADL has increased synergy between its technology section and consultancy.

It has diversified and joined forces with IBM in developing real-time, on-line, computerised, reservation system for firms like American Airlines; it has designed, developed and launched the first fibre optic, interactive cable television systems in Japan; and, helped the British Government to privatise British Rail.

The management consultancy has grown by 30 per cent year on year. Its technology and product practice has grown by 40 per cent. Over the next few years it is projecting growth of 40 per cent. Today in the UK its headcount has increased to 400 consultants; worldwide it has 3,000 staff.

After a spate of acquisitions it aims to expand organically. Over the years it has acquired UK-based Cambridge Consultants, the research and development firm, Opinion Research Corporation, a survey research firm, and Innovation Associates , which focuses on organisational development, change implementation and high performance teams. The latter was co-founded by Charles Kiefer and author of The Fifth Discipline, Dr Peter Senge.

Beside this it works in partnership with the European Institute for Business Administration (INSEAD). In 1964 it set up the Arthur D Little School of Management, devoted to spreading best practice and the training of global leaders.

Since the ’50s it has also set up a range of subsidiaries, including: ADL Enterprises, which focuses on commercialising its inventions; ADL Programme Systems Management to help industries and government organisations to manage complex projects; and ADL Decision Resources, a division devoted to producing subscription information in health care, telecommunications and IT.

As we approach the millennium and based on its latest acquisitions, ADL is remodelling itself. The pace of business change is becoming more and more rapid and in order to deal with the changing demands of its clients the consulting firm has been changing its offering.

Creating unity and congruity within the firm has been a major part of its strategy over the past five years, under the auspices of Charles LaMantia, president and chief executive of the global consulting firm.

“Over the last five years ADL has gained far greater coherence as a company, it is no longer a loose confederation of different groups, interested in a variety of things,” said Peter Scott-Thomas, professor of business management at the Arthur D Little School of Management at Boston College.

The success of its new structure is reflected in its revenues. The early ’90s saw the UK firm making US$45m a year. Worldwide at the end of 1992 it made $367m. Since 1991, its net income has grown by 14 per cent each year. At the end of its financial year 1996, the consulting firm saw worldwide revenues grow by 12 per cent to $574m, up from $514m; 60 per cent of its business today is outside the US.

The coherence that Scott-Thomas talks about is about streamlining its worldwide activities. It has three main practice areas: ADL Management Consulting, ADL Technology and Product Innovation, and ADL Environmental, Health and Safety Consulting – the latter an important part in its offering.

Cambridge Consultants, its technology development arm, which was acquired in 1972, today works hand in hand with the UK management consultancy practice – this template has been adopted by all 52 offices worldwide. While it provides service lines and industry lines, the firm does not want to be considered as being everything to all and sundry, but as a specialist in certain areas – a great change in policy from how it was five to 10 years ago.

But the coherence is not only structural, it is about an overwhelming shift in the firm’s outlook for the millennium: long-term work with clients, with an emphasis on promoting the learning organisation within its walls, as well as outside.

“Just like many other consultancies, we have shifted to longer term relationships with clients. The sorts of challenges clients are facing are more complex, straddling more parts of the business and that requires far broader functional skills,” said Scott-Thomas.

Projects used to be one-offs, but today 80 per cent of the firm’s work is repeat consultancy. Customer-driven thinking has had a direct impact both on the type of consulting work and integration within the firm.

Scott-Thomas says: “When you go from one office to another there is far greater commonality. At directors’ meetings, people feel that they are building off each other’s resources, and that the firm’s direction matches the direction individual offices want to go in.”

He believes that the firm has come a long way from the days when consultancy was born out of the mechanistic and pragmatic aspects of science and business.

There is a huge gulf between the humanistic approach to consultancy training at ADL today, compared to the prescribed how to be a consultant approach of yester-year.

“When I was taught, it was: here is the methodology, that is how you manage an assignment. Now, you are taught to facilitate in a very advanced way; how to make it easier for groups to achieve their objectives, and how to master organisational learning techniques,” he says. “We focus much more on the human aspects of business: we combine the mechanistic aspects with what 20 years ago was very touchy feely stuff.”

He explains that 10 years ago, it would have been unlikely that a chief executive at Barclays Bank would be doing a visioning exercise with an Arthur D Little team. Today, he says, integrated visioning is a matter of course: management, staff and consultants “vision” together.

People issues also come top of organisational change programmes, both externally and internally.

“When you get a lot of people into a room, what is surprising is how some very common threads emerge; from people’s personalised vision you can create much more of a group vision,” says Robert Samuelson, associate director at ADL in the UK. “Visioning together brings out into the open some of the desires people have and makes it far easier to achieve them.”

ADL has changed under the slogan Partners for Growth and the firm’s leadership has been at the forefront of the move to become a learning organisation.

Under the auspices of Stephen Lawrence, UK managing director for the last 19 months, the change programme has made considerable progress.

Since Lawrence was appointed, the firm has reduced the billing rates for directors. But, he says, his focus is not just on being cost-effective, but also helping his staff to do what they really started out doing: consulting.

“Rather than spending time focusing on internal changes, directors can be out working with clients. Directors are specialists in their subject area, so clients are getting much better value,” says Lawrence.

“In consulting there are two things that matter: your clients and your staff. You have happy staff when they are working on exciting projects, helping clients with their problems.”

Lawrence says that problems are dealt with by a series of teams well-versed in problem solving, thus allowing consultants to concentrate on clients. “One of the things I’ve tried to do in terms of leadership is to get everyone to stop and start thinking about their clients. I tell them not to worry about internal affairs, ring the help number and let the team deal with it,” says Lawrence. “Or I say ‘I’ll deal with that – all of you have got a job to do’. I wanted to take the hassle out of the business.”

Four separate teams, whose managers report straight to Lawrence, focus on ironing out the wrinkles in IT, human resources, marketing and administration.

And when the problem proves particularly intractable, Lawrence will sort it out himself.

He is keen on communication among staff. To that end the firm has a meeting of all the consulting staff every month. “I may not be aware of some the things frustrating them,” he says. “We’ve got a very open style of management, so that people often come up and tell me about a problem, and I say ‘how can I help?’. It is important that they have access to somewhere to vent frustrations and highlight opinions and passions.”

Samuelson adds: “In many companies some problems have been too frustrating and too difficult for too long, but here Stephen actually does something about them. It takes a lot of dedication, diligence and hard work to make things happen.”

Teamworking together with clients and other consultants is the essence of ADL’s change programme. And knowledge sharing follows closely behind.

Samuelson believes that investment in its people has been ADL’s key to putting the theory into practice. Ensuring that both staff and clients are aware of what is required of them also plays a part, and to that end the firm has established a new performance measure: corporate citizenship.

“To become a corporate citizen you have to show how you have passed on a good idea to others, rather than sounding off about the idea,” says Samuelson. It means being in a sharing culture; the individual is no longer king.

“We have been helping consultants to recognise that they will not be penalised for bringing other people in. In the past there was a culture where if you did not do the work all yourself, it was not seen as adding value,” says Lawrence. “We’ve got rid of all of that and brought in global goals and objectives.”

The firm has already invested many man-hours in coaching and training to help its consultants understand its new long-term global objectives.

In April this year the firm will be running a product fair in France to give consultants the opportunity to take part in a portfolio of learning activities. The objective – as part of the firm’s commitment to stimulate its people to prompt profits – is to give consultants throughout the firm exposure to the latest thinking and technology. Consultants will be trained on the most recent consultancy concepts.

The fair also offers consultants from all over the world the opportunity to bond with others with whom they may be working in virtual teams in the future.

Graduates make up half of ADL’s intake, MBAs 30 per cent and people from industry 20 per cent. With the number in management consultancy is growing annually by 20 per cent, and in product and technology by just under 10 per cent, ADL is keen to ensure that its people are up to standard and able to perform as teams on increasingly complex global projects.

Feedback from fellow consultants, directors and nowadays also the client, both on the assignments and the individual work of the consultant are key. Face-to-face interviews with clients are now carried out after every project.

“If clients think we have done a good job, then it is likely we will get more work with that client; 80 per cent of our work is repeat work,” says Lawrence.

He sees the consultant as the leaseholder working for the greater good of the firm or the freeholder. Whether the consultant works at the client site, or in a virtual team, all this would not be possible without the firm’s commitment to the sharing of intellectual capital.

“Historically, people thought about what was important to them rather than their clients because they were worried that if they shared their knowledge, they might lose control of their client,” says Lawrence. “Now people are thinking more about sharing knowledge.”

The firm has always focused on knowledge capture, but it was only two years ago when ADL Link, a worldwide knowledge base managed by practice asset managers, was set up to speed up knowledge transfer.

“ADL Link allows much more knowledge sharing, and because it gives consultants the latest best practice across all industries, they can respond rapidly to clients, allowing us to be more competitive,” says Lawrence.

What was true of the firm’s goals at the beginning of the century remains true today. ADL’s aim is still to improve business through technology, but today the emphasis is on people and organisation learning.

The interplay of good communication between knowledge sharing and a new, not quite complete worldwide e-mail system, and the Internet, is part of its move towards practising what it preaches.

“Technological change is one of the key ways to gain competitive advantage, and advising firms about their technology is absolutely fundamental to our strategy,” says Lawrence.

ADL’s learning cycles are based on its own change programmes and its investment in people has produced a dedicated workforce, developing superior products for long-term customers. It has brought increased profit and growth, and higher staff retention.

So while technology has been the force behind its success, the overriding factor in this new culture has been the global behavioural change of its people: the move to team work, knowledge sharing and buying into the process of being a Partner for Growth.