Tell you what, we'll do what we did in the first session, which is allow you both to do your own intros. And then if you miss anything, call supplement afterwards, if that sounds good with you.

Yeah. Absolutely.

Okay. Well, Mark, why don't you lead us off with a intro? And then, Simon, you go second.

Sure. Sounds good. Mark Sloan. I am the managing director of Asaph Advisors. I've been involved with consulting, for the bulk of my career. Started at Anderson Consulting, Accenture.

I left because I had young kids and wanted to be home for dinner. Took a job managing eight consultants. And long story short, over five years, we grew up to 1,600 people, $400,000,000 operating around the globe. So I went from being what I call in the client partner mold to having to figure out how to be the the managing partner and really run an organization. And so since that time, I've been advising other consulting and professional services organizations on how to how to scale, how to grow, how to become more efficient and more effective at what they do.

Very good. Simon?

Brilliant. Thanks, Ben. I'm Simon Dixon. I'm the founder of Hat Mill. It's a logistics and supply chain consultancy I founded just over seventeen years ago.

We help, businesses make big investment decisions in their logistics and supply chain, then go ahead and implement them around sort of high stakes investment decisions around new distribution centers, networks, and things like that. My personal background, before consulting and, when I had a real job, I used to work in industry in retail logistics and then worked for a couple of consultancies before founding Hat Mill. That included a boutique and one of the one of the big four accounting firms in The UK.

Very good. So the reason why I wanted Mark and Simon on this, well, with the topic being the future shape of consulting firms is flat, is that Simon was one of the first people I met when I joined CMAP four and a half years ago at one of our user forums, and he told me about Hat Mill and how they operated, I wanna say completely flat, org structure with no job titles, limited, no expense policy, and followed a... If I'm remembering right, Frederick Le Lou.

Good memory.

And some of the organizational theory that he put into practice and listened to Simon talk about his own experiences in big consulting and boutique consulting.

And now all of this, like, media coverage about the future shape of consulting firms is coming into play. I kind of thought, has he has he got ahead of this intentionally? And that'll be some of the question, like, how does the fact that he's been operating a business with a flat org structure help or hinder in this new tech and AI enabled world, if at all?

So, yeah, really interested to get Simon's insights from that perspective. And then wanted Marco. Marco's completed the hat trick of webinars with CMAP. He is my go to person in North America when it comes to talking about things like ops and org structures and having worked in big consulting yourself. I thought might still be flying a little bit of a flag for the pyramid, so might come in with a slightly different perspective.

So, yeah, keen keen to share with the audience today some insights into whether we feel like the org structure is changing. And I don't know if both of you listened to the tail end of the first session, but two of the speakers from that who run their own firms were talking about how the shape of their business is changing already.

So that was not unexpected, but a nice sort of segue into this.

So so let's kick things off question one. The first topic is all around has the shape of firms changed, if at all? Like, what have you observed in the market with regards to the changing shape of firms? And then, Mark, I'll come to you first because you you work with a broader set of firms. Then, Simon, you can tell Lou wants a little bit more about your own business.

Sure.

Sounds good. I... You know, from from my perspective, there is a flattening of the organization. I I started my career thirty years ago at at Anderson Consulting, and it was a big pyramid. Then when you tilted your head back, you had to look way up to see the partner at the top. And you might be on an engagement and never actually see the partner. Like, you might see an associate partner, but you were likely working with a senior manager.

Fast forward thirty days, I I think, you know, the the pyramid is just not as high. And a variety of reasons for that. Right?

We can all do a lot more and accomplish a lot more than we could thirty, twenty, ten years ago. And I think more is expected. I think clients clients expect more at a lower price point, so you can't have the huge teams.

And I think, you know, the the partner level role, the the senior executive level role inside of a consulting or professional services org has to be more of a a a contributor, not just a manager of of the business. So I think more organizations are populated with what I define as the client partner, and, you know, there's there's less need for the managing partner. Right? And the client partner's out there doing fieldwork, engaging with customers much more than they used to because they've got the expertise. Because clients want the expertise from the expert, not from, you know, the the junior analyst on the team. So I've I've seen a lot of pressure on the the the the hierarchy that way.

Simon, tell tell everyone about your firm, how long it's been with this org structure, and then whether you're starting to get a few more LinkedIn DMs from other leaders or founders going, hey. I think you might have been onto something here.

Yeah. Sure. Thank you, Ben. I also... I've just seen some chat around Mark's volume as well.

I don't know if there's anything you can do about that while Cheers, Simon.

And, hopefully, anyone's turning their volume down if I'm blasting out their speakers right now.

So...

Yeah. So I so I I I left a big four consulting firm to go and set up on my own, not necessarily with an intention of building a a consulting firm from the outset, but just wanted to to break and and, you know, do a lot like lots of people do as they leave large firms.

As we started to grow and I started to add people to the team, it made me start to reflect on what I felt had worked and what hadn't worked in other consulting organizations.

And I'd felt that the the classic pyramid of... Yeah. There's often sort of dictated by a spreadsheet somewhere with a series of grades and a number of people in those grades and a charge rate and a a varying utilization and a sales target that varies depending on where you are in that pyramid. And, hopefully, by the... If all the numbers work, you get a nice big juicy profit number at the at the bottom of the spreadsheet.

For me, that just didn't work from a...

An employee experience point of view, but also from a a consult... A performance point of view from the consultancy because it's largely predicated on people within the pyramid competing with each other for scarcer and scarcer roles further up the pyramid by nature of the of the shape.

So that doesn't really work for me because if, you know, let's say, Ben, you and I are both, you know, I don't know, senior managers and we're both going for a director role, there's two ways we can... Well, there's a number of ways we can do that. And, largely, all I have to do is be slightly better than you when it comes to, you know, assuming there's a vacancy. Yeah. I'm slightly better than you, but I can achieve that by just making you look bad. I don't need to be that good.

So... Yeah. And that doesn't give the the consulting firm a great performance in terms of a client experience. So it's... That didn't necessarily work.

And I think the I think the other thing is you've all the whole thing around promotions and job descriptions, it's all predicated on someone in the organization feeling that actually if you can fill all these numbers and create this, know, however steep your pyramid is or or however narrow it is, that you've created something that is absolutely fixed and and will work really well for how you engage with the external market. And I think one thing that we've learned certainly in the last, what, six years and possibly longer is you you can't predict the external market. The level of change in the the the the scale of that change is on... Is, you know, like we've never seen before.

Yet, you know, if you if you sort of build the spreadsheet with the numbers, you sort of think it's gonna work. And, really, I think where where consulting needs to move to is a far more flexible and adaptive style that allows people to move into spaces to to provide the best service.

Just a quick follow-up on that for you, Simon.

Do you ever get people inside the business who've got itchy feet because they can't progress up a ladder? Because essentially, you know, the the job titles are are what they are, and everything else around the business is what it is. You've... You know?

Yeah. Sure. Well, just to give a bit of background, if you join Hat Mill, you're a consultant. Everyone is a consultant.

There's no there's no...

You know, that's it. It's just, you know, that that...

And and you're effectively the same. Now that...

Not everyone gets...

It's not, you know, total socialism in terms of everyone doesn't get paid the same and things like that, you know, just to to make that clear. But the the question...

When people say, well, how will I know will I...

If I've progressed in Right. And I asked them the same...

I asked...

I always asked them this question in terms of, well, if you're in a conventional firm and, you know, the partner turned around and said, next year, we're gonna promote you four grades. You're gonna go from, I don't know, associate to director.

Would you feel like you'd progressed, or would you just feel massively exposed? And pretty much everyone said, well, I'd feel massively exposed because wouldn't be ready for it. So for me, that then undermines the the view of promotion is the is the primary measure of progression. I think the primary measure of progression is when you do some sort of introspection and reflection at at, you know, at any point. And so am I able to do more now than I could six months ago, twelve months ago?

And and and if you can reflect on that and say, yes. Well, actually, I'm progressing because I'm building more skills and and then just take it take it forward on on that basis. Similarly, in a in a pyramid organization, measuring progression by promotion feels incredibly binary. You know?

And I...

I'm sure there's lots of people who've operated in a pyramid who, you know, it's promotion cycle. Am I gonna get that next level or not? Oh, well, we...

You know, we've had...

We've done the promotion board and you've not quite made it. That can feel like you've had a really, really bad year when you probably haven't. You know, it's it's never that binary. It's never a one or a zero.

And, Mark, from your perspective, when you're working with firms, like...

And they're they're considering things like a flatter organization structure or they're changing from a a pyramid, is there anything that you're seeing repeating driving that? The media headlines will touch on things like AI, but is there anything in addition to that that you've observed?

I think it's a it's a combination of of AI, and I'm gonna I'm gonna try and speak up because I've heard I'm I'm a little faint.

I feel like that's clearer.

Very good. So Yeah. Thanks, Mark. I think AI does provide the leverage that junior analysts used to provide in the in the olden days.

Right? But I also think clients, they want the expert. Right? They they want the person who has been doing this ten or fifteen or twenty years to be helping them.

It...

You know, as I was building a professional services group from from zero to 1,600, our biggest challenge and where we would have issues with customers was we would mobilize a team, and we may have even had a hierarchy, but we didn't have our expert, Hyeon Na, on every project because she couldn't be everywhere. Every...

Everyone always wanted Hyeon Na. Right? And so the challenge now or the opportunity now is you build...

Inside the firm, you build more experts. Right? And then you don't need a hierarchy. You don't need a command and control structure.

You're you're leveraging the team that you've got, and you're building those skills, and you're creating opportunity for the individual to be in charge of a a domain. Now they may not get promoted, like Simon was saying, four times in a year, but their span of control gets a little bigger or the amount of revenue they're responsible for with a customer gets bigger. And what you really want is you want, you know, six, 12, 24, 48 of those experts out there dealing with your customers so that you can have multiple people in the same place at the same time and not always trying to single thread it through, you know, one or two experts surrounded by, you know, a highly leveraged team.

Simon, do you run into any challenges with buyers of Hat Mill services for us... For an assumption that they might make previous... On using other consulting services where they would talk to a part... A managing partner, and then they would expect some seniors and then... Does that ever come up?

It does sometimes. I think it largely depends on the culture of the client that you're working with. I think the the the flip side of that is that if you talk to...

You know, if people on this call talk to...

Go and talk to most of their clients and ask a client to define what do you think a consulting director does versus what does a consulting manager do, they probably struggle to define that at all. You know? What what I think we've discovered is, you know, clients make perceptions based on appearances and behaviors rightly or wrongly. You know?

I've got a lot less hair than I used to have, and it's all...

You know, what little I've got is gray. People respect my opinion far more than they used to when it was all dark and long and curly.

You know, the the...

Maybe I...

Hopefully, I'm a bit wiser by now, but but, you know, people make those those perceptions. What's written on the the bottom of the email or what's on the the business card, I don't think clarifies that too much in terms of that client client perception. One thing that we do we do tend to avoid when we're dealing with new clients is we don't lead with our flat self managing organizational structure because I think that does create a barrier because they become obsessed with, well, these guys are just weird. I'm not sure we want them to come and solve our problem because I can't understand how they work.

So we just present in terms of, well, these are our roles on the project. So this would be a project lead. So they're accountable. They're the person you go and primarily talk to.

This person's the expert in this area. This person...

Yeah. So so we give them that clarity in terms of a project team, but we don't, you know, we don't let it get get in the way and and confuse matters.

That's really useful because what... I was thinking to myself, well, what happens if I... I'm sure this doesn't happen with Hat Mill because it's a probably perfect NPS scoring, extremely high levels of customer satisfaction. But if, like, there's a problem that arises, you know, in a typical pyramid, you can just keep going up the ladder to the most responsible person at the top, but you... It sounds like you've got some sort of, like, presented clear structure around each engagement.

Yeah. Absolutely. And I think I think, you know, sometimes, you know, obviously, you get some clients who are very hierarchical, and they absolutely would like me there at key moments because I'm the chief executive of Hatmill, and therefore, you know, that gives them a a sense that it's important to to to us as a firm and absolutely no problem with that and, you know, really happy to to play with that. But, actually, what we've got is that sort of default... Devolved decision making and and autonomy and authority within the team that actually they don't... You know, the client doesn't need me there to authorize or approve anything. That's entirely in the in the gift of the project team, they can make those decisions. So I'm I'm not gonna make any decisions that are different to anyone who was already in front of them.

And, Mark, one for you, and then, obviously, I'd love Simon's take afterwards as well. But, like, with the businesses that you're working with where their org structure is changing, how's that impacting things like their internal culture, maybe some internal expectations? Like, is it fairly dramatic? Is it pronounced? Or are firms doing this through sort of, like, natural churn and people are leaving and it's being... The bottom of the pyramid is being replaced with technology and AI?

It it really... What I have found is it depends on the tenure of the organization. So, you know, if it's if it's an organization that's been around a while and they've been more typical hierarchical, they're having a harder time adapting to the new world and and making the shift to a flatter organization. But then they start to see some of their rising stars exit for other firms that, that give them a flatter, greater opportunity to to add value versus, you know, organizations that have... You know, that are that are newer and that have hired folks that maybe are a little less tenured. Right? They're they're more accustomed to this model. They're they're comfortable in the flatter model. They, you know, they they have confidence that they can deliver whether they have five, seven, or ten years of experience, and and they don't think they need twenty, twenty five years of experience.

And and I can remember myself sitting in a conference room with a client with, you know, an associate partner, a partner, maybe even a managing partner participating in, you know, a couple of these meetings.

And it... I just sort of looked up, and it's like, you know, it's gonna be years before I get to talk in one of these meetings. I'm just gonna be here listening apprenticing for a long time. And and so I I think you you find sort of a a natural self selection where the folks that wanna go faster are forcing some of the change. And if they don't get the change in their own organization, they're they're jumping ship to one that does give them that opportunity.

Slight slight twist in the question actually for you, Simon, because, you know, the culture isn't... Well, maybe it is, but I can't imagine the culture is changing dramatically because you've already... You've started the business with this. But, like, maybe for the audience, what are some of the sort of benefits or the challenges of having operated this way?

Culturally, I mean.

So the cultural benefits of operating in this way.

Yeah. Please. So I think in in terms of hard measures, our labor turnover is just a fraction over 1% over the last seventeen years. So, you know, so so for people who can look at this and feel that it's a little bit, you know, do these guys just sit around the campfire at night playing guitars?

Yep. No. We don't. And and there is some real good, hard, tangible financial benefits to operating in this way if you think about the cost of churn and and things like that.

So when people join, if they are if they have the personalities that's a lot...

That is aligned to self management and a flat structure, then it works really well. One of the key factors to that is absence of ego. So what you don't get when you join Hat Mill is the, you know, the the prestige, I guess, of leading a team of 15 people that you're totally accountable for. If you need that in your psyche to make sure...

To make you feel like you're doing a great job and you're important, this isn't the place for you because you're not gonna get that. If, however, you come there and you want to work as a dynamic team and you like change and you can maneuver...

Move around and you get exposed to lots of different things, which is a lot...

You know, quite often a a reason that people want to go into consulting, then actually, it it ticks all those boxes. So a big part of our selection process is trying to understand, you know, how big is the ego of a of a potential recruit, and we're looking for that to be as as small as possible.

Just gonna draw everyone's attention to the polls because I didn't do that in the first session at all, as we all know. In the second session, we've got three polls in the polls area. The first question that we've asked related to the... What we've just been discussing here is how many layers sit between you and the most junior consultant and your firm's leadership? Simon Mark, I don't know if you can see the results coming in now, but about a first, a 30% of people only have one layer between the most senior and junior. I'd love to know whether that's like a more recent transition, and then sort of like a more equal spread in terms of the people who've got two layers, three layers, and four layers between their most senior and their most junior, and then a handful who have got the, you know, the fifth for the more pyramid shapes.

Simon, are are people asking you in the community a little bit more about the shape? Because I feel from an observation and to Mark's point as well, all structures are changing.

And therefore, I would try and learn from maybe somebody who's been there and done that. Have you I don't know if you get that across your desk at all much, but any thoughts or observations to share there?

I I do get the occasional message on LinkedIn who... From people who want to understand what we've done and how we've done it. I think the the biggest challenge, and I don't... You know, sadly, don't really have answers for this, is how do you go from a pyramid organization to a flat one and, yeah, how do you manage the change through that process? You know, we've we've started... I was really clear when I set out that I didn't want to repeat the challenges that I'd experienced in... From the pyramid. And therefore, you know, I... I've not I've not sort of, you know, turned the ship one eighty degrees and and and moved from one to the other, but I think that is a big... Often a a difficult question that that comes out of this.

If that is a question that's in some people's minds on this call, my suggestion is actually just take one one sort of small team and move that in to make them a self managing team and make them flat and learn the lessons and then look how you you roll that out. This isn't a big bang thing, would suggest, largely because most firms are predicated on that ego and climbing up the pyramid. If you've got people who've just spent twenty years climbing up the pyramid and then the pyramid drops to being a flat line, It's not gonna feel great.

No. Mark, are you starting to see that in some of your firms that you're working with? Any of those challenges coming to bear? Because I think quite a lot of firms are changing shape, whether that be intentionally or unintentionally. But some of the the challenges and the outcomes that Simon's referenced there, no doubt, you know, are very real to those people.

Yeah. One one of the big challenges I've seen with clients and and even, you know, in in organizations I've been a part of is, the senior person has to let go of their ego a little bit. Right? In in in the old model, in the pyramid model, the partner was clean.

Right? She could come in. She could look at a deliverable, and she could tell you it was awful and you need to change it, and you guys are gonna be up all night making this deliverable better. Right?

In today's world, in a flatter organization, the leader, right, the senior most person has to take more input, and and feedback and incorporate the opinion of others on the team. Right? Because it's not the same command and control architecture. Right?

It's it's...

We're a team, and you might only have been here for a year, but you've got opinions, you've got thoughts, and and they need to be incorporated.

Because if they're not, that person's gonna go find the next firm that's gonna value their opinion. So I I think I... The the flatness has made it more, you know, democratic, if you will, where everyone's opinion matters. It it doesn't mean that the junior person's always right or the senior person's always right, but I think there's more of a discussion and debate and and openness than there may have been in the past.

Gonna move on to the sort of second part of the session, which is looking at the future of consulting firms. And I guess as a starting point, do you feel like the changing org shape is just inevitable because of technology and AI? Do you think it's gonna be more intentionally designed because they've people following firms like Hat Mill or other businesses out of consultancy who've got more flatter, less hierarchical structure. Do you think that, actually, it's coming through maybe from a leadership aspiration, maybe people who've left big firms starting boutiques, and they're trying to do something diametrically opposed to that?

Simon, we'd love your take first on that.

Yeah. Sure. I I think what I've learned is that if you are... If you were gonna go out and design a a... An org structure and break down the roles and look at the ratios of different people, whether it's, you know, people talking talking about periods. You know, now people talk about diamonds in terms of AI picking up more junior tasks. I think you're setting out to fail because I don't think that with any degree of confidence, you can design an org structure that with hand on heart, you truly believe is fit for the future because there are just so many unknowns and the speed of change is so, you know, so rapid and so massive that actually you can't predict it. So you've got to move to a place where you've got the maximum flexibility to be able to, you know, morph and change and and adapt to whatever's coming at you because you you just don't know.

I think that's really interesting because I know so many firms who are trying to do that at the moment. Mark, what's your perspective on that?

I I think it's the nature of the problems that consultants get asked to answer today versus ten or fifteen years ago. I think the world is more agile, and we want answers quicker. Right? We we don't want a waterfall project of let's go do...

You know, whether it's an implementation, we're gonna do our our design or requirements gathering, our design, development, configuration, implementation, or a a strategic or operational, project going the same way. People want answers before they even ask the question. So I think the the nature of the question consultants are getting asked to help out with today requires this flatter, more nimble, more agile approach. And and that is contributing, I think, to the flattening of the organization because you have to be able to move quickly.

You have to have that expert. Right? That senior person in the room with the junior person figuring out the questions to ask, the...

You know, what the answers are and putting the deliverable together, and and you have to do it quickly. Right? It's...

These aren't, like, six month, three month projects anymore. It's, hey. The the client wants an answer in two to three weeks, and I think that contributes to, you know, to to the flattening.

Obviously, Simon, you don't have, like, junior roles by the fact that the organization is flat. It...

If you did, would you be using technology and AI to replace some of that work? And if not, are you actually using technology and AI within your role to sort of, like, turbocharge everybody who's, you know, out there working with clients?

Yeah. Sure. So so we are... You know, we've been deploying AI now for probably proactively in a strict way for about fifteen months. So... And it is, you know, as anyone I'm sure on this on this call is aware, it is dramatically changing the day to day tasks and the the workflows and things like that.

What having an absence of a structure has allowed us to do is we just take it in our stride and go, alright. So I'm now doing some different stuff and I work in a different way.

You know, I I think some of the thing... Other components, I guess, that that we also... You know, we don't have job descriptions.

So, yeah, we... Whilst we've got a flat structure, we don't give anyone a job description. We don't give anyone any KPIs on targets. So when these, you know, significant shifts in the in the environment happen, we don't need to dig out a load of job descriptions and start changing them and getting approval and things because there's nothing to change it. It's that sort of... It is it is so flexible. We saw it during COVID. You know, in first first two weeks of COVID where, you know, anyone who's running consultancy was probably getting phone calls, counseling, pro... Programs, and and projects.

We we experienced out absolutely the same. What then happened is, you know, we were able to adapt and the whole team then took on effectively a sales role and go, look. Just go and talk to your network, see what's going on out there.

If you're in a defined role where actually... Well, you know, I'm a deliverer. I don't do sales. I'm just gonna sit there until someone wins a project and then go and work on it because you've not defined how much of x and how much of y each person should do. It gives that flexibility and that adaptability in in a very short space of time.

Is there anything that you look at a classic pyramids or even a diamond shaped firm up with some level of envy or you look at it and think, oh, I'd... Along for those days, is there anything that, like, existed that you would love somehow to bring back or or are you a full convert?

I think, you know, I'm sitting here as a as a massive advocate of flat self managing, and I think it's self managing is is important to put alongside flat structures. So, yeah, this isn't...

You know, we're not saying, you know, I make all the decisions and we've just got a single layer, you know, beneath me. I'm not I'm not...

You know, basically, all the the autonomy has to be pushed into the into the flat structure. The...

It's not perfect. No organizational structure is. And I think whilst one benefit is we don't need to go through layers and layers of meetings in the organization to make decisions, sometimes there's always that element of I I feel that sometimes we could move faster if I was more dictatorial on certain occasions in terms of, you know, actually, we just need...

This week, we just need to do this. But, actually, you've got to sort of coach the coach the team to get to the arrival. What happens then is the decision sticks and it lasts and it doesn't get disrupted, But sometimes it takes a little bit longer than maybe it would if I was, you know, just cracking a whip and and telling everyone exactly what I thought they should be doing this week.

And building on that, Mark, I'm not asking you to be the pyramid hierarchy cheerleader here at all if it... If it's if it's something you don't agree with. But, like, do you feel like with the businesses you work with, there's certain scale or there's a certain point where it makes more sense to maintain that hierarchical, not self managed structure?

Yeah. I I think as you scale...

I I don't know if the number is, you know, when you hit 500, 750 people, but but it's it's not when you're at a 100 people. Right? It's it's...

As you're you're growing, you're gonna need just a little bit more command and control, right, to to keep an eye on things. You're gonna need more of...

Again, what I always call the the managing partner role who's managing a portfolio or it's a practice lead who's managing a portfolio and and building experts underneath him or her, right, that that grow the domain. So if you're a smaller organization, there's a leader of the organization, whether it's the the CEO, the managing director, whatever the title is. Right? And they're building expertise underneath them.

As you get to 250, 350, 500 people, you just have to replicate that a little bit, with the the leadership over a a domain. But you're still, I think, fundamentally compressing underneath that practice lead the hierarchy. Right? Because it's people wanna contribute.

They they don't want this long apprenticeship of seven, ten, twelve years before they become the expert. They wanna contribute today. Right? And I I think that's a change in the the culture, you know, from Gen X, and and I think we ushered some of that in.

But I think beyond Gen X, they wanna contribute sooner, and and they don't wanna sit in the backseat for them for too long.

So one of the things you mentioned there was, like, no KPIs, I think you said, and no job titles. So where do things like ops, finance, things like utilization, margin, where how do they... Where do they sit in a self managed flat structure?

So ops from a... You know, in terms of a con... Convention doesn't exist.

So there isn't any sort of central resourcing person or team that decides who goes and does what.

You know, that's pushed into the team and, you know, an opportunity comes up and someone will share that on a on a team's channel or whatever. Our people are available who have skills in that area will we'll go and participate in that if they're... And and and we'll figure out how to form the best the best team for it. HR, we don't have an HR person or or anything in that sense.

What we do have is we engage the services of two external, what you probably know as executive coaches.

So everyone in the team has access to a monthly session with an executive coach where they talk about, basically, they want to. They can talk about their home life. They can talk about their work life. Arguably, if your if your home life's stressful, fix that because you're not gonna be concentrating on work otherwise.

So...

But that's an entirely confidential service that they get they get access to so that they get that sort of confidential, secure, supportive role to allow them to to figure out how they might, you know, deal with difficult situations with the client, with some colleagues or whatever. And the reason we did that is when we reflected on...

Well, actually, if no one's gonna have a manager, what are the functions that people need from a manager that we need to replicate in somewhere and provide in a different manner? Now, you know, I'm sure we've all experienced managers who go, yeah, I'm I'm here. I'm I'm ready to coach you. And you...

But...

And and the following week, we're gonna do your performance review. It's very difficult to sit down with your manager and be really open and transparent and say, well, I think I've got these four development needs. And then on the flip side, I think I'm doing an amazing job, and I think you need to give me £10,000 or dollars more. You you...

The two are in conflict. So you see, you can't really you can't really do that. So what we wanted to do is make sure that people had had the best focused and personalized support to allow them to be the best person they could be in the organization without having that conflicting and and getting mixed with any sort of performance management aspects.

What about on the KPIs side of things?

You know, you you... Hat Mills are a really good sized business. You know, you've got great top line numbers. No doubt the business is successful both in terms of, like, the brand and the external perception as well as how you're running it. So how how do people make sure that things like scope creep doesn't happen because they've got margins to maintain or work is priced correctly so that you're not underselling it. So, again, you've got financial health.

Yeah. Sure. I'm not sure if this is a a sort of a a segue into promoting CMAP or not at this stage, but No.

It's not.

Definitely not. CMAP.

You know, so we so we do track profitability and utilization and things like that on a team basis.

We we tend not to look at it on an individual basis. And the reason we tend not to look at it on an individual basis is I don't believe that an individual's utilization is generally a function of their capability.

It's more... It's far more a function of were they were they free and available to start to work on a project when it when it kicked off, or have they been unlucky and and things like that. So, yeah, I think we can read... You know, businesses read far too much into individual utilization targets and try and manage people. Most people who are who are are less involved in selling work have very little opportunity to to influence that that percentage number is is my belief. Other than, obviously, if you, you know, you can build your skills and be more adaptable and more universally useful on different projects that the firm might do. But directly, if someone turns up and go, Ben, next week, you need to get utilization up, you're gonna go, well well well, great. How do how do I do that?

I actually... So... Well, thanks for mentioning the same thing, but I I kinda meant meant it more like more philosophically. Like, how do you get people to care about that sort of stuff? Or actually, by the sounds of it, it's because it's not on an individual basis. It's not really on an individual's radar, and it's more of an output of just delivering great work. I don't wanna speak on your behalf, but I'd love to answer more of that, the the philosophy behind it and how you maintain good finances when it's not necessarily KPI ed.

Yeah. Sure. So what I've tried to do is replicate the simplicity of a a consulting one man band. So if, you know, when... You know, if you go and set up on your own, it's really simple. Find a client, do some great work, get paid for it.

How do you replicate that simplicity as the team gets to 10, 20, 50, a 100, 500? The the concept remains the same.

I think, yeah, there's a there's a danger and a risk that consultancy firms make it far more complex and complicated than it needs to be. One thing that you need... Do need to have though in the same way that you do when you're a one man band is that transparency and clarity of information. You know? As a one man man, you know exactly how much revenue you're bringing in per month. You know exactly where you are in in terms of your profit and how much you need to make to pay your mortgage and all your all your outgoings.

We've got exactly the same thing. So, you know, one of the things we've done, you know, another plug for C MAP. One of the things we've done in in C MAP is everyone has full access and full transparency to every piece of data that's in C MAP. You know? And, you know, and we did that from the from the get go in terms of the, you know, how how we set the rules up. The word... There's no need for any permissions. Go and have a look at whatever you need to do because we need you to make the best decisions for the overall success of the firm.

How can you expect anyone to make great decisions if they don't have great information and transparency of information to to base those decisions on. So transparency of of information is is critical.

Mark, let's bring you in here.

Have you worked in a... Or with larger firms who've got that same level of transparency, or do you see it more in the SMB boutique space?

I I think probably not as transparent as, as Hat Mill might be, but but I think people are making things more transparent and getting more information out there because because there is this just fundamental understanding that the more people see and and understand, the more they can contribute to to to managing it.

You know, I like Simon's concept of of not putting, you know, KPIs on individuals.

I I have not seen that in too many places. I, you know, I think you have to have... In in my opinion, Simon, you you have to have a pretty senior tenured mature group where everyone is motivated to be the individual partner, right, to to succeed and and drive. And and I've seen organizations try that, and their hiring practices are such that they may not have all the right people in place to to do that. And so I see a a balanced scorecard, where, okay, your utilization utilization is lower, but, hey, your revenue contribution and revenue growth is is higher. And so it's it's not meant to be a hammer on people, but it's meant to understand how's the individual contribute to the practice leader's overall success.

Have there been instances, though, in a more hierarchical structure where, actually, you've seen things like focusing on utilization, focusing on margin drive results or or the opposite?

Ultimately, you know, the organizations I've run and then where I've consulted, I think to Simon's point, the metrics are on the leaders and on the managers. Right? And and they're responsible for ultimately generating the revenue and getting people billable. But I think by measuring the individual, you you start to see where they contribute.

Right? Hey. This person's billable utilization is low, but they always seem to be around when we're generating new revenue. So you start to...

I use the metrics, recommend using the metrics to see what contribution is the individual making to the overall practice and then measure the leaders on, okay. Are you are are you hitting targets that are gonna make us profitable, or are we not hitting our profitability targets because global utilization is low and we have too many people on board?

Simon, one for you. I completely appreciate that if you're in delivery, you might not have a great control over what you're gonna be working on. Out of interest, do you ask people to do, like, other productive non billable stuff like business development, networking, does that play any part in, like, any sort of measurement in the business?

Yeah. Sure. So, you know, obviously, it...

It's easier to sell if you've got a nice back catalog of projects that you can go to a client and talk about and things like that. You're not gonna get that from a a 21 year old straight out of university. You know, there...

There's no expectation of that. So, yeah, absolutely, you can move into place. But I think it's also true that often we get people who are vastly experienced and maybe thirty years of experience who also aren't great at selling consultancy. And often in the in the...

So the pyramid and partner structure, they struggle to get to partner. They beat...

They become a, you know, a a delivery expert at director level.

I always think that's rather unfair because, obviously, quite often, clients are really, really get the value from those individuals, yet they're, yeah, they're limited in terms of where they can progress in the in the organization. So, yeah, it takes all sorts of personalities and skill sets. And if you don't have a structure, it's easier for those... All those different range of skill sets and and capabilities to sit more comfortably alongside each other rather than trying to fit them into different defined pigeonholes.

Do you have to spend much time on things like financial literacy or understanding data given everything is so transparent, or do people just sort of, like, pick and choose what they get insights into?

So we get together as a company every six months for three days, a three day off-site.

There we... And and he said that frequency, we really present sort of detailed financial data and performance information. We we report monthly on how we've done in terms of total revenue and and profitability, but that's about it. What I'm trying to avoid is people knee jerk reacting to KPIs because, you know, consulting is a is a long term sine wave. And if you try and knee jerk, you know, from one Monday to another Monday, you start to... You... You've got a real problem. Everyone's going from one side of the boat to the other, and that's that's not a a a great place to play.

And it's... But it's through those sort of whole company presentations that we started to get people to develop their understanding. Now lots of people come in from very experienced roles and understand the balance sheet and the p and l and the mechanics of how a consultancy works. Lots of people come in with very... Much less experience that we do need to educate, and that's a gradual journey as they go go through their their consulting career with us.

Gonna move on to the final topic, which is sort of exploring maybe the mid longer term of the org structures and shapes that could exist in boutique consulting firms. One of the things that came out in the comcom we ran in May was some fears around whether there were enough opportunities for junior talent if the old structure is changing. Mark, I'll come to you first on this. Like, have you got observations in the firms that you're working with around, like, reductions in hiring of junior talent? Like, is there challenges around the skills that they they need so that the business gets what they want in terms of, like, capability, but knowing that some of those roles will essentially be technology or AI leveraged. And then, Simon, come to you after.

Yeah. I I I think... I mean, I think people that have been hired in consulting have always been somewhat type a, right, somewhat driven. But I think today, you have to be more of a self starter as well. Right? You've got to experiment. You've got to innovate.

You know, my entree into AI was because of someone I work with who's twenty years younger than me. Right? And they were experimenting with it to to the point where they were becoming an expert, and and they pulled me along. I So think as as firms are looking to hire at the the entry level, they're looking for more of the innovators and people that are willing to try new things than they are necessarily looking for, you know, that person who was at the top of their class coming out of undergraduate. Right? It's it's somebody who's a little more entrepreneurial, a little bit more creative maybe than than they had been looking for in the past.

Has it changed anything of your hiring plan, Simon, or the way that you think about the workforce coming into Hat Mill?

Not really. No. I mean, obviously, we we tend to hire when we when we see certain skill sets getting highly utilized, and we need to add more to to give us more capability in that team. I think the the the the way I try and think about sort of the advent of AI and how it's how it's changing, I sort of go back to, you know, when when spreadsheets came out in terms of, you know, Lotus one, two, three or, you know, if you're old enough to remember that or or excel.

You know, at that point, if everyone was working in finance, they were still working in big ledges and and writing numbers and working them out on calculators and all all that sort stuff.

Spreadsheets revolutionized that, and, you know, we're not gonna need all these account... Well, we don't seem to have any any fewer accountants nowadays than than we do because of because of Excel. I I think the similar can be said about AI. You... The people who are better engaging and getting the most out of AI tools and techniques probably aren't people of my age. And, you know, that that Gen X generation, absolutely, is leveraging our time and we're able to do a lot more than we ever were in in a day. But, actually, the people who are in there getting into developing GPTs or projects and, you know, really advanced tools tend to be much younger than I am because they didn't get the hedge around it and and they're leveraging it more. So I don't necessarily subscribe to the we need less juniors in in that sense. I think it's... You know, you get a different attitude and approach and that can that can contribute to the firm in a different way.

Do you... A quick final one just come to my head, and then we'll move to q and a because there's a lot in there, and I wanna get those across to you. But do you think if you were in a hierarchical pyramid based consulting firm, it would change?

I know I'm asking you to be sort of theoretical here rather than within your own practice.

Yeah. Sure. I I think it would have to be because, you know, the, you know, a a pyramid or a diamond or whatever it is, if you're if you're gonna go out there and and produce a a written job description and a utilization target, you know, effectively, you have defined exactly how you want that role to work and how you want it to perform.

When you've got something so transformational as AI landing, it it it... It's only logical that, you know, if you've defined everything in that way, you need to go and redefine it because, you know, it there's... It's too bigger change to to just sort of think, well, filter through and we'll we'll see how it goes.

So... Yeah. And and that's the danger, I think, in being so definitive in terms of how all the bits of the parts of the firm plug together and produces a functioning organization.

Let's move to q and a because I only got a few minutes left. So first one for Simon. Who's responsible for HR compliance and administration? For instance, who ensures legal requirements are met in job descriptions, which will be a challenge given, I guess, you don't have them, but ensuring pay equity, etcetera.

Sure. So few parts to that, isn't that? We do have a business support team that perform our admin, so that includes a finance control who looks after...

And then they're they're supported in terms of doing invoicing and other sort of, you know, other aspects. We outsource quite a bit. So any legal advice is we, you know, we use a firm of of legal advisers. We outsource our IT.

So that that doesn't sit in. So, you know, we're we're quite lean internally in terms of the the center of ops. Moving on to the point around pay and performance reviews and things, the team hold each other to account on that. So we have, as a minimum, six monthly feedback sessions where anyone who's worked together or had an experience of working together sit down and have development and feedback conversations.

They score each other based on two metrics. One is what should be in your performance based on my expectations of you, and what are your behaviors relative to our seven values? Values are things like, you know, we we we are one team. We always deliver great value to the client.

We're always honest with our clients, things like that.

So then you get these metrics, and those metrics then feed in in terms... Without getting into too much detail, how much pay goes up by is based on our gross profit that increases the overall pay pot, and then it's the allocation of that increase that is determined by people's feedback scores, which they get from their colleagues in a three... Typical sort of three sixty feedback way, which is designed to help people improve, but also give them a scoring metric that can feed into reward.

I like that, particularly the gross profit bit rather than necessarily top line revenue. That's cool.

Which is fine if gross profit is going up by more than inflation. It's it's a bit tricky when it's not.

Right. Right. We don't need to delve into that in too much detail.

When you're flattening the company's teams that run as individual small businesses, what is the incentive for the team members not start their own business? How do you keep turnover down?

Simon, you say that first, then, Mark, if you've got any experiences sim... Relating to that, feel free to chime in.

Sure.

I I don't think that's any different to people going for partner because, you know, you generally got that scarcity of role, and it's a... It's an up or out type environment and people people jump out to do it. I think the reason that people go and start their own firms is because they've got that... Either that entrepreneurial spirit or the the burning platform effect of I'm so frustrated with how this place is working. I can go and do it better myself. I don't think internal structure and culture causes that as much as the other two. Yeah. Fair comment. Mark?

Yeah. I I would concur. I I think if somebody wants to do that, they're gonna do that regardless of the height or flatness of the organization. I think by flattening the organization, you create opportunities for individuals to, you know, to take ownership, to to take drive, and and do it within a a larger organization. So they do have some support structure. They do have... In The US, they they they would likely have health care benefits that would be harder to get if they were to go out and and start their own firm. So, you you create opportunities for people to grow in a larger organizations and and, you know, and be part of something bigger than themselves.

And and the folks that are gonna wanna do it on their own are are probably gonna go do it anyways.

So before we go, again, a reminder to the audience, there's polls participating and hopefully see the answers. There's one that I just wanna draw Simon and Mark your attention to and maybe get a comment on before we finish the session.

It's how is AI changing the need for junior staff? 34% have said they're hiring fewer juniors.

29% is changing what juniors do. 20% is too early. 17% no change. Nobody seems to be hiring more juniors, which I think for me is quite interesting. Any any... Well, any thoughts on that? And if not, final... Any final remarks as we wrap up the session?

Quick thought on that, at least from the North American perspective is, I I think part of that's driven by the economy here as well. And, you know, the the headwinds that everybody seems to have faced over the past twelve months, coupled with the arrival of AI, has enabled people to try and get more done with less people, less expense. I see that changing probably over the next twelve to eighteen months. I I don't know that, you know, the floodgates will be opening for hire more more juniors, but but think some of that is the economic headwinds right now coupled with the arrival of AI that's enabling folks to to get it done without people.

That seems a very sensible, and I agree approach. Simon?

I'd I'd agree with that with Mark. I think you you case... You're probably similar.

I think the other thing I'd add is we are in the middle of it... Of the transition. So people are still figuring out what this means, how it changes everything. And and typically, when you're in the middle of a transition as a leadership team, inertia is the easiest choice.

And therefore, it's easier just not to hire and see when you... Where is this going to land, where is it going to settle, and then we'll make our decision. And I think what we'll see is that sort of dip at the moment. Then when we figure out, well, this starts to look when we're in a more mature place, if it's indeed in ever matures or or we just on a, you know, a massive conveyor belt to... That... That's never gonna stop. Who knows? But when I think it settles, then I think we'll see what the real the real situation is.

Yeah. That's some good context from people who are living it. Just to supplement that, there's the sort of inertia around no change around what to do in your own business. I was at a conference recently in North America where, I don't know, a 100 plus professional services leaders were talking about where they're not generating pipeline, where they're not winning business.

And the main thing they're losing to is their clients not doing any...

Anything. So there's inertia across several parts, only in the business, but also the businesses and the clients. And then second, obviously, to that is the clients themselves doing it themselves through AI. So I do feel like we're in a little bit of a moment of flux where everyone's trying to figure it out.

Mark, Simon, as always, absolute pleasure to talk to you both. Thanks ever so much for sharing your insights. Simon, fantastic as always to to hear what you're doing at Hatfield. Mark, thanks for all of your insights across all of your clients.

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