Two hours after meeting Steve Ellis, and I'm struggling to recall what he looked like, apart from bearing a vague resemblance to Tom Watson, the veteran American golfer. And I am sure that is exactly how he would like it. The worldwide managing director of Bain & Company, the world's most respected consulting company, expects his operatives to move fast and furiously, but also secretly, affecting change while ruffling the fewest number of feathers.
Mitt Romney, the Republican presidential candidate, is probably Bain's most famous old boy. But the rest of them are rather anonymous like the characters in The Adjustment Bureau, but without the pork-pie hats. His staff of more than 5,500 in some 30 countries is famous for working long hours. When I met my wife she had a boyfriend who worked at Bain, which is how she became my wife.
Despite their clone-like appearance, Mr Ellis and his men (and women) enjoy the frisson that goes through a building when the workers learn that Bain has been called in. "We don't come in unless there are big issues to be faced," he says. "When we come in there is certainly a bit of a buzz because there must be something important enough to bring in resources like ours."
The Middle East is "strategically very important for us as a firm". It has been doing work in the region since 1993 and formally opened offices in Dubai in April 2007.
This has been one of the fastest-growing markets for Bain, which has doubled and tripled the size of its operations in four years, and now employs about 100 people. We talked to Mr Ellis about the economic crisis, going slow to go fast, and the prospects for future recovery.
It seems to me that consultants have come out of this economic crisis unscathed. Journalists, credit rating agencies, bankers have all been blamed. But surely it's the fault of the management consultants, who put the whole structure together in the first place?
The work that we do is focused on results, not reports. We don't want to leave a nice shiny booklet, it is not until we achieved the goals the management wanted that you could declare it a success. For 40 years we have been investing as the firm that really knows how to get results when it matters. Our focus has been on targeting the right kinds of clients who are committed to driving change, not just rubber stamp. They are willing to do the hard work to out-compete those who get in their way. We also constantly innovate because we are focused on getting results. We put our fees at risk; 60 per cent of revenue globally comes from firms where we have our fees at risk. This gives us a benefit of an audit at the end.
Give us an example of a typical project.
It varies widely, but we might work for six months, let's say. Some have gone on for many years. Before we start the project, we are very clear as to how the management team defines success. We ask them: what outcome do you want, how are you going to measure that we have achieved what you were after? Having got that, we work through very collaboratively, then after a month, put together a fee structure that will put 30 per cent, say, in escrow until the end of the project.
What is your view on the interminable economic crisis?
I don't know if you'd call it the GFC [great financial crisis] 2.0. Far from me to be able to predict where we're headed, but it does seem to me that we have found ourselves in a situation where the policymakers are the ultimate drivers of our economic destiny. And that's true in the euro zone, the US and China. It's all about policy. The capital markets and people who invest capital and liquidity are sitting there saying: how can I make decisions? How can I underwrite risk, given how much uncertainty there is? It's a very strange place to be. Until we get through these milestones where the policymakers hold all the cards, I think we are going to be in a very volatile, uncertain global environment.
But surely they are only holding the cards because they are holding the debt? This is private debt that became public because companies and banks could no longer pay it back.
Yes, but what we have to do is resolve the public and private debt problem. Public debt is also private debt, because it's the taxpayer who will have to pay it back. What we have to do is delever the global economy. That is going to require considerable pain. Who is going to share the pain? Is it Greece? The banks? The Germans? That is going to take some time. Our outlook is that there is risk of recession in euro zone and US. Developing markets look better, but they cannot go on their own.
Are you optimistic for the future?
When we get through structural transition, that might take 18 months or five years, as soon as people holding capital strings see structural solutions are in place, even if they are not resolved, then I think things will kick-start. And once we get through fear and uncertainty, I think there is a lot of dry fuel for the global economy to return to healthy growth rates. One of the things we are advising our clients is you better be focused on that picture and not totally consumed by what's happening in the next couple of years, because you know what, there's very little you can do to affect it. But companies that have the foresight to look beyond and invest will accelerate out when the economy recovers. The sooner we anchor on what is on the other side of the crisis, the sooner we will get out.
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