When the chips were down in the 2001-2004 consulting recession, PA Consulting Group was one firm that continued to recruit and prosper; now in the resurgent market of 2005 PA is really thriving. Mick James, former Editor of Management Consultancy magazine, spoke with Nick Hughes – PA’s global head of Life Sciences and Healthcare – to find out the secret formula driving success at the firm.
There are many ways to cut the consultancy cake, and many of them have more to do with historical than any sane approach to the market. I’ve yet to see a stand-alone consulting firm try to buy a chip manufacturing plant or set up an audit division, for instance.
PA Consulting Group has one of the more unusual takes on the market, with a consulting front end backed up by a substantial technology and innovation capability. This strategy has worked for 25 years and it remains a crucial part of PA’s market strategy, as Nick Hughes, PA’s global head of Life Sciences and Healthcare, explains:
“PA is not an accidental construct, it’s the result of an act of will to operate in particular marketplaces,” he says. “PA’s genesis in the 1940s was in the organisation and methods techniques which later translated into much more sophisticated tools. Now we provide a complete set of consulting services from the boardroom to the factory floor.”
This unique take, Hughes believes, puts PA into the “sweet spot of strategy and business consulting. We describe ourselves as a management, systems and technology consultancy,” he says. “We know enough about technology to create solutions that really work as our clients need them to. If you can’t make things fast enough or cheaply enough we can understand what you’re trying to do and say, let’s build it together from a blank sheet.”
This “real tangible consultancy” often goes beyond simply reacting to client needs into taking leadership positions in research and development.
“We’re a little ‘R’, big ‘D’ organisation; we combine emerging and existing technologies in extremely creative and pragmatic ways to deliver novel client solutions,” says Hughes. “PA also takes innovative positions to address unmet market needs.”
One example is in the life sciences area, where PA has taken its own line on the use of RFID chips and barcodes to counter drug counterfeiting. Rather than attempt to use RFID to track the entire supply chain, PA has created a system where drugs are given unique identifiers and registered with a PA database. Then these drugs are dispensed, in the pharmacy or hospital, and scanned using PA-designed technology, to confirm their authenticity. This system also facilitates other opportunities such as manufacture recalls or avoidance of dispensing errors. The technology is being developed by a venture subsidiary, Aegate. A previous venture, the drug delivery technology company Meridica, was sold to Pfizer last year for $125m.
“PA has a very risk-hungry view on the market; we’re taking bets and investing not inconsiderable sums in our ventures portfolio,” says Hughes.
The confidence with which these bets are placed stems not just from PA’s technological resources but also the much wider view it takes of the global pressures on the pharmaceutical industries. These feed not just into the detail of areas such as supply chain, drug discovery and diagnosis, but also into much wider projects.
“For example, we’re involved in healthcare reform in Eastern Europe and for that you don’t need to know science, you need to understand the geopolitical landscape. Increasingly, PA is working in integrated teams where consultants from multiple practices are seconded to work in a “virtual sector practice” with industry specialists.
“We have access to a huge conflation of talents and many of these skills are eminently portable from sector to sector,” says Hughes.
PA’s current focus is as much the result of recent history as its early roots:
“We survived the recession because we were – relative to the big 5 – smaller and more agile with top quality consultants” says Hughes. “Building on these foundations, our ambition is now to take on work of strategic and national importance in the pharma and healthcare sectors, amongst others.”
“We have learnt a huge amount from our colleagues working in the government sector, where they are leading the way.” Their approach has taken PA from being a mid-tier player in the government sector (“Then – if we won a £1m contract we’d bring out the bubbly” says Hughes), to being the largest operator in that sphere. Increasingly it means that PA is also getting the pivotal programme management roles in the consortia that public sector clients now demand.
“Our programme management and change management work has given us a reputation for delivering challenging projects under difficult conditions. Where we’re different in the marketplace is that we’re more than capable of delivering a gold-plated SAP solution but where we tend to excel is in the delivery of complex programmes rather than simply packaged solutions.”
One area that PA steers clear of is the provision of outsourced IT services, preferring instead to advise on, and run, the outsourcing and change management process, and manage the subsequent supplier relationship in order to ensure the business benefits for clients.
“That’s partly because we don’t have the appetite or the balance sheet but partly because of the ethical conflict,” says Hughes. “We won’t buy someone’s IT and sell it back to them because of the impact on the client-consultant relationship.”
The importance of relationship-building means that PA looks for what Hughes calls “T-shaped” consultants:
“The leg of the T is that deep knowledge, the bar of the T is all the other things that they bring to the party, such as interpersonal skills,” he says. “The best consulting is done with clients, not to clients. They want to know you have an opinion – they don’t want it rammed down their throats.”
