Consulting network launches private equity practice
Affiliates of consulting network Internal Consulting Group (ICG) have formed a Sydney-based private equity practice.
ICG was started in Sydney in 2011 by business consultant David Moloney who previously led Oliver Wyman’s activities in Australia and New Zealand.
Moloney had pioneered accessing special skills by linking with outside experts over a long business consultancy career.
He recognised that there was a growing pool of independent business experts in Australia and New Zealand but no umbrella organisation to market their services, or to help potential clients find the expert they needed for a specific task. Meanwhile, many larger companies around the world were trying to access these experts by setting up their own internal consulting groups.
After leaving Oliver Wyman, Moloney decided to set up a professional association to represent independent management consultants and experienced business executives. He decided on the name Internal Consulting Group to indicate an organisation of experienced consultants that would provide services directly to clients with a high degree of flexibility. Clients are able to select individual experts from the entire ICG network. They are also able to access ICG’s portfolio of packaged ready-to-use consulting products which the organisation says reduces risk and saves time and money.
Moloney says the ICG process, which has patents granted and pending, is a form of “industrialised adhocracy” (as opposed to bureaucracy) which provides scalability, reliable quality, flexibility and agility. The ICG model breaks down the pyramid structure of large consulting firms and allows clients to determine the mix of internal and ICG experts to use for a specific task, along with the intellectual property and methodologies they need – all from a global platform.
The pyramid structure of large consultancy businesses has been unchanged since the 1940s, he says. Typically, it involves clients dealing with a partner near the top of the pyramid who delegates most of the work to juniors further down the structure.
ICG, however, enables clients to directly access the expertise they require; anything from CEO-level experience to specialties such as establishing an online retailing operation. Services are charged based on the rates of the individual consultant engaged and only for hours worked, which can be as short as half a day or as long as a year.
ICG claims its model provides significant benefits to independent consultants and small consultancy businesses. ICG fosters a professional community and quality-assured environment where affiliates can choose to collaborate and support each other’s clients, either as ICG or using their own brands. This provides the scale and depth individuals and boutiques lack, while preserving their flexibility and specialised expertise. Affiliates can therefore build and monetise franchise value within a global market place and eco-system ˗ a major challenge for small boutiques.
ICG private equity practice lead John Young and fellow affiliate Richard Dale say this disruptive model of providing consultancy services is well suited for serving private equity firms.
Young says private equity firms need to access expert skills specific to the particular industries to which they are seeking exposure, and often need to assemble these expert teams quickly. Typically, firms seek the people they need through their own networks. ICG opens up access to a much broader network, currently over 1000 senior experienced consultant and executive members and affiliates in Australia, New Zealand and internationally.
Dale says making use of ICG’s proven pre-packaged consulting products, such as Confidential Market Sounding (CMS) or Culture Transformation Program (CTP), can achieve outcomes faster with greater reliability and less cost than “make it up as we go along” consulting methodologies.
Projects are circulated to ICG’s affiliate network through a “best affiliate forward” (BAF) process. An initial BAF specification will be prepared at no charge. ICG then puts the BAF out to its affiliate network. Affiliates then bid their expertise if it closely matches the BAF’s specification. Within 48 hours ICG’s curation process provides detailed profiles of up to three affiliates considered highly suitable for the client to review. If the client decides to proceed, charges are based on the rate advertised in the BAF, with most of the fee going to the consultant.
Dale says another attraction of the BAF process is the professional quality assurance ICG applies to its affiliates who bid for BAFs. There is a high level of transparency and peer review in the BAF process itself. Affiliates that bid on a BAF get to see the expertise profiles of affiliates short-listed by ICG, and the one chosen by the client. Moloney labels it “adhocracy with total meritocracy”.
In two years, ICG has grown from a small Sydney base to become an international organisation with more than 1000 affiliates and offices in Melbourne, Auckland, London, Toronto and Paris.
Meanwhile ICG is working with key professional associations and large companies encouraging them to also use the Industrial Adhocracy platform to add value to their memberships and knowledge bases and ultimately expand the expert network accessible from ICG’s BAF process. So far, the Industrialised Adhocracy platform can be used through ICG to source consultants, computer professionals, marketers and accountants.
ICG’s is not the only business model to be based on the rapidly growing number of independent business consultants. Earlier this year (APE&VCJ, Mar 14) Expert360, a Sydney-based online business which links clients with consultants across a wide variety of skills, raised $1 million in seed capital from angel investors.