Listening to CEO’s and other senior leaders talk about building businesses is always a privilege. Last week I did this at the ” X Site conference” in Boston (designed to recognize the high-tech revival in Boston) and again at the 50 th Anniversary gathering of 1,000 past and current partners of my former employer, the Boston Consulting Group ( BCG ).
At the X Site conference, I was struck by the talks given by Miguel de Icaza, a serial CTO currently at Xamarin, and Wayne Chang, a serial founder, most recently of CrashLytics. Xamarin brings the well-loved C# development environment to iOS and Android. Their website reports 12,000 customers, 67 employees, and $12 million raised from good investors. CrashLytics provides developers with detailed state-at-moment-of-failure analysis of mobile apps, a key tool for making apps reliable. It accepted a very attractive inbound offer from Twitter.
” BCG has evolved to become a Top-tier General Management Consulting company “.
It’s an amazing growth story : in the last 25 years BCG increased its revenue ~80x (19% compound annual growth rate) with increasing profitability. This was driven by a steadily deepening value proposition and global expansion. Twenty-five years ago there were~4,000 U.S. public companies similar in size to BCG.
Only FOUR, have performed as well or better, one of which is ” Apple”.
We heard the FIVE, living BCG CEOs speak sequentially about the challenge they faced and how they managed. It was a unique opportunity to learn about leadership and the development of a company, and of course I lived that history until 2000.
This rather diverse group of leaders (consulting and software) spoke in remarkably similar terms…
Each emphasized, what I will call FOUR Pillars of Leadership :
1. Strategic Vision With Adaptation – Each speaker’s strategic vision centered on the customer value proposition. de Icaza spoke about bringing the proven appeal of C# to mobile developers, and nurturing the customer experience. Chang emphasized that crash analysis is a huge pain point for developers: CrashLytics had tremendous inbound interest before it began marketing. Several entrepreneurs talked about knowing when it’s time to pivot. They urged “asking the killer questions” (the questions about what will kill the company’s strategy) early and often.
BCG faced a strategic crisis in the 1980s when its original “strategy boutique” value prop ran out of steam (just as I became a partner). The CEO at the time, Alan Zakon, called the pivot. His successors implemented and reinforced it in different ways. Each of them was able to boil down their strategy to a simple phrase, like “make it happen” or “go north”. It’s remarkable how well that worked.
2. Strategic Values – They are the things that a company holds to be most important. For Xamarin it is “delighting developers”. For CrashLytics it’s “building for tweets”: a user emotional experience so good that customers tweet about it. They put a big investment into a one-click install, and a nifty automation when a case is closed that shows a trouble ticket getting smacked by a big red “closed” stamp. For BCG it is “Insight + Results”: neither alone is sufficient, the two together are very powerful. Many companies forget their past leaders; that fact that BCG brought its former CEOs and partners back to participate in the 50th anniversary celebration speaks to the continuity of its values.
Values need to be aligned with strategy, but they are much more constant. BCG’s strategic values have not changed since 1980, when the big pivot began, but the vision has evolved quite a bit with different market states, phases of change, and leadership styles. Strategic values smooth out the rough road of management and give people a beacon to follow.
3. Investment In Talent – It’s an axiom of the software industry that a great programmer is worth more than 3 or 5 average programmers. I’ve heard that “rock star” programmers in Sil Valley have agents now. Google, Facebook., etc. go to extraordinary lengths to hire and retain the best people.
Likewise BCG was founded on the belief that bright, motivated young people can create breakthroughs. It made waves early on by “overpaying” for the best talent, so much so that the Harvard Business School objected strenuously, (However, I once observed to an HBS dean that the BCG starting salary, if expressed as months of HBS tuition that it would pay, had been declining for many years).
In later years aggressive hiring was backed by big investments in training and coaching. A consulting firm, and probably a software firm too, can be no better than its people.
4. Disciplined & Relentless Execution – In the software business this is sprints, all-nighters, rigorous quality control, A/B testing, and top flight customer service.
For BCG it’s people development, resource allocation, driving through to measurable results, moving to the most valuable part of the market, and global, cross-functional teamwork.
BCG has raised its execution game in the last 20 years, as its continuous growth, even during the global financial crisis, attests. People are the theoretical limit of a firm’s performance, and execution determines how close to that limit it performs.
Those of us who were with BCG in the early years were astonished by what the firm has accomplished. Back at work now, I came away from last week with renewed faith in the potency of great leadership.