Mercer Management Consulting 2003 (Vault Employer Profile)

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EMPLOY PROFILE VAULT EMPLOYER PROFILE:

MERCER MANAGEMENT CONSULTING

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EMPLOY PROFILE VAULT EMPLOYER PROFILE:

MERCER MANAGEMENT CONSULTING

BY THE STAFF OF VAULT

© 2002 Vault Inc.

Copyright © 2002 by Vault Inc. All rights reserved. All information in this book is subject to change without notice. Vault makes no claims as to the accuracy and reliability of the information contained within and disclaims all warranties. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, for any purpose, without the express written permission of Vault Inc. Vault, the Vault logo, and “the insider career networkTM” are trademarks of Vault Inc. For information about permission to reproduce selections from this book, contact Vault Inc., 150 W22nd Street, New York, New York 10011, (212) 366–4212. Library of Congress CIP Data is available. ISBN 1–58131–235–0 Printed in the United States of America

Mercer Management Consulting

INTRODUCTION

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Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 Mercer Management Consulting at a glance . . . . . . . . . . . . . . . . . . . . . .2

THE SCOOP

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History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

ORGANIZATION

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Chairmen profiles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 Key officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10

VAULT NEWSWIRE

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OUR SURVEY SAYS

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GETTING HIRED

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To apply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 Hiring process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19 Questions to expect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21 Questions to ask . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23

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ON THE JOB

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A Day in the Life . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25 Job descriptions/Career path . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26 Summer program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 Feedback/Career reviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28 Mentoring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29 Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30

FINAL ANALYSIS

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RECOMMENDED READING

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Mercer Management Consulting

Introduction New York’s Mercer Management Consulting may be a subsidiary of professional services titan Marsh & McLennan Companies and only one part of the Mercer Consulting Group, but over the last 10 years it has made quite a name for itself. Formed in 1990 by the merger of Temple, Barker & Sloane and Strategic Planning Associates, Mercer has grown rapidly, opening offices in Europe, the Pacific Rim and Latin America and acquiring a number of boutique consultancies, including Corporate Decisions, Inc. (CDI), Germany’s Dr. Seebauer & Partner GmbH, Mexico’s Analisis y Desarollo de Proyectos and Switzerland’s St. Gallen Consulting Group. Today, Mercer Management Consulting has approximately 1,200 consultants and support personnel in 22 offices worldwide. And while the weak economy forced the closure of Mercer’s Zurich and Washington offices in 2001, the firm laid off only 77 employees, and it continues to bring on new hires (though fewer than the firm did before 2000.)

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Mercer Management at a glance Employees: 1,200 (2002) Net income: FY2001: $2.2 billion (for all Mercer Consulting operations)

UPPERS • Strong sense of camaraderie • Programs allowing consultants to work on outside projects

PRACTICE AREAS

DOWNERS

Functional practices Business Design Innovation Customer Science Value Nets and Supply Chains

• Recent cost-cutting measures • Supportive but “unforgiving” culture

THE BUZZ

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

INDUSTRY PRACTICES Communications, Information, and Entertainment Energy, Life Sciences and Core Industries Financial Institutions and Risk Enterprise Manufacturing Private Equity Retail, Consumer and Healthcare Travel and Transportation

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• • • • • • • •

“The slowly but surely rising star” “Unclear focus” “Hotshots” “Generic” “Old economy” “Smart and hard working” “Want to be McKinsey” “Fun people”

© 2002 Vault Inc.

Mercer Management Consulting

The Scoop The young one Professional services giant Marsh & McLennan has been in business since 1871. It entered the consulting business in 1959 when it acquired William Mercer Limited, a benefits and human resource consulting firm. As Marsh & McLennan hit the $2 billion revenue mark in the economic boom of 1987, it acquired the consulting firm Temple, Barker & Sloan, thus expanding its consulting services to include management strategy consulting. Marsh & McLennan expanded its consulting firm collection in 1990, scooping up Strategic Planning Associates. In 1992, the two consulting firms were merged and dubbed Mercer Management Consulting. Mercer casts its net over a wide variety of industries, but the firm has developed special industry expertise in chemicals and pharmaceuticals, communications, computing, consumer goods, financial services, media and entertainment, manufacturing, oil and gas, retail, transportation, and utilities. In addition, Mercer has a rapidly growing Internet strategy practice. In 1997 Mercer merged with strategy consultancy Corporate Decisions, Inc. (CDI). Both companies were among the first in the business to focus their consulting practices on the link between profitable growth and shareholder value creation. It was CDI work, in fact, that undergirded Adrian Slywotsky’s “value migration” theory (a much-vaunted Mercerian theory). Other prominent CDI concepts include “value-driven business design,” which helps clients identify and exploit growth opportunities, and “customer value growth,” which focuses on clients’ pricing and branding strategies. Mercer is a practice-driven firm, with six major areas: financial services, retail, transportation, life sciences and utilities, private equity and general (“for people who couldn’t make up their minds,” opines one Mercerite). On the other hand, we hear that the firm’s focus tends to shift between strict disciplinary barriers to geographically focused cooperation, in which several practices will come together on a local project.

Part of the whole Mercer Management Consulting, though the most prominent, part is still only one part of the Mercer Consulting Group, itself a subsidiary of Marsh & McLennan Companies. MCG companies, which together employ more than 15,000 people, include Mercer HR Consulting (formerly William M. Mercer), Mercer Delta Organizational Consulting, Lipincott & Margulies Identity and Visit the Vault Consulting Career Channel at http://consulting.vault.com — with insider firm profiles, message boards, the Vault Consulting Job Board and more.

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Mercer Management Consulting The Scoop

Brand Strategy Consulting and NERA Economic Consulting. Though each is a separate entity, the six firms share a number of resources and can often be found cooperating on projects. MMC also often works with other Marsh & McLennan companies, such as MMC Capital, a private equity fund with more than $2.3 billion in holdings. Traditionally, the firms have operated independently of each other, but insiders report that MCG is moving toward greater integration. Cooperation among group firms is encouraged, at least at the senior level, and MCG is exploring ways to leverage the firms’ different areas of focus behind MMC’s efforts. Nevertheless, respondents tell Vault that there is still a heavy amount of cultural difference among the MCG firms, something that may impede the search for synergy in the near future. “You see a little bit more [cooperation] on the senior level, with our partners talking to their partners,” says one MMC consultant. “But will you see lower level people working together in the next few years? I don’t know.”

Bumps in the road Mercer has done well for itself over the last decade, but like many consulting firms, Mercer’s attempt to situate itself at the forefront of high-tech and international markets left it exposed to the dot-com implosion and the subsequent economic downturn. Marsh & McLennan reported that its 2001 management consulting revenue was down 21 percent from the previous year. In November 2001 Mercer closed its Geneva and Washington offices, displacing 77 employees. Partners were given the choice to relocate, while rank-and-file employees were given severance packages. The economy has affected recruiting as well. While before 2001 Mercer hired about 30 to 45 MBA interns and 25 to 30 summer analysts each year, in 2001 the firm canceled its internship program and deferred all full time first-year hires to March 2002. The internship program resumed in 2002.

Intelligent consulting When it was founded, Mercer was considered a brazen startup in a field dominated by giant, established outfits like McKinsey, Bain and Booz Allen Hamilton. But the firm expanded its practice quickly by aggressively pursuing clients and rooting its work in a series of well-publicized books, including The Profit Zone, Value Migration and Profit Patterns. These books advocate a customer-focused approach to a company’s competitive advantages, a philosophy that apparently has rung true with many business leaders. 4

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Mercer Management Consulting The Scoop

Indeed, one of Mercer’s greatest strengths lies in its intellectual capital – intellectual capital cultivated by Mercer strategy guru Adrian Slywotzky. A Mercer vice president, Slywotzky is credited with coining the term “value growth” in his 1996 book, Value Migration and with spearheading the development of a more outwardly focused approach to competitive strategy. Slywotsky’s most recent book, published by Warner Books in September 2002, is The Art of Profitability, and Warner has already contracted him to write another. In October 1999, Industry Week named Slywotzky one of the most influential people in management, along with business world luminaries like management theorist Peter Drucker and Microsoft founder Bill Gates. Books written by Mercer consultants both contribute to and reinforce the firm’s outstanding reputation in the industry. According to the firm, the four most popular and acclaimed books are: Profit Patterns: 30 Ways to Anticipate and Profit from Strategic Forces Reshaping Your Business is the newest hit from Mercer. By Adrian J. Slywotzky and four Mercer vice presidents and colleagues. Grow to Be Great: Breaking the Downsizing Cycle by Dwight L. Gertz and Joao Baptista Mercer VP Baptista and Gertz (who has since left the firm) rate nearly 400 companies that have demonstrated “sustained and profitable growth.” By way of data analysis, the authors challenge the longstanding paradigm that workforce reductions, abandoned subsidiaries and downsized operating units are the means to cost reduction and profitable earnings. After condemning previous work-worn strategies, the authors posit new strategies for growth as the route to business success. These strategies include the development of new products and services and the maintenance of core customers. To make their case, the authors list examples of “growth champions” such as Starbucks, Staples and USAA. All told, more than 1,000 companies are evaluated. Value Migration: How to Think Several Moves Ahead of the Competition by Adrian J. Slywotzky Value Migration identifies a dramatic shift in the consulting scene. More specifically, it delineates the way young and ferocious companies take on established corporate giants. How are these young contenders getting what they want? Savvy and successful business designs rather than new products and technologies. Slywotzky examines companies such as Microsoft, Nucor and Starbucks. He follows the route of his value migration concept through various business designs and ultimately Visit the Vault Consulting Career Channel at http://consulting.vault.com — with insider firm profiles, message boards, the Vault Consulting Job Board and more.

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Mercer Management Consulting The Scoop

identifies seven value migration patterns. The author also reveals a stepby-step method for identifying company perks and failings and reveals strategic tools for discovering patterns of shifting value. The Profit Zone: How Strategic Business Design Will Lead You to Tomorrow’s Profits by Adrian J. Slywotzky and David J. Morrison The Profit Zone explains how business types can redesign their companies in order to access the hidden profit zones in their industries, and the book tells the stories of 12 executives who did exactly that. The authors then examine 11 profit models and explain why conventional thinking about profit leads many companies down dead-end roads. Slywotzky and Morrison zero in on customer profitability profiles, attempts to lower asset intensity and costs at the margins of businesses. Included in this examination of business victory and failure are tales of Kmart, A&P, USAir, WordPerfect, Coke and GE. Having undergone multiple printings, The Profit Zone has appeared on bestseller rankings in BusinessWeek and The New York Times business hardcover lists.

And the ink still flows... Even putting its best-selling books aside, Mercer is known as a prolific producer of printed matter. The Mercer Management Journal, for example, contains articles written by Mercer consultants and is widely read throughout the business and consulting worlds. The Journal is published twice a year and is mailed to business school libraries, as well as to more than 25,000 top business executives in Europe, Asia and the Americas. Specialty periodicals, covering such topics as the transportation industry and supply chain management, are published on an “occasional basis” and targeted toward “managers in particular industries, geographical areas, or corporate functions,” according to the firm. Mercer’s more popular articles may be found on its web site.

Taking on the high-tech world In February 2000, Mercer and one of its sister companies, MMC Capital, jointly formed a venture capital fund, MMC Capital Communications and Information. Capitalized in part by Mercer professionals, the fund today invests in telecom and computing sector technologies and draws on Mercer consultants for due diligence, research and other services related to its investment practices. The fund currently holds stakes in CCC Network Systems, Equator Technologies, GlobeRanger, Southampton Photonics,

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Mercer Management Consulting The Scoop

Verance, Xanoptix and Xelus. In April 2000, Mercer formed a consulting practice to help private equity firms identify new business opportunities. Also that year, the firm announced a collaboration with IBM to incubate and build new e-businesses.

Other engagements The firm stayed active during 2001, providing strategy advice for the December merger of Hawaiian Airlines and Aloha Airgroup into Aloha Holdings, Inc. (Hawaii-based Mercer consultants have continued to work on the project in 2002.) And in January 2002, Mercer advised Sinotrans, a large China-based shipping company, in a reorganization in preparation for a listing on the Hong Kong stock exchange. It also completed an exhaustive study of the success of transatlantic mergers and acquisitions, and advised a major automaker on branding strategies.

Evolving practices, inside and out The firm has also developed what is known as the CCG (Core Consulting Group), which comprises all non-partner employees. Drawn from the CCG is a leadership council made up of representatives from each office. “This council is made up of one or two representatives per office,” divulges an analyst. “CCG exists so that we [non-partner employees] can voice our opinions, create committees, and get things done. For instance, I work in ‘Knowledge Management’ – or how to distribute and make people aware of [the firm’s] intellectual capital. [As an analyst] you are very much involved. It’s not like everything comes down from the top.”

Serious personal time In the fall of 1999, Mercer announced the 10/11 Month Year, a program that allows consultants to take one or two months off each year (without pay) to pursue projects outside the firm. Consultants can also take advantage of an externship program that allows them to work for six to 12 months at selected firm clients or other corporate, venture capital, startup or non-profit organizations at 40 percent of their salaries.

Developing the core Mercer prepares its consultants with several platforms of professional training, which include orientation, toolkit, case simulation, experienced consultants and senior associate training. Consultants in the CCG are Visit the Vault Consulting Career Channel at http://consulting.vault.com — with insider firm profiles, message boards, the Vault Consulting Job Board and more.

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Mercer Management Consulting The Scoop

required to attend occasional weeklong programs to sharpen their consulting skills and to network with colleagues from other offices. Mercer also has a generous tuition sponsorship program for employees interested in going to business school, though they must commit to returning to Mercer upon completion of their MBA in order to qualify. “And it’s not just one or two rock-stars,” one Mercerite tells us. “A lot of simply ‘good’ consulting staff members gone to get their MBA via this program.”

Compensation Analyst: Starting base salary: $45,000-$50,000 Signing bonus: $5,000-$10,000 Associate: Starting base salary: $100,000-$105,000 Signing bonus: N/A Mercer is said to have instituted a "temporary" starting salary reduction for the fall recruiting season, resulting in base salaries that are somewhat below the competitive market rate. The firm's bonus structure is somewhat unique: At the end of the year, a consultant is first given a raise (based on performance, firm profits, etc.), then the consultant receives a bonus equal to the difference between the previous year's and the next year's base salaries. Therefore bonuses are a direct function of raises, which in the past increased steadily and quickly but now, with depressed firm profits, tend to climb much more slowly.

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Mercer Management Consulting

Organization Chairmen profiles Jim Down Jim Down received a BS in engineering from Columbia University and an MBA from Wharton. Before joining Mercer he held management positions at Conrail and Air Products & Chemicals, Inc. The charismatic Down has been a regular speaker before professional and industry groups around the world, and he co-authored “Successful Acquisitions and Divestitures,” published in the Handbook of Business Strategy. Some of Down’s work includes helping develop a corporate strategy for a major telecommunications company, formulating a new strategic plan and organizational structure for a leading global transportation company, and developing international strategic plans for a global service industry firm. He formerly headed up the firm’s transportation and logistics practice.

David Morrison In addition to his role as vice chairman, David Morrison is one of Mercer’s thought leaders, having co-authored (with Adrian Slywotzky) The Profit Zone, How Digital Is Your Business? and Profit Patterns. With more than 20 years of consulting experience behind him, Downs has worked with firms across the industry spectrum, from Internet startups to financial services giants. Morrison came to Mercer through its merger with Corporate Decisions, where he was president. Morrison hasn’t always been in business, though – after graduating from the U.S. Naval Academy, he served seven years as a flight officer in the Navy. He went on to get an MS in engineering from Princeton (where he also won a Guggenheim Fellowship) and an MBA from the Harvard Business School.

Offices Mercer Management Consulting has offices in the following cities: Beijing, China Boston, MA Buenos Aires, Argentina

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Mercer Management Consulting Organization

Chicago, Ill. Cleveland, OH Dallas, TX Frankfurt, Germany Hong Kong Houston, TX Lisbon, Portugal London, United Kingdom Madrid, Spain Mexico City, Mexico Montréal, Canada Munich, Germany New York, NY Paris, France Pittsburgh, PA San Francisco, CA Seoul, South Korea Toronto, Canada Zürich, Switzerland

Key officers Joao Baptista – Worldwide Head, Communications, Information & Entertainment Group Laurent Desmangles – Vice President, Mercer Private Equity Geoff Nicholson – Vice President and UK Operations Head Adrian Slywotzky – Vice President, Mercer Management Consulting Richard Wise – Vice President, Mercer Management Consulting

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Mercer Management Consulting

Vault Newswire November 2002: Changes at the top Mercer Management President James Down announced that he would retire from the firm at the end of 2002, in order to spend more time with his family. Down will be replaced by David Morrison, a Mercer vice chairman.

July 2002: Slywotzky signs with Warner Books, again Warner Books announced that it had signed Mercer management guru Adrian Slywotzky to write a book based on his recent Harvard Business Review article, co-written with Mercer colleague Richard Wise. The article is called “The Growth Crisis – And How to Escape It.” The deal is Slywotsky’s second with Warner – in September 2002 the company published his book The Art of Profitability.

July 2002: An informed purchase Mercer made public its acquisition of Informed Sources Holdings, Inc., a British media consultancy. Informed Sources has offices in London and New York, and the acquisition is intended to help Mercer make further inroads into the U.K. consulting market.

March 2002: Hi, Jim! Mercer expanded its energy consulting capabilities by hiring the entire practice of James Miller & Company into its Energy, Life Sciences and Core Industries practice. Until founding his own firm in 1994, Miller was a senior vice president and leader of Gemini Consulting’s energy practice. JM&C was based in Houston.

January 2002: Sino the times After receiving the go-ahead to list on the Hong Kong stock exchange, Sinotrans, China’s largest shipping and logistics organization, enlisted Mercer to help it convert from a strictly state-owned operation to one that has to respond to the demands of stockholders. The contract could be a boon to Mercer’s presence in China, as Sinotrans holds a virtual monopoly over shipping in China.

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Mercer Management Consulting Vault Newswire

October 2001: Mercer shutters two offices Because of a decline in demand and a need to rein in costs, Mercer announced that it was closing its Washington, D.C. and Geneva, Switzerland offices. The closures included laying off the majority of the staff at both locations, or 77 employees.

March 2001: Predicting success Mercer announced a strategic alliance with Applied Predictive Technologies, a manufacturer of predictive customer relationship management software. Mercer will use APT software in its Nexperiment solution, an approach it uses to improve clients’ marketing efforts.

September 2000: A Swiss treat In an effort to boost its position in the European market, Mercer acquired the St. Gallen Consulting Group, a Swiss consulting firm. The firm, which was founded in 1984 and specialized in strategy, marketing and change management consulting for clients in the financial, manufacturing and consumer goods industries.

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Mercer Management Consulting

Our Survey Says Nice people, smart people Life at Mercer is pretty good, we hear. “One reason I joined Mercer was the culture,” says one source. “There are very smart people, but also very likeable people.” The offices are said to be friendly, sociable places. “Partners all have a very open-door policy.” Work hours and travel are pretty typical for the industry, but few people work weekends and travel, when necessary, is kept to a Monday morning/Thursday evening schedule. As always with consulting careers, however, one good or bad engagement can change everything. One respondent tells Vault that the Mercerian quality of life “is pretty project dependent. The project I’m on now goes from about 8:30 a.m. to 9:30 p.m., with some weekends.” Mercer is also typical of its industry in that it is male-dominated. As one insider explains, “The lifestyle, for some reason, seems to attract more men.” Nevertheless, the firm has a number of initiatives, including a women’s consulting club, to encourage diversity. When it comes to negotiating child care issues, the firm is “pretty flexible in trying to work with people”; one respondent tells Vault of a female partner who was allowed to work half-days so she could spend time taking care of her young child. The firm adds that part-time schedules, leaves of absence, and other family-friendly programs are available to both male and female employees.

Near the top Mercerites insist that they’re capable of competing with the very best: “If you look at the most senior partners, those guys are as smart as the guys at the top firms,” says one consultant, though they add that “sometimes I don’t see as much depth in specific areas [as at other firms].” The lack of depth is something that could retard the company’s progress in the near future, says another respondent: “Mercer has been hit hard because the focus has been on growth strategy. Now the bigger companies are moving to implementation and I think Mercer would ideally like to be there as well, though it doesn’t have the strength right now.” And despite their pride in the company’s top ranks, Mercer consultants say that communication between the executives and the rank-and-file could be better. “Sometimes you do not know what the person who runs the firm is thinking,” says one Mercerite. “The leadership has made us a bit listless. There’s sometimes no sense of direction from Boston.” Visit the Vault Consulting Career Channel at http://consulting.vault.com — with insider firm profiles, message boards, the Vault Consulting Job Board and more.

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Mercer Management Consulting Our Survey Says

Learning the ropes New hires at Mercer go through two weeks of consulting training at their office, followed by a weeklong, firm-wide meeting at the Boston office. After six months, consultants undergo a week of more focused training in specific skill sets. Ongoing, online training is available over a company intranet, and Mercer consultants often coordinate office-based instructional sessions. As at most firms, training budgets at Mercer have been affected by the economic downturn. For instance, instead of flying everyone to a single location for their six-months training, instructors are now flown to different offices. Luckily, most respondents don’t seem to care all that much about official training. “Informal channels are pretty predominant; it’s probably 90 percent of the best training.”

Tightening the belt Mercer made its name during the 1990s as a firm at the cutting edge of growth-strategy consulting, and as the economy has slowed down, so has its business. The firm put off bringing in its 2001 class for almost a year, a move that insiders say had a significant impact on morale. “The new class injects a little bit of life into the firm,” one respondent reports. “Events are planned around the summer hires and the new class, and the new class organizes events.” Fortunately for those pining for more festivities, Mercer is back on schedule with its 2002 hires, who started in early September 2002. Apart from closing its Geneva and D.C. offices, Mercer’s cost-cutting focus has also caused the disappearance of amenities like free sodas (now they’re subsidized) and Friday free lunches. Another result of the belt tightening is the increased rigor of the firm’s periodic review process. “Mercer policy has always been that the bottom 10 percent get cut every six months,” one source tells us, though during the dot-com boom, when high attrition was a problem, the review policy had fewer teeth. Now “the issue is that no one is leaving,” and as a result the review process is much stricter. The firm asserts that there has never been an official policy of cutting a specific percentage of the workforce; rather, it says that under performing employees are let go, just as they would be at any other company. One consultant agrees: “The last two years have been an ugly time to be in consulting, and they definitely did some aggressive counseling out.” Another consultant reports that while few inside the firm expect another round of layoffs, “Occasionally the sniper will come out. You’ll hear about a partner who was let go. I won’t be terribly comfortable until a year after the last round.” 14

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Mercer Management Consulting

Getting Hired To Apply Mercer encourages prospective applicants who are in school to apply online or, if your campus is on Mercer’s list of schools it visits every year, to submit a resume and cover letter to your school’s career center. (This year, Mercer will visit an abbreviated list: Dartmouth, Duke, Penn, Yale, Harvard, Princeton, Northwestern, Stanford and SMU.) The firm is particularly interested in building its Houston and Dallas offices, and SMU applicants and those who express an interest in consulting in the Lone Star State may have an extra advantage in the recruiting process. Applicants who are already out of school should submit their resumes and cover letters online. Additionally, aspiring Mercerites can send resumes and cover letters to their nearest Mercer office. The addresses for Mercer’s 22 offices are

North America: Boston 33 Hayden Avenue Lexington, MA 02421 Tel: (781) 861-7580 Fax: (781) 862-3935 Chicago 10 South Wacker Drive 13th Floor Chicago, IL 60606 Tel: (312) 902-7980 Fax: (312) 902-7989 Cleveland One Cleveland Center 1375 East Ninth Street, Suite 2500 Cleveland, OH 44114 Tel: (216) 830-8100 Fax: (216) 830-8101

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Mercer Management Consulting Getting Hired

Dallas 3500 Chase Tower 2200 Ross Avenue Dallas, TX 75201 Tel: (214) 758-1880 Fax: (214) 758-1881 Houston 1331 Lamar Avenue Suite 1250 Houston, TX 77010 Tel: (713) 754-6180 Fax: (713) 754-6190 Mexico City Paseo de Tamarindos 400-B Piso 10, Bosques de las Lomas 05120 D.F. Mexico Tel: 52-55-5081-9000 Fax: 52-55-5258-0186 Montréal 600, boul. de Maisonneuve Ouest 14e étage Montréal, Québec H3A 3J2 Canada Tel: 514-499-0461 Fax: 514-499-0475 New York City 1166 Avenue of the Americas New York, NY 10036 Tel: (212) 345-8000 Fax: (212) 345-8075 Pittsburgh One PPG Place, 27th Floor Pittsburgh, PA 15222-5401 Tel: (412) 355-8840 Fax: (412) 355-8848

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San Francisco Three Embarcadero Center Suite 1670 San Francisco, CA 94111 Tel: (415) 743-7800 Fax: (415) 743-7950 Toronto BCE Place 161 Bay Street, P.O. Box 501 Toronto, Ontario M5J 2S5 Canada Tel: (416) 868-2200 Fax: (416) 868-2208

South America Buenos Aires Florida 234 Piso 4 (1334) Buenos Aires Argentina Tel: 54-11-4394-6488 Fax: 54-11-4326-7445

Europe Frankfurt Friedrichstr. 2-6 D-60323 Frankfurt Germany Tel: 49-69-17-00-83-0 Fax: 49-69-17-00-83-33 London 1 Grosvenor Place London SW1X 7HJ United Kingdom Tel: 44-20-7235-5444 Fax: 44-20-7245-6933

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Mercer Management Consulting Getting Hired

Lisboa Av. Praia da Vitória, 71-5.ºC (Edifício Monumental) 1050 Lisboa Portugal Tel: 351-21-311-38-70 Fax: 351-21-311-38-71 Munich Stefan-George-Ring 2 81929 Munchen Germany Tel: 49-89-939-49-0 Fax: 49-89-930-38-49 Madrid Paseo de la Castellana, 13-2º piso 28046 Madrid Spain Tel: 34-91-531-79-00 Fax: 34-91-531-79-09 Paris 28, avenue Victor Hugo 75 116 Paris France Tel: 33-1-45-02-30-00 Fax: 33-1-45-02-30-01 Zurich Tessinerplatz 5 CH-8027 Zurich Switzerland Tel: 41-1-208-77-77 Fax: 41-1-208-70-00

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Asia Beijing Suite 6, 35th Floor, China World Tower 1 No. 1 Jianguomenwai Avenue Beijing 100004 China Tel: 8610-6505-9628 Fax: 8610-6505-9629 Seoul 5th floor, Woori Investment Bank Building 826-20, Yeoksam-dong, Kangnam-gu Seoul, 135-935 South Korea Tel: 82-2-3466-3100 Fax: 82-2-3466-3105 Hong Kong 32nd Floor NatWest Tower Times Square One Matheson Street Causeway Bay Hong Kong China Tel: 852-2506-0767 Fax: 852-2506-4478

Hiring process Mercer hires recent college graduates for its analyst positions and MBAs for its associate positions. Most non-MBA students in graduate programs will start in analyst or consultant positions. In 2002, Mercer is actively recruiting at Dartmouth, Duke, Harvard, Northwestern, Penn, Princeton, SMU, Stanford and Yale, in addition to a number of Canadian and European schools (see the web site for the full list). The firm travels to Harvard, Kellogg, Sloan, Stanford, Tuck and Wharton, plus Canadian and European schools for its MBA hiring. But despite this far-flung search, Mercer does not staff its upper ranks strictly with B-school grads. The firm employs a merit-based promotion structure in which consultants joining out of college can advance to the partner level without a graduate degree.

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Mercer Management Consulting Getting Hired

Mercer maintains a detailed explanation of its interview process on its web site. The site also provides interview advice and two interactive cases. (The cases are good enough, that even if Mercer isn’t on your list you should check out the site to bone up for other interviews.) Mercer urges interviewees daunted by the prospect of the case interview to relax – the firm is “not looking for a specific answer,” it’s simply “trying to gain some insight into your thought processes.” These aren’t “bad cop, stress interviews.” Insiders tell candidates to expect three rounds of interviews, with the first two on campus and the last at the office being applied to. The first generally consists of one 30-minute case interview and one “fit,” or resume, interview, while the second round is typically two cases and one fit. The last, a half-day affair, also involves two cases and one fit interview. Because Mercer is “more of a pure strategy firm,” cases are a central part of the process; one contact reports that “success on the case interviews is absolutely critical,” though the right approach is also important. Insiders warn that candidates should “stop trying to use Porter or BCG frameworks to crack the case – use your head and good business sense from the perspective of the customer.” One consultant advises: “Personality is really important. Mercer turns downs many people who ‘ace the case’ because they do not fit. Arrogance is a sure way not to get an offer.” Another source suggests “calling up someone from Mercer that you meet at an info session and asking them for tips,” because “people at Mercer are very committed to recruiting, so they will always be willing to squeeze you into their schedule.”

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Questions to expect 1. Case: Our client wants to build stronger relationships with their customers. How would you advise them? Without question, candidates should ask what kind of client they’re dealing with and who the customers are. There are no points awarded for bold assumptions. After uncovering this information, candidates should ask the interview pertinent questions to ascertain the needs of the customers and how the client can better address them. For example, a bank should consider registering some customers for online banking services in order to better target them through e-mail and online advertising. 2. Case: You own a ski resort in Vermont. Tell me about your strategies and the daily, business-related issues you need to tackle. Now assume I’m an investor. Convince me that you’ve thought through the necessary strategies. Why should I entrust my money to you? Insiders tell us that interviewers frequently take hobbies and extracurricular activities from a candidate’s resume and filter them directly into case study questions. So beware what you list in your resume: The information may come back to haunt you! Oboe players may find themselves owning hypothetical music stores; those who have done stints abroad may suddenly own international franchises; and athletes may suddenly become involved on the business end of their favorite sports. 3. Case: You’re a utilities company in a small town and you’re having trouble getting your customers to pay on time. What do you do? Candidates should ask questions to find out more about this utility company including the people it services, what geographical region it works within, its age, the number of people it employs, etc. Candidates should assume that there is always more information to obtain. Once the framework for the case has been established, candidates may find themselves bombarded with “research tools”; indeed, insiders say that Mercer is a graph-intensive firm. “Don’t be surprised if the firm hands you graphs as part of a case study,” one insider warns. “Mercer will want to see how you analyze it. Consulting is an odd skill set, so it’s hard to tell who would be good at it, particularly at the undergraduate level. To ensure a catch of quality candidates, we have to cast a wide net.”

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4. Guesstimate: There is an outdoor fountain. You can spend one day at this fountain and it can be at any time of the year, but it can only be one day. From your observations on this day, how do you estimate the money thrown in for the entire year? Quantitative ability is vital in consulting, especially when using it to make informed speculation. Mercer is no exception, and the firm often gives guesstimates to gauge quantitative ability. Pick a day in the year when the amount of money tossed into the fountain is neither dramatically above or dramatically below the mean. Since the fountain is outside, one can assume that more people might congregate there on a warmer day and thus throw in a larger number of coins. Seasonality is an important issue in forming an approximation of the fountain’s annual revenue. 5. You have three hundred dollars in the bank. The interest is 10 percent a year. How much money will you have in the bank after 2 years? Candidates may receive a question like this if they are right out of college and the interviewer wants to test their mathematical abilities. Mercer does a lot of compound interest, so candidates should know how to solve basic math problems like this one. Also, insiders report that Mercer doesn’t mind its candidates using pen and paper to do quick calculations. Extremely easy sums, however, are best performed in the head. In one year with 10 percent interest, you will have 300 + 30 (10 percent of 300), or $330. After another year of interest, you’ll have 330 + 33 (10 percent of 330) – so the answer is $363. Don’t struggle with simple math like this! 6. Tell me about a problem you faced and how you solved it. Believe it or not, it doesn’t matter much what kind of problem a candidate chooses (although a candidate describing how cleverly he crafted a fake ID in order to buy beer when he was 19 will not impress the interviewer). The interviewer is looking for the demonstration of a logical process. How did the candidate identify the problem? What steps did she take to solve it? What was the result? At a team-oriented place like Mercer, a description of collaborative effort would be appreciated, if not downright welcomed. Nevertheless, the firm is also interested in hearing some “I” among the “we.” Candidates serve themselves well by discussing individual triumphs and accomplishments too.

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7. Guesstimate: How much wine is consumed in the United States each year? Guesstimate questions are not common at Mercer, but a question like this one is related to basic market sizing. Figure out what the different market segments are (wine bought in liquor stores, in restaurants, for cooking, etc) and how many bottles of each Americans consume yearly.

Questions to ask 1. What kind of travel opportunities does Mercer offer? By virtue of its work methods, Mercer is a travel-intensive firm especially suited to those who enjoy being on the road three or four days a week. Ask this question if you don’t naturally grimace at the thought of frequent-flier miles and a three-cities-in-one-month schedule. 2. What kind of expansion plans does Mercer have at this point? Mercer is an acquisition superhero, seeking out and purchasing smaller companies whenever it sees a good opportunity. 3. How has Mercer Management Consulting grown so quickly? One word: acquisitions. An interviewer will probably offer a few other reasons, however, some of which might touch on the thesis “Grow to be Great thesis.” The answer may seem obvious after a little bit of research, but that’s what interviewers want to hear – that you’ve done your homework and know the firm. 4. What is Mercer Management Consulting’s relationship with the other consulting firms owned by Marsh & McLennan? Mercer’s special relationship under Marsh & McLennan merits a thorough explanation. An interviewer should be prepared to give one. 5. Please tell me about Mercer’s training programs. Mercer’s recently refined training program typically receives rave reviews. Candidates should brush up on the basics so that they can ask the interviewer more specific questions regarding training duration and content. 6. How do you use “The Profit Zone” and “Value Migration” in your daily work as a consultant? Your interviewer will be impressed that you have heard of these conepts (and it might be better to take a look them before the interview).

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7. What is the timing and structure of the typical career path at Mercer? Be careful. Questions about promotion and advancement might be considered “too forward,” says one insider.

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On the Job Day in the life Analyst 9:15 a.m.: I arrive at work, check my email, and goof off until about 10. 10:00 a.m.: I return to the analysis or slides du jour; mornings are all about Excel and PowerPoint. 1:00 p.m.: I go out for lunch. Living in a big city, I almost always eat out, usually with coworkers. The firm is really good about giving us the freedom to set our own schedules – if I have to take a long lunch, I just make up the hours later. 2:00 p.m.: I’m back at work. I check my e-mail/voicemail again, finish with e-mail writing from the morning and tackle the rest of the slides from the morning. 2:30 p.m.: I meet with my team; we do this at least once a week, and it’s a formal event. I present my slides and make sure my work meshes with everyone else’s. Our engagement manager critiques our work and gives us follow-up tasks. 4:00 p.m.: I work on implementing my manager’s suggestions for the rest of the day. 6:30 p.m.: I leave the office. About five days a month my work schedule really spikes and I have to stay late, sometimes past 2 a.m., but those days are pretty predictable. Still, there’s always about a week each month that is completely miserable.

Associate 7:30 a.m.: Get to the office. I scramble to finish materials for my 8:00 a.m. conference call. 8:15 a.m.: We couldn’t get hold of the other parties for conference call. I take the opportunity to review the materials with a junior team member in the office. 8:30 a.m.: We finally reach the client who was supposed to take the call.

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9:00 a.m.: Multitasking paradise. I answer e-mails, make travel reservations for the weekend, return phone calls, and sketch out a detailed work plan for another junior team member. 11:00 a.m.: Meet with another new team member to help familiarize her with basic data mining and querying tools. As part of our project, my team has been conducting extensive customer interviews and has recently received a ton of data from a vendor. 11:30 a.m.: Meet with a partner from the San Francisco office to discuss possible improvements to our training program. It’s unrelated to my current case, but it needs to get done. 12:00 p.m.: Meet a non-Mercer friend for Chinese food. 1:00 p.m.: We take the conference call that was delayed from the morning. The feedback received helps to finalize details for an interactive model. 2:00 p.m.: More multitasking. Finish work plans for two junior members, make and answer client calls, discuss project requirements and set up interviews. 4:00 : Meet with the team members to lay out analytical needs. Confirm and alter direction of analysis as necessary. Some days are driven by you rather than the client – but this isn’t one of them. 6:00 p.m.: Finish up voice mail and draft some materials for next morning. 8:00 p.m.: Take off.

Job descriptions/Career path Analyst Analysts are typically recruits fresh out of undergraduate institutions. Once through their initial training programs, analysts are placed on case teams and work within various industries. Insiders admit that duties "vary each day" and that "there is no typical format or formula." Nevertheless, once behind Mercer walls, most analysts find themselves researching and collecting data. They conduct quantitative, strategic, and financial analyses and often organize Mercer's never-ending slide presentations. Not surprisingly, the variety and depth of an analyst's tasks deepen as he or she gains more experience. Analysts are given advisors, feedback on each new case, and biannual, formal career reviews. Analyst duties include library research, 26

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spreadsheet formulation, overhead designing, slide population and design, strategic case analysis and presentation of research and data findings to case team and clients. According to Mercer, while many analysts do return to school after a few years, it is by no means mandatory. The firm reports that in 2001 more than one-third of all people promoted to partner had started out as analysts. Of course, some consultants choose to move on, which much success. In a typical year, 95 percent of Mercer analysts applying to graduate school are accepted into at least one of their three top choices.

Associate Associate positions are typically filled by MBA graduates or by research analysts who have been promoted. In rare cases, graduate students with nonbusiness degrees but with relevant work experience are also hired as consultants. Associates continue to perform the analysis and research completed by their underlings, the analysts. In addition, they interact more regularly with clients, complete more sophisticated modeling and design, and seize greater responsibility in analyzing and packaging research findings. "Associates are in a rewarding phase of their young career," Mercer's web site says blithely, "having mastered routine analysis and with enough experience to quickly develop critical insights." After a couple of years more experience at the firm, associates often manage case teams. Typical associates duties include Excel model building, research structuring for projects, recommendation formulation, case team management, data collection and analysis, report writing and presentation creation.

Summer program Mercer hires a large number of summer interns each year (about 30 to 50 in the United States and about 12 in Europe), and it recruits almost exclusively from its core business schools: Harvard, Kellogg, Tuck, Sloan, Stanford, Wharton, INSEAD and IESE. “The first couple of weeks I had to expand my knowledge of Excel,” reveals one overburdened insider. “But Mercer lives up to its reputation for providing summers with a real consulting experience. The experience is very helpful for those who have never consulted before.” Another insider enjoyed the exposure to middle and senior management: “I played golf with the big shots.”

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Insiders advise that hard work, interviewing excellence, stellar grades, an impressive resume and persistence are the key factors to getting hired. “Go through the normal recruiting process,” advise successful summer consultants. “Mercer doesn’t have many back doors.” The career path runs from analyst to consultant to associate to senior associate to principal to vice president. OK, there is a potential back door. Mercer offers a position called case team assistant that is mostly administrative. However, assistants have been known to be promoted to analyst positions. There is no “up or out” policy for analysts or consultants. However, insiders report that employees at the higher levels must stay sharp to remain at the firm. “The lower-level people don’t control the cases coming in,” says one insider. “The vice presidents do. Therefore, when things go wrong, they’re the people who take the hits.” New associates usually join the firm as part of the Central Consulting Group (CCG), which allows them to be staffed on a variety of issues, functional areas and industries across all practice groups. As an associate moves toward the partner level, he or she generally selects an area of focus. CCG also handles office-related problems – from the important to the mundane. One CCG insider adds, “You can say something like ‘I notice morale has been down recently. Can we have an office function on Friday?’ And the company usually takes notice and schedules an event.”

Feedback/career reviews Mercer’s feedback system is one of the most elaborate in the industry. There are twice-yearly career reviews and feedback is considered a “requirement” rather than an option. Such feedback occurs in two forms: “informal feedback” and “case reviews.” Informal feedback occurs in a variety of settings “ranging from brief conversations to dinners between a case manager and a team member. It is meant to include everything from additional project coaching to suggestions for more fundamental skill development. Most importantly, it is always given in the context of a case.” Because the feedback is action-based, its recipient has the chance to take informed steps toward improvement. After each case, or every three months or so, case team members receive a written review. These reviews consist of both qualitative feedback, which underscore strengths and weaknesses, and quantitative marks. Case reviews

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are most often developed by a case team manager and are often delivered in person. When an employee receives feedback, he or she can respond via questions and discussion. These written case reviews are then used as the foundation for Mercer’s career reviews. Career reviews are held twice each year, in May and November. Mercer describes the case review process in the following way: “Meetings are held in each office to discuss each consultant’s work in the past six months. Advisors, project managers and other partners who have worked with a consultant provide input into career review outcomes. Each review goes to the consultant’s advisor, who consolidates the reviews (within the wider context of the individual’s career) into a single page summarizing an overall career message, key strengths, major areas of improvement and development objectives. The advisor then takes that page into the career review meeting, where it may or may not be edited. The final step involves cross-calibration of reviews for each job title within an office and across offices, to ensure that everyone was treated fairly.” Mercer is a believer in upward feedback, or feedback that is given by lowerlevel employees to their managers and advisors. Upward feedback is taken seriously and used in partner/senior associate promotions as well an in compensation decisions. Most importantly, it is a tool to help managers improve their roles as mentors and instructors. Always one for intense, if not dramatic, decision-making, Mercer reexamined its upward feedback system in early 1997 and decided to trash it. By the fall of the same year, it rolled out an entirely new, two-part plan that involves both individual reviews and “face-to-face team discussion” for members on the same case team. Insiders reveal that although the new system is a considerable improvement over the “Stone Age” original, the time to create it was too long. “For, like, eight months there was no system at all,” reveals one insider. “Mercer is thorough, all right. But sometimes it doesn’t take into consideration the effects of transitional periods.”

Mentoring Like its feedback program, Mercer mentoring is a mix of formal and informal exchanges. Informally, new consultants are assigned “buddies,” who are usually staff members with slightly more seniority (a year or two) than their junior cohorts. Buddies are there to tell a new hire everything he or she wants to know, but is “afraid to ask.” Off the record, buddies exchange information on the precise meaning of “business casual” attire, which partners are Visit the Vault Consulting Career Channel at http://consulting.vault.com — with insider firm profiles, message boards, the Vault Consulting Job Board and more.

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schmooze-worthy and which are best left alone, and where to go for the best Thai food. Mercer also offers a formal advisor program. “Advisors are partner-level persons from your office who will help you and the firm manage optimally your career with Mercer,” says the firm. “Your advisor will help you map out your career, understand your strengths and weaknesses, recommend and often pursue for you specific role and case assignments that will best address your development objectives, represent you during career reviews, and even act as a friend!” Mentoring also occurs at Mercer the old-fashioned way: through genuine and sincere relationships formed between people who are mutually supportive of one another’s knowledge, expertise, and ambitions. In its literature, the firm stresses that its “very collegial atmosphere” fosters such relationships. Insiders confirm that unofficial mentoring is common.

Training Mercer’s training system is fairly involved, consisting of three platforms: “the core program,” “the informal workshops” and “just-in-time.” The core training program is geared to assist professionals in becoming proficient in consulting skills; it also ensures all consultants access to the same common knowledge, tools and methodologies. The core program “consists of a series of mandatory, week-long sessions designed to build advanced and focused skills at relevant points in a consultant’s career.” Each session allegedly reinforces Mercer’s overarching visions and strategies, as well as builds values and fosters a common intra-firm culture. All Mercer consultants participate in the core program. New hires take courses in orientation, toolkit training and case simulation. More experienced consultants and associates take the developing professional program. All sessions are taught by the firm’s senior members. Mercer offers “informal workshops” that seem to be taken very seriously. Consultants may explore areas of particular interest to them by attending monthly training workshops which are taught by experienced Mercer staff. The consulting staff determines the subjects of these workshops, which inevitably reflect the morphing needs of the firm. Historically, topics have focused on computer skills, analytical techniques and advanced consulting skills. Monthly workshop topics might include problem-structuring techniques, effective slide writing, advanced cost analytics, Excel techniques and regression analysis.

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Mercer’s just-in-time training, on the other hand, addresses the immediate needs of consultants. Consultants assigned to new cases can learn industry and functional topics through self-taught materials or workshops. Mercer consultants teach many of the workshops. Sample workshop topics might include interactive strategy modeling, supply chain management, “credit card university” (a program on the credit card industry and its methodologies and techniques) and language training. One insider reveals that the off-site training events are often group-oriented. “There are some interactive strategy models – mainly financial strategy models – that teams of people work on together. The teams then compete against one another for the best company strategy. You need to develop a great model, one which predicts pricing and consumer reaction.” A different insider says he looks forward to the training sessions because they are held “in a different office each year. You stay late – until 11:00 each night. You work on practice cases and listen to lectures on accounting and business analysis. Even though it’s hard to stay alert, you learn a lot.”

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Final Analysis Mercer Management Consulting may not be the first firm that jumps to mind when one thinks of strategy consulting, but at the rate it’s growing that could change very quickly. Mercer’s deft mixture of star power and high-quality work across a range of industries puts it in a strong position to challenge the Big Three – Bain, Boston Consulting Group and McKinsey – over the next decade.

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Recommended Reading • Boost Your Marketing ROI with Experimental Design by Eric Almquist and Gordon Wyner, in Harvard Business Review, September/October 2001. • The Growth Crisis – and How to Escape It by Adrian Slywotzky and Richard Wise, in Harvard Business Review, July/August 2002. • The M&A Growth Engine May Have Run Off Course by Adrian Slywotzky and Richard Wise, in The Wall Street Journal, July 18, 2002. • The Right Approach Can Improve Your IT Investment Returns by Jeffrey Infusino and Sunil Subbakrishna, in American Banker Online, December 28, 2001. • Winners and Losers by John Hanson and David Sovie, in Telephony, August 19, 2001.

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