Howard was a consultant with Gemini Consulting when that name was used. He is a graduate of the prestigious Wharton MBA program and worked for Gemini Consulting in London, South Africa and New Jersey between 2000 and 2002. He has gratefully agreed to an interview over wine and tapas in Toronto, Ontario’s thriving King West restaurant scene as the temperature hovers near 35 degrees centigrade.
Maybe explain the names Gemini Consulting, Capgemini and CGEY since these are going to be confusing to many?
Gemini consulting was formed in the early 1990’s through the merger of United Research and the MAC group in the USA. The MAC group was staffed with brilliant MBA strategy types while United Research focused on implementing solutions at the operating level. They were equally brilliant at what they did and invented many clever techniques like brown paper mapping and so on. Several other acquisitions followed, including, I think, Bossard in France to form Cap Gemini Sogeti’s, the French IT companies, management consulting arm.
Sometime in the latter 1990’s Cap Gemini Sogeti acquired Ernst & Young’s healthcare consulting business in the USA, and Cap Gemini Sogeti was renamed Cap Gemini Ernst & Young. At around the same time, leadership disputes between the consulting and IT business, and a decline in consulting revenues led to CGEY renaming Gemini Consulting, simply CGEY. So the Gemini Consulting name disappeared, although not quite. Most of the people remained, although CGEY did not advertise its consulting division as explicitly as it did before. Moreover, and this is something not many people know, even those in the French head-office, is that the Gemini Consulting name was still alive and maintained, up until today!
Some offices, particularly South Africa, and I think Argentina, Mexico and Russia, never had IT practices but just management consulting offices, and they kept the Gemini Consulting name since they saw no reason to change the brand. So when CGEY became Capgemini in about 2005, these offices continued to be called Gemini Consulting. They are still called Gemini Consulting and Capgemini is aware of this and helps them support the logos.
Tell me a bit about the Gemini Consulting culture back at its peak and the Capgemini culture today?
I read your earlier article about Capgemini and although I agree with your points, I think that it only applies across the business. Within the Capgemini firm, there are divisions which are truly stellar and the criticism does not completely apply. When I worked at Gemini Consulting, it was at the front-end of the push into management consulting. In the USA, for sure, there was a feeling that the one firm which could take on McKinsey had failed at its chance.
At Capgemini, we had a slogan called “People Matter. Results Count.” I think it is still the slogan? That was our mantra and we lived it every day. People would come into the office and believe they were doing important work. There was this spirit of greatness.
Yet, that message never seemed to reach London, and especially Johannesburg. The people in London, and Johannesburg, truly believed they were better than McKinsey. And they were. There was a real and genuine pride. Not like what you see today at many, many firms where many people are proud to work at one firm but secretly pine for BCG or McKinsey. When I worked there, we truly believed we were better. We went after the most complex and challenging strategy projects and we won. Hands down. We attracted outstanding people and did great work.
We had a slogan called “People Matter. Results Count.” I think it is still the slogan? That was our mantra and we lived it every day. People would come into the office and believe they were doing important work. There was this spirit of greatness.
You have to remember that back in the 1990′s, Gemini was such a hot name that people even wrote books about Gemini Consulting. That’s how great it was. Younger MBA’s forget this. I recall one book called Consulting Demons which is definitely worth reading and highlighted the adventures of one particularly interesting Cap partner.
I believe it is still like that in parts of the business where the Gemini Consulting philosophy lives on in spirit and name. Particularly in telecoms, financial services and pharmaceuticals. The bottom line is that the culture was competitive, supportive and encouraging. I enjoyed going to the office every day and working with these truly amazing people; a Cambridge physics Ph.D., a doctoral chemical engineer, LSE economist…just amazing.
As I said before, many parts of Capgemini still have these pockets of greatness. You just have to look beyond the IT advertising.
Before I ask about the pockets of greatness, why do you think people see Capgemini as purely an IT shop?
There are two reasons. Capgemini has a very strong and powerful IT heritage and that is played up. The entire executive team comes from this background. When Gemini Consulting was merged into Capgemini, the firm stopped deliberately advertising its management consulting arm. So it was always there, but just never advertised.
And let me add that the management consultants where not just a bunch of IT technicians trying to sell consulting.
They were world-class, and are still world-class. Even today, Capgemini has one of the most formidable collections of management consulting tools, training material, intellectual property and guides. There were world experts on everything, writing books, presentations, research reports and more. The pure management consulting intellectual property sitting in Capgemini, even today, is mind-blowing. People should understand this. It is just a question of finding it, since the information management system, at least when I was there, was terrible at locating good material. You had to know people. Even when I tell Cap people who are employed there today about some of the material and whom to ask about it, they seem a little surprised and more so when they find the material!
And the pockets of excellence?
I can talk about my South African and London experiences?
Is South Africa really relevant to our global readers?
Yes – especially when I tell you about the work done. I will talk about some engagements before I joined, while I was there and after I left. And remember, these were international teams tackling issues which just happened to be in South Africa. I liked the work since the weather was good and food cheap.
I clearly recall us beating McKinsey and Bain to win one of the largest petrochemicals strategy projects ever awarded in that year. In fact, in that year, it was a $10M engagement, and South Africa’s largest management consulting engagement. A petrochemical company was about to lose its government subsidies and wanted our help to find new sources of revenue. A team of 30 consultants worked on this for over 11 months, eventually positioning the client to become one of the top emerging markets companies worldwide. I think the consultants won a citation from the client for the work.
I am going to stress that these were pure strategy projects; not process redesign or operations projects branded as strategy, but the highest level of strategy management consulting.
In another engagement, mid 2000’s, we again beat McKinsey, Bain, BCG, Accenture and Monitor to undertake the largest electricity sector strategy project of the year and one of the largest worldwide. We were basically creating a new business model and vision for one of the world’s 10 largest electricity companies. If I recall correctly, we had about 18 consultants from around the world, working on this project, and it was a tremendous success with the story appearing in the newspaper and so on. However, like true consultants we stayed out of the press and refused to comment.
Just recently, and I think this was in the press; we worked on a massive turnaround strategy for a multi-billion dollar mobile telecommunications company. 15 consultants from around the world worked on this project which generated well over $6m in strategy fees.
I am going to stress that these were pure strategy projects; not process redesign or operations projects branded as strategy, but the highest level of strategy management consulting.
Which was your most memorable project and why?
This was a project in a country I cannot name! We were brought in to turnaround a struggling agriculture business. Think of Archer Daniel Midlands and owning their own retail stores. This was our first multi-million dollar strategy engagement in the pure agriculture sector and about 25 consultants were working on this over 12 months. We were just working on the strategy. I enjoyed this project because it was management consulting at its best. We had no previous knowledge about the sector and had to work from first-principles and hypotheses to understand the issues, construct the analyses and do the analyses.
The storage facilities were in the middle of nowhere and on one scorching day, a bit like this, we could not get a rental car with an air-conditioner. Worse, we could only get a Toyota hatch-back and were trying to fit in 5 consultants! The culture of Capgemini comes through in this moment. Despite the heat and squeezed fit, I enjoyed the day with these great guys. We travelled to 3 locations, collected our data and managed to run the analyses which proved to the client they were over-paying on certain equipment.
Like all great consulting projects, many of the people on this team, although young, went on to great careers in consulting and corporate. That hot day, and project stands out in my memory.
Why should aspiring management consultants apply to Capgemini; given that it is now shrinking out of existence?
I think they must first go and read about the work we are doing. The website has some nice links but the strategy stuff is best. Then I think they need to go to the general consulting site and look at all the great work done. They should read some of the examples of work, and also read some of the thought leadership. It is truly impressive.
Once they have looked at this, they then need to ask themselves why they would not want to join a firm doing such great work for such great clients.
Granted, strategy is not as large as it used to be, but it is not dead. It exists throughout the organization and excellent, landmark projects are still done.
How is consulting structured?
This may have changed since I was there, but until 2007 it was like this. It may also have been different where management consulting was not a separate business. I know the titles were:
Consultant
Senior Consultant
Managing Consultant
Principal
Managing Director
Graduates entered as consultants and MBA graduates entered as senior consultants. But I am pretty sure this has now changed. I left as a managing consultant.
Do you feel Capgemini will ever return to its glory days of management consulting?
There are definitely moves afoot to rebuild the consulting brand. I want to make a distinction here. The work is not dead. Just the brand needs more visibility.
But I think certainly in the US and UK, things are happening. And of course South Africa still has the last remaining pure strategy consulting outpost of about, and I may be wrong here, 60 consultants working on high-end strategy.
Do you have any memorable sound-bites for the readers or fast facts about Capgemini or the consulting business in particular?
Only for the consulting business and some of my information is dated, although certainly accurate around 2008-2010:
• ~ 90% client retention.
• It is the only consulting practice which separated operations, strategy and implementation. Everyone else confuses implementation and operations. I see your blog also makes this distinction.
• Consulting continues to grow rapidly.
• It is about a $1B dollar business. Yes, that large.
• Projects are being done all over the world.
Anything you forgot to add?
Yes – do not read horrible online reviews like Vault and Glassdoor for reviews about Capgemini consulting. They are terrible and have a love affair with the McKinsey et al. If you really want to understand Capgemini’ s consulting business, then pick up the phone and find someone in the consulting business at a senior level. The junior people only see the rebuilding of the consulting business and do not recall what existed before. The senior people remember what was, and know what will be.
We have a reputation for tough questions. I have to ask at least one. Ready?
You’re paying for dinner, go ahead.
The work in South Africa is certainly impressive. Yet the annual report of Capgemini does not list the South Africa office, even when you state they have about 70 people and do all this great work?
The South African office is owned by the local partners who manage the office and license the Gemini Consulting brand. Besides profit sharing, they operate like any other office; except they do not any IT work.
Added to this, I only gave you the South African examples since I knew them well. I could have easily provided examples from the UK, US, France, Botswana, Dubai and Japan. In fact, I know that one the most significant banking strategy projects in the UK in 1997 was done by Gemini Consulting. There are just so many other examples. Cap also did much of the consulting work for the French military and French government. In that regard they are similar to Booz and the US government.
Why did you leave Cap?
I was getting older and felt that I needed to make the transition soon to leave enough time to build a corporate career. The travelling was also just too much. Strategy engagements are also too stressful. All those things came together to support the transition.
In the mid 1990s Gemini Consulting was a darling of the industry. It was posting explosive revenue and margin growth, hiring the best and brightest from the Ivy Leagues, winning some of the largest management consulting engagements and producing some of the most jaw-dropping and exquisite strategic analyses. The merger of the MAC Group (Strategists) with United Research (Operations Specialists) gave Gemini a massive boost in the sector. Many believed that Gemini had what it took to displace McKinsey. Yet by 1999 Gemini had lost is fizzle and was a mere shadow of itself. By 2001 it was on a clear downward curve and today you would be hard pressed to find any proof that this once mighty firm existed. The ruins of Rome seem to have been preserved better.
The reasons why Gemini Consulting failed 10 years ago still afflict the Capgemini consulting practice today.
1 – Gemini was, is and may always be fad driven. Gemini was built on the transformation fad. The concept of going into a company and conducting an exhaustive and wide-ranging top to bottom analyses followed by a complete overhaul of the business. Hence the word transformation. The fad was borne out of the re-engineering craze made famous by Michael Hammer.
Gemini Consulting became too closely associated with this fad and when the fad lost its luster, Gemini was tarnished with the same brush. There were other reasons why this failed. How many companies want to go through a root-canal type transformation? Not many. If they do choose to do this, how often do you think they want to do it? Not often. Do you think employees want to work with the consulting firm which caused all the pain with questionable results? It’s unlikely.
2 – Besides Gemini’s affinity for the transformation concept, which they seem to market less today but if you look carefully it is still woven through their literature, they have fundamentally flawed approach to consulting. Gemini’s model is built on the concept of selling a short, high-impact and usually lower priced business case/strategic assessment of the business. They will send in a case team to do a McKinsey style analyses over 8 to 10 weeks. This team goes a mile wide and an inch deep to develop a business case for changing the client. Their aim is to convince the client to bring in Gemini for the implementation.
Clearly they need to sell the implementation to recoup the lower fees on the analyses. How can this be impartial advice up front?
There are some inherent problems with this approach. For one, Gemini is conflicted. Clearly they need to sell the implementation to recoup the lower fees on the analyses. How can this be impartial advice up front? The quality on these analyses is not uniform. Some of these business case teams are very good and do excellent work. Others do really poor work and are just trying to secure the implementation. Contrast this with a McKinsey, BCG or Bain team who views the strategic assessment as a separate study. They are willing to give an impartial assessment since they are not dependent on the fees from the next stage. Impartiality is critical to the client.
3 – Gemini Consulting does not seem to be interested in building a proper management consulting business. When times are good and the economy is doing well, they pump money into the consulting business. When times are bad, they not only cull staff, they shut down entire divisions and offices, and ultimately lose key people. There is a fundamental problem here. If they lose key people and are willing to do this, then it means Gemini believes consulting can be easily built by simply hiring a few good people when the times are good again. So where is the continuity, where are the people who keep up the meaning of the brand and culture?
4 – 90% of Capgemini is a technology shop. They are after all a massive technology outfit. In their larger offices, the technology employees form the bulk of employees. In fact, the technology staff can strangle management consulting projects. If EDF (a massive French utility), for example, wants the strategy group to check the payment systems, the technology group can easily say “no” since an unpopular strategy recommendation could potentially jeopardize larger and lucrative technology projects. Firms like Deloitte and Accenture are riddled with this problem.
An unexpected outcome of this is that remnants of the strategy capability have survived in some weird places. Places where the corporate office and the technology team are weak or non-existent. These are usually in the far-flung offices like Buenos Aires, Argentina and Johannesburg, South Africa. These offices license the Capgemini brand, are smaller, were originally set up for strategy work and have no technology presence. They are islands fighting alone to do strategy work. So when they present their credentials as a part of the Capgemini group, it means very little. Their skills, depth and experience are only as deep as that of their local office.
5 – Gemini consultants don’t have uniform pride and don’t really believe they are as good as McKinsey, Bain or the BCG. If they don’t feel they are as good it does show through in their work, culture and advice. A colleague with a PhD in Computer Science from Caltech and a MBA from Wharton relayed the following story to us. He interviewed at Capgemini’s London office last year and the interviewer asked him “why does someone with your background and qualifications want to work at Gemini Consulting? Wouldn’t you prefer McKinsey?”. You would think that at least the London office believed in themselves.
Capgemini is a technology shop, brands itself this way and promotes people who nurture this core.
6 – Capgemini is a technology shop, brands itself this way and promotes people who nurture this core. The management consultants have limited opportunities to run the business. Investments which do not support the technology base are curtailed. Back in the day when Gemini Consulting was still a powerhouse, the US management consulting partners provided a counterweight to this. They set up a separate head office in Morristown and made the necessary investments in the consulting business. That is now over.
7 – Since when does a management consulting firm license its brand? A management consulting brand should not be a MacDonald’s line where every project can be run off a production line. Image and quality is so important in management consulting that any firm even thinking about licensing its name does not understand the sector. Capgemini continues to do this and charges a rather steep licensing fee of about $1m per an office per annum in using its name and having access to its databases and qualifications.
8 – If you are going to license your name, you would think Gemini Consulting would insist on certain standards and controls. You would expect regular interaction between the licensees and head office. This does not happen.
Since when does a management consulting firm license its brand? A management consulting brand, like Gemini Consulting, should not be a MacDonald’s line where every project can be run off a production line.
9 – Capgemini alienated the US management consulting partners and never built them as a succession line into the business. Proper management consulting firms must be international in all respects. Capgemini is French and wants to be French. It sees that as its strength.
10 – Capgemini never exploited it’s rather central place in Europe. It has built no real presence in Eastern Europe. A market which is exploded for management consulting services. Roland Berger has done the opposite and has built an enviable presence and track record in the former Soviet Union. In fact, only McKinsey has a better presence and track record.
11 – Capgemini is not a training ground for executives. That is after all the true long-term test of a management consulting firm. How many executives today, in France or the Fortune 500 can you find who earned their stripes at Capgemini?
12 – Capgemini really was on the right path. All those resources, intellectual property and knowledge are just lying in the firm and are dormant. If the company cannot leverage its own capabilities, how can it advise clients?
13 – Awfully poor knowledge management. This is the lifeblood of management consulting. Having the right knowledge and bringing it to the right problem at the right time. Capgemini’s knowledge exchange is IT dominated and most of the management consulting material is never uploaded. Offices don’t share and each creates its own silo of information. All of this flies counter to proper management consulting values.