Jeremy Asher says that PA Consulting’s 1990s turnaround could serve as “a case study in managing shareholder value.” And although he’s still a relatively new boy, Asher is proud of the consultancy’s recent achievement and sees huge potential for a successful global future. Since 1992 PA has climbed out from its cash-starved hole and now sits happily on a cash pile of over £100m. “What we have done is this,” says Asher. “We have understood our business processes, understood what it is that creates value for our clients and therefore for our shareholders, and for our employees – then we have set up systems that enable our people to create that value to the maximum possible, and that reward them for doing so. That’s what managing shareholder value is all about.” The success of the strategy was proven when PA announced its 1998 annual results, with revenues up over 20 percent to £277m and profits after tax up 47 percent to £24.1m. Asher himself only joined the firm in 1998, after PA was well back on track. Nevertheless, he says the change of ownership structure, which played a key part in returning PA to financial health, excites him the most about the firm. Jon Moynihan, PA’s executive chairman, who prior to Asher’s arrival also filled the CEO post, drove that change. It wasn’t easy and during the process, in the autumn of 1997, Moynihan actually tendered his resignation when frustrated by discussions with then majority shareholder, the Butten Trust. However, the difficulties were overcome and Moynihan stayed on to modify the trust structure and make sure staff at all levels have a stake in the firm’s success through share ownership and performance-linked participation in the firm’s global bonus pool. “Although the change in ownership predates me, it’s been absolutely pivotal in the development of the firm,” says Asher. “It’s had huge benefits. Since we restructured our bonus system and our ownership structure, we have unleashed a huge amount of capability.” To be successful, each consultant has to “go the extra mile” for clients, Asher believes. As a result, clients are impressed and call the firm back for more complex and valuable assignments. If the consultants see a share of the benefit to the firm, in the form of a bonus, they are happy to go the extra mile again. “We are creating a virtuous circle,” says Asher. “If you break that virtuous circle it’s easy to go into decline, so keeping it going is really important.” Apart from pleasing existing consultants, the bonus and ownership structure has made the firm more attractive to potential recruits. “That’s helpful because we need more to bring people into the company at all levels,” says Asher. Last year PA recruited over 760 staff worldwide. The firm has high aspirations. “Our ambition is to become one of the handful of genuinely global players in the consultancy business,” says Asher, whose primary focus has been on building PA’s global capability. This has seen regional practices replaced by global practices structured along industry and service lines. Regional development committees gather together key members of different practices within a geographical area to ensure that activities such as marketing are coordinated. However, the line structure is entirely global. “If we have a project to resource in any part of the world the practice will look for the people who are best for it, anywhere in the world,” says Asher. “Everyone in the practice has an interest in seeing the best solution to the resourcing.” That interest is triggered by the global bonus pools the firm has established. Fostering this global thinking also requires partners to get to know each other and senior consultants to exchange information globally. “We have quite a strong reliance on tele-conferencing,” says Asher. “And we have a strong e-mail culture here. People are constantly asking questions of each other. We also have, through our corporate intranet, a growing library of information that’s constantly accessible to anybody anywhere in the world. It’s our nervous system.” Asher’s eagerness to develop the firm’s global approach stems in part from his view of the future of the consulting marketplace, where firms will have to respond to global clients. “Even our regional clients expect to be dealing with consultants who are familiar with global best practice,” he says. “The quality level clients expect is continually rising as they get more sophisticated. This is an inevitable and positive process, but it is going to make life more and more difficult for regional and mid-sized players which have difficulty raising their quality level.” PA is looking for expansion in certain key areas. “We have offices in some 20 countries and we view ourselves as a global player, but we still have a strong centre of gravity in Europe,” says Asher. “That’s one of the things we are most aggressively trying to change over the coming years.” Growth in the US and the Pacific are particular priorities, but the firm isn’t about to throw away a cultural character that has developed over almost 60 years from its British foundations. “The character of the organisation reflects its British roots, and its roots in a consultancy that was strongly orientated towards getting the most out of people,” says Asher. “PA traditionally had its roots in the scientific management ethos of the pre-war years. But one of the things about (PA founder Ernest) Butten that set him apart from the scientific management world, and one of the things that originally was special about PA, was that he had a much stronger belief in the importance of people management and the potential of people, whereas the traditional scientific management approach was somewhat dehumanising.” That attitude has stayed with the firm, Asher believes. “Even as PA matured in the 1960s and blossomed in the 1970s, there has always been that core belief in the importance of people.” In addition, the firm has also stressed the importance of, as Asher puts it, showing results, not just filing reports. “The core of the company’s character is a strong commercial instinct led from this focus on results. Secondly it has a technological sophistication which is a product of all the effort the company has put into technology since the mid-1970s. And thirdly, we have a collaborative and flexible working style with clients.” Asher believes PA’s combination of a strong management consulting business, ranging from strategy to performance improvement to human resources and IT, together with its strong systems development capability and technology base, sets it apart from other firms. Investment in technology has increased since PA got its cash situation back in order, and this is one aspect of the firm that greatly excites Asher. “In 1998 and 1999 we have been flowing money into a variety of ventures, particularly ventures that take advantage of the intellectual property we have been developing on our technology side,” he says. “In the past we would have tended to leave these on the shelf because we didn’t have the resources to do anything with them.” Last year PA launched a new subsidiary, UbiNetics, which is developing new products for the wireless communications market. These include a slimline GSM PC card, which provides laptop and palmtop users with a wireless data and voice recognition facility. UbiNetics is run at arms length from the consultancy. “It’s been very helpful to our technology consultancy because people see us as being at the forefront of technology,” Asher says. PA is also interested in the life sciences and is investing $10m over 18 months in Physiome Sciences, a company that has developed a virtual model of the human heart. In a new joint project PA and Physiome are now designing a computer model of the body’s immune system for use in pharmaceutical and biomedical research. “It’s exciting in its own right,” says Asher. “but also, by getting involved, we keep ourselves at the forefront of thinking in terms of how clinical trials might be structured in future. This is important in terms of our consultancy practice in the pharmaceuticals industry.” Another subsidiary, Strategic Systems Simulation, is developing project management applications based on system dynamics. Looking ahead, Asher sees the drive to make the firm’s global structure deliver its potential as his main challenge. He also names the need for “continuously raising our game in terms of quality, which is very difficult when you have achieved success in the past”. To remain successful the firm has to avoid becoming complacent, Asher says. He aims to do that firstly by providing a continuous challenge to everyone in the organisation to do their best. “Secondly, we have a specific programme of thought leadership,” he says, pointing out that making the most of the firm’s brain power can keep the firm focused on development. “Thirdly, there is training,” says Asher. “We need to make sure all that thought leadership we generate and everything we learn, we feed back to our people through management systems, and through training and development.’ Asher says he and Moynihan work well together. “We have a difference in personal styles, but we also have quite a lot in common, particularly in terms of our basic values and in terms of what we see is needed for the business,” Asher says. “We have complementary roles. Jon looks after the company’s financial investments and has primary responsibility for the ventures and for the kind of governance issues that are a chairman’s normal preserve. I look after the market-facing side of the consultancy business.” Before being tempted to join PA, Asher spent twelve years in the oil business and he admits he hadn’t expected to return to the consulting life. However, he claims to enjoy consultancy. “It’s rewarding and great fun,” he says. “The best thing is the intellectual stimulation, which is continuous, and the pleasure of working with clients, but if you don’t enjoy those things, you will find the lifestyle too demanding.” However, Asher doesn’t consider the lifestyle to be an “issue” for the profession; rather it’s characteristic of it. “You have to be ready to go that extra mile,” he says. “If that isn’t something core to your being, you will find the sacrifices difficult.” Asher is a staunch supporter of consultancy. Commenting on its sometimes unflattering reputation in the wake of Channel 4’s documentary, he says: “Unfortunately the consultants’ lot is often to see little credit for what we do.” He clearly thinks this unfair. “Consultants really do add value to their clients,” he says. “Most of our business is repeat business. They call us back because we deliver results, not reports. The benefits are disproportionate to the fees we charge. In our experience we see benefits to clients of five, ten or 50 times the fees. Clients seem to like those ratios.” Sarah Perrin is a freelance journalist. CURRICULUM VITAE Jeremy Asher, age 41 Career in industry 1997 Joined PA Consulting as group chief executive 1989-1997 Acquired Beta Refinery, a former Mobil refinery in Germany. Recommissioned and expanded the facility as a member of its supervisory board. 1985-1989 Co-head of Global Oil Products at Glencore AG 1980-1984 Consultant with Strategic Planning Associates, now Mercer Management Consulting, in Washington DC and London Further qualifications: Harvard MBA.