Best in France Prof. Michael Segalla

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Best in FranceProf. Michael Segalla

• Christy Barlow ? Jean-Louis Brunin
• Nathalie Gorin ? Daniel Pham ? Ahmad Tabbara

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Agenda

• Executive Overview Competition
• In-depth analysis of Roland Berger
• The French Office
• Companys values
• Why come to France?
• Constraints in France
• Building the Brand in France
• Recruitment in France
• Adaptations to the French market
• Takeaways

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Executive Overview Competition
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Executive Overview (1)

• Roland Berger Strategy Consultants
• Established in 1967
• Headquarter in Munich / Germany
• 34 offices worldwide
• Employees 2003 1,700
• Revenue 2003 gt US 625 Million
• Key Competitors
• A.T. Kearney, Bain Company, Boston Consulting
  Group, McKinsey Company

Sources VAULT Guide 2005www.rolandberger.com
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Executive Overview (2)

• Competence Centers

• Industry
• Automotive
• Chemicals Oil
• Consumer Goods Retail
• Engineered Products High Tech
• Financial Services
• InfoCom
• Pharma Medical Devices
• Public Services Heatlh Care
• Transportation
• Utilities

• Functional
• Corporate Strategy Organization
• Information Management
• Marketing Sales
• Operations Strategy
• Restructering Corporate Finance

Sources VAULT Guide 2005
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Executive Overview (3)

• What consultants at other firms are saying
• Becoming stronger and stronger, not only in
  Germany
• Pretentious, provincial
• Deep pockets
• Automotive guys

Sources VAULT Guide 2005
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Competition (1)

• Established in 1926
• Headquarter in Chicago, IL / USA
• 60 offices worldwide
• Office in Paris (Europe) opened in 1967 (1964)
• Employees Paris 2003 190 consultants
• Employees WW 2003 4,000
• Revenue 2003 US 857 Million

Sources VAULT Guide 2005www.atkearney.fr
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Competition (2)

• Established in 1973
• Headquarter in Boston, MA / USA
• 30 offices worldwide
• Office in Paris opened in 1985
• Employees Paris 2003 80 consultants
• Employees WW 2004 2,800
• Revenues Paris/WW 2003 27 M / 761 M
• Voted No. 1 Best workplace in France

Sources VAULT Guide 2005www.bain.fr ,
www.editionsdumanagement.com
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Competition (3)

• Established in 1963
• Headquarter in Boston, MA / USA
• 60 offices worldwide
• Office in Paris opened in 1973
• Employees Paris 200 consultants 100 other
• Employees WW 2003 2,600 consultants
• Revenue WW 2003 US 1,12 Billion

Sources VAULT Guide 2005www.essec.fr
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Competition (4)

• Established in 1926
• Headquarter in New York, NY / USA
• 83 offices worldwide
• Office in Paris opened in 1964
• Employees France 220 consultants
• Employees WW 2003 11,000 consultants
• Revenues Paris/WW 2003 120 M / 3,4 B

Sources VAULT Guide 2005www.mckinsey.com ,
www.editionsdumanagement.com
) Estimated
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In-depth analysis of Roland Berger
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Entry into French Market

• Opened French office in 1992
• Founding Managing Partner Paul Goldschmidt
• Former Bain consultant
• Personal connections to business community
• Entrepreneurial
• 5-6 people from the German Office

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Presence in France Today

• Managing Partner Vincent Mercier
• Former GM at Carrefour
• 140 consultants
• 8 to 12 of worldwide business in France
• RB largest market is Germany with 40 of sales
• Market position 3rd strategic consultancy in
  France after BCG and McKinsey Company
• Strong growth in 2004
• Market growth of approx 6
• 40 growth at Roland Berger France
• Note these estimates do not take into account
  international optimization

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Roland Berger Clients

• French and multinational firms in most sectors
• Significant presence
• Private Equity
• Aerospace
• Industry
• In-country presence in critical
• French clients expect French consultants

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Company Values
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Additional Characteristics

• Other less formalized values consistent across
  the company
• Two characteristics
• Pragmatism
• Commercial focus
• Initially, much of the companys culture derived
  from the personality of Roland Berger

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Why come to France?

• France was considered a natural expansion for
  Roland Berger
• Physical proximity to Germany
• France became 4th country of operation
• After Germany, Italy, Portugal
• Now operating in over 20 countries worldwide

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Constraints in France

• Principle constraints Roland Berger experienced
  coming to France
• Building a reputation
• Initial recruitment

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Building the BrandImportance of Reputation

• Critical for sales

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Building the BrandGerman Roots

• RB brand in Germany built in part on the strength
  of Roland Bergers charismatic personality
• Non-transferable to the French Market
• Initially the firm worked for German clients,
  German office did most of the project sales

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Building the BrandImportance of Networks

• Importance of education and alumni network
  critical in France
• Influence of Grande Ecole
• In other markets consulting firm alumni networks
  are more important than they are in France
• Advantage for RB, since RB network is not as
  strong as competition yet

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Building the Brand

• Build on successes
• Slowly sell to more clients
• Larger Projects
• Use senior advisors
• Ex former CEO of Credit Lyonnais
• Recruit senior people from other consulting firms

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Building the BrandSuccesses

• Currently the vast majority of projects are sold
  by the French office to French firms and
  participation / lead in transnational accounts
  (joint teams with other offices)
• Being asked to write articles, although had
  difficulty being published 4 years ago

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Initial Recruitment

• Initially difficult to compete with other firms
  because relatively unknown name
• 96-98 recruited different profiles than other
  consulting firms
• Many nationalities
• Not always able to focus on Grandes Ecoles
  alumni
• Positioning tended to focus around German roots,
  where reputation was very good
• This has changed as company has grown

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Adaptation to France

• What kinds of adaptations have/are you making to
  your people management systems?
• Recruitment/Selection
• Compensation
• 35-Hour Work Week
• Terminations
• Language
• Cultural Interactions
• Interoffice Work Schedule
• Corporate Communication Policies
• Office Location

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Recruitment Today

• Turnover approximately 8
• Low compared to other consulting firms
• Trends depending on economy
• Currently experiencing high growth
• Target 40 consultants in 2005

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Compensation

• French office pays less than German office
• RB France does not compete for candidates with
  other firms using pay as a primary means
• Attempts to use corporate culture as a draw
• Can be a constraint in recruitment

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35-Hour Work Week

• Has not caused major issues
• Consultants work long hours
• Work Council
• Agreement to give employees 10 additional days of
  vacation in compensation for extra hours of work
  (total vacation increased from 25 to 35 days)
• More holiday in France than in Germany

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Terminations

• Need to adjust costs in 2001 / 2002
• French office terminations 15 of 200
• Layoffs were more difficult in France than in
  Germany
• Approx ½ of cases involved legal action
• Have adjusted policy of terminations
• More friendly now, ex 6-month notice

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Language German vs. French

• 8 years ago was RB corporate policy to only hire
  people who spoke German
• Requirement has been relaxed
• Paul Goldschmidt did not speak German
• RB France hires exclusively French speaking
  consultants
• Critical for competitive advantage proximity
  involvement with clients

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Cultural Interactions

• Client interaction
• Important differences between the German model
  and the French model
• German direct, forceful
• Management interaction
• Differences in decision making between French and
  German
• Inter-office interactions
• Quarterly partner meetings
• Yearly employee meetings in Germany

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Inter-Office Work Schedule

• Use competency centers as internal expert
  advisors for projects
• 60 of French office projects are domestic
• International projects
• Global staffing optimized

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Communications

• RB has not traditionally spend as much money on
  corporate PR as other consultancy firms in France
• Does have impact on recruitment and large
  projects involving many people
• This is changing
• Targeted PR is being introduced, both across
  European based and France specific
• Examples Best in European Business, articles in
  Les Echos
• However, in France companies do not want highly
  visible consultants compared to other countries
• Sponsorship, such as high profile sailing races,
  in which RB participates in Germany, would not be
  effective in France

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Location

• Opened in small office in expensive district (Rue
  Washington)
• Roland Berger asked why not have a large office
  near the airport?
• Not possible in France
• Location and address are key
• All management consultancies have offices in good
  locations (8th, 17th, 1st or 16th)

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Consultant Travel

• German consultants spend a significant portion on
  the road
• 70 80 of French business is done in Paris
• Higher percentage of women in the French office
  compared to other RB offices, but not necessarily
  compared to other French consulting firms

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Takeaways
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Essential Advice

• Need to be unique (especially for smaller
  consultancy firms)
• Have a strong position in one focus area
• Perception counts
• Size and power
• French people in organization
• Senior Positions
• Senior Advisors

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Special Thank
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We Thank

• Sébastien Chanel
• Senior Project Manager
• 11, rue de Prony, 75017 Paris
• 33 1 53 67 03 20
• sebastien_chanel_at_fr.rolandberger.com

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Sébastien Chanel

• ESCP-EAP
• Internship with Roland Berger in Germany in 1996
• Roland Berger France full-time in 1996
• 12 consultants in the office at the time
• Exciting challenge
• Two leaves from RB
• Civil Service Controller at Schnider Electric
  (sp?) in Austria
• High tech start up in 1999
• Currently employee with most seniority in Paris
  office
• Senior Manager in charge of recruiting

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Bibliography
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Bibliography

• References
• Marcy Lerner, Vault Guide to the Top 50
  Management and Strategy Consulting Firms 2005
• www.rolandberger.com
• www.bain.fr
• www.mckinsey.com
• www.atkearney.fr
• www.editionsdumanagement.com
• www.essec.fr

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Back-up Stuff
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Progression

• Progression is slower today than in the past
• Example Junior consultant
• 1996 14- 16 months
• 1999 9 months
• 2005 2 years

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Culture Shift

• Initially entrepreneurial
• Need to become more structural