True North Management Consulting

MBA Consulting: Strategy, Finance and Operations

Starting in the spring of 2006, MBA, a business process consulting firm focused on the commercial real estate sector, engaged True North to provide a variety of consulting services.

Strategy

When True North was invited to provide strategy consulting to MBA, MBA was in danger of becoming a niche player whose specialty was moving towards irrelevance due to shifting industry conditions. MBA had been seeking to address this issue by trying to diversify into other industries. Results, however, were mixed, and MBA was having difficulty selling engagements outside of the real estate sector.

After an internal strategic review with True North, MBA refocused its efforts to the commercial real estate sector where MBA’s core strengths could provide it with the strongest sustainable competitive advantages.

To escape its position as a niche player in a shrinking arena, MBA has been building strategic partnerships in separate but related areas of the industry. True North advises MBA on an ongoing basis as they explore these alliances, helping MBA tackle issues around: structuring alliances; partnering with multiple firms that compete with each other; and balancing MBA efforts to adequately foster these partnerships without under-investing in other areas critical to the company’s success.

Results

MBA is quickly creating a more diversified and robust sales pipeline, thanks largely to partner referrals. Equally important, MBA is rapidly moving towards a far stronger strategic position that allows it to keep a tight focus on leveraging its core competencies, while giving it the flexibility to participate across a broader swath of the commercial real estate sector.

Finance And Operations

True North is in the process of designing and implementing several systems to assist MBA in the management of its finances and operations.

MBA relies heavily on third-party contractors for its work. These contractors are engaged on a project-by-project basis with contractors receiving different rates depending on the project and the contractor’s role.

Before True North was engaged, MBA paid contractors fixed rates that were generally above industry standards. Furthermore, separate contractors received the same rates for a given role regardless of the individual contractor’s tenure with MBA. This lead to situations where MBA overpaid contractors whose work was unproven and at times was sub-par.

True North provided MBA with a more performance driven rate structure for its contractors. With this new structure, MBA now pays contractors lower starting rates, but allows for rate increases as contractors gain tenure and prove their ability to provide high quality services to MBA.

Simultaneously, True North is helping MBA implement performance management systems to evaluate both projects and individual contractors.

Results

Using the new pay structure, MBA’s profit margins on a recent engagement increased by 50%. Moreover, contractors remain satisfied with their pay and now have additional incentive to work with MBA; additional work is rewarded with higher pay rates. Finally, with the new performance management systems, MBA will be better able to evaluate the results of its projects and contractors. With a better understanding of results, MBA will be in a position to better understand how to maximize its returns on investments.