McKinsey's acqui-hire beefs up digital cred on Madison Avenue
- Summary:
- McKinsey is the latest big ticket management consultancy to beef up its digital talent pool by means of a crafty acqui-hire.
[sws_grey_box box_size="690"]SUMMARY - McKinsey is the latest big ticket management consultancy to beef up its digital talent pool by means of a crafty acqui-hire.[/sws_grey_box]
Interesting to note management consultancy McKinsey’s somewhat low-profile acquisition of Agiliti to strengthen digital marketing proposition for the firm.
Agiliti was a digital management consultancy set up by Jason Heller, who will join McKinsey as Global Lead, Digital Marketing Operations. This will be run as part of the wider McKinsey Marketing & Sales Practice.
Heller’s told his existing clients that the fit with McKinsey is a strong one:
Agiliti has been collaborating with McKinsey for several years. We've had a chance to get to know each other, ensure that our philosophies, approach to problem solving, and most importantly, our vision for our clients' success are aligned. We've created something unique, and joining McKinsey gives us the global scale to serve clients in new and innovative ways.
Heller’s got good form in the digital marketing game on Madison Avenue and it’s likely that getting him on board has been one of the prime movers behind McKinsey’s acquisition. Jacob Gordon at analyst firm Technology Business Research (TBR) characterises this as an ‘acqui-hire’:
The core driver of the Agiliti acquisition was to acquire the talents of Heller, an experienced digital media executive with an extensive background in digital media strategy gained through his entrepreneurial efforts and time as managing director of Horizon Interactive.
Heller’s background in digital fits McKinsey’s management consulting DNA due to his reputation of focusing more on digital-marketing operations strategy than being a technologist, meaning he can provide a white-glove service with big-picture perspectives to clients.
Digital Brand Strategist Peter J Thompson is interesting on the topic of the acqui-hire by management consultancies moving in on digital marketing when he notes:
The latest way of getting into innovation consulting is to acquire a small agency doing the opposite of whatever the acquirer does and bolting them onto the mothership. This is an acquisition for the purpose of hiring new staff (now known as an “acquihire”).
If it’s handled well, an aquihire can be awesome way of hitting the ground running. But more often than not, the skunkworks is soon gobbled up and lost.
Nonetheless while the deal isn’t apparently regarded as big enough even to warrant a mention on the McKinsey website, TBR's Gordon reckons that it has longer terms implications for the consulting giant as more and more big ticket consultancies chase a slice of the digital marketing pie:
McKinsey is playing catch up to its Big Four competitors, including Deloitte, which has made numerous digital-focused alliances and acquisitions in the past year, including the purchase of agency Banyan Branch in 2013. Deloitte’s digital investments have paid off so far, as the firm’s revenues are estimated to grow 6.6%, greater than McKinsey’s 5.2% estimated 2014 growth. Other competitors were also active in 2013, with Accenture picking up Acuity Group for $316 million and PwC acquiring Florida-based agency BGT Partners.
We anticipate McKinsey will ramp up digital-focused acquisition and alliance activity through 2015 while targeting smaller tuck-in acquisitions and acqui-hires that can be easily integrated into the company with minimal disruption to its culture. However, to truly compete with the most forward-thinking of the Big Four, McKinsey will seek out more transformational acquisitions such as midsize digital agencies or technology-focused marketing consultancies.
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For marketing cloud vendors, building relationship with the big consultancies and systems integrators is increasingly important, as Adobe CEO Shantanu Narayen comments:
Systems integrators are seeing the marketing automation is a huge untapped market. I think they’re going to see competition as it relates to the traditional systems integrators and companies like Deloitte or PWC also enter that market.
From our point of view as a technology provider none of these relationships are competitive as they’re all using our technology to go implement and automate marketing flows within all traditional industries.
Marketo CMO Sanjay Dohlakia observes:
An additional dynamic is that the customers are pulling this. A lot of what we preach about is the customer being on a self-directed journey before they reach out to a brand. They become aware of the marketing technology market and then they go to the big SIs and say ‘how about this?’.
The interest of the likes of Accenture is a good thing, he adds:
As they develop their practices and become more mature in the market, there is no question that they will be on the front line for a lot of the conversations with customers. That will be good for everyone. It will be good for Marketo.
My take
The big SIs took the likes of SAP into the corporate boardrooms in the 1990s. One indicator that cloud was going mainstream was when the likes of Accenture and Deloitte decided it was time to sponsor the likes of Dreamforce.
As the big ticket management consultancies eye up the creative heart of large enterprises, relationships with marketing cloud vendors complement the development of their home-grown digital talent pool.
A neat little gambit by McKinsey here, if not one that's grabbed transformational headlines.