Bain & Co has opened a Perth office and insists it is in for the long haul.
LIKE bees drawn to the blooming flowers of spring, a growing number of globally branded professionals is establishing a presence in Western Australia – but what exactly is the nature of the nectar they are chasing?
Bain & Company worldwide managing director Steve Ellis heads one of the big three management consulting brands, the second to establish a permanent presence in Perth after Boston Consulting Group set up shop last year.
Mr Ellis agrees that one of the things that attracted Bain to Western Australia is the cohort of decision-makers behind major projects that now resides here – the business leaders who inhabit the ‘c-suite’, the collection of offices where chairmen, chief executives and anyone else with a title starting with ‘c’ works from.
It is in that rarefied air of the top echelons of business where top-flight management consultants are most likely to find the kindred spirits who understand the value they add.
For Bain, which claims to have become increasingly focused on putting part of its pay at risk, WA now has not just a big number of decision makers with big growth prospects, it seems the potential clientele like to share the risk too.
Mr Ellis said Bain’s approach was somewhat self-selecting. By presenting a results-driven process and showing a willingness to share their client’s risk on the strategy, they find clients who fit their mould.
For those who know the resources game, it is not hard to imagine the kinds of businesses Bain might be thinking of.
“We think there is a high concentration of our types of clients in WA,” Mr Ellis said.
“By definition WA is made up of risk takers, that is part of the way the region has developed for lots of reasons, more of which I am becoming sensitive to,” he adds.
And while the Bain leadership will say their work goes beyond the big resources companies in WA, it is clear more than just client attitude has drawn them to Perth.
Bain’s opening of a Perth branch, one of the smallest population centres to host such an office, is recognition of the significant amount of high-end work taking place in the state with large capital expenditure.
Mr Ellis refers to WA as an epicentre of the next great phase in the industrialisation of the world, being China and then India. The story of the raw materials required by those growth nations is not new, but the management consultant’s view on why it sees an opportunity in this state might provide some insight to readers.
Bain managing partner Dale Cottrell believes growth is the extraordinary story in WA, taking place on a scale that is in some ways unprecedented.
“These are hyper levels of growth,” Mr Cottrell said.
“How do I set my business to meet those challenges and make sure I have everything in place to meet that growth?”
Those sentiments will resonate with many in this state familiar with the issues that growth is creating – skills shortages, cost overruns, safety concerns and a huge number of additional problems arising because the scale of the growth has become a political football. Our familiarity with them belies the fact that this is a rare confluence of events beyond the experience of many managers used to making decisions in much safer territory.
It is also exacerbated by the huge amount of capital involved, which only serves to heighten the risk-reward equation.
“If you have a $26 billion project your ability to influence the speed of that project or efficiency or effectiveness in managing the return ... if you can just turn that dial one or 2 per cent, think of the economic value,” Mr Ellis said.
Of course, it’s not just about the upsides.
No manager wants to be the one to blow up the company, be it from a bad investment decision or an environmental disaster.
Mr Ellis said the complexity of the situation – especially in oil and gas – was extreme and rare, though he notes Bain has established an office in Rio de Janeiro for many of the same reasons it has in Perth.
“If you take WA, for example, the scale of the investment and what it means for the revenue base of Australia and the impacts that is having on the economy ... it is a very important part of the context and landscape these companies have to manage through,” Mr Ellis said.
“Management teams are trying to cut through the complexity and make the right decisions.”
Of course, Bain says the magnetic attraction of big, well-capitalised projects run by multinational businesses and fast-growing locals is not all that the consultancy is about. The resources sector is driving growth elsewhere in areas the business is familiar with.
“This is a multi-decade evolution ... for this region and the part it plays in the growing demand for energy and infrastructure, so we want to be a catalyst for ensuring that process evolves at a speed and a pace with the kind of success that the magnitude of investment demands,” Mr Ellis said.
“That means being relevant, not just big projects but the rest of the system that grows up around that.
“It is not just Bain going after the shiny objects.”
It is a line that reflects a response to the inevitable questions about why a firm like Bain might launch an office in buoyant Perth in the midst of a global downturn.
Management consultancies and other global brands have set up bases in Perth before, only to be defeated by the cyclical nature of the resources business and the lean pickings in other fields.
Mr Ellis said the business didn’t take the decision to open an office lightly. One of the key ingredients was having three partners willing to permanently locate themselves in the town; a metric delivered with Brian Murphy, Stuart Love and Robert Radley, who have established the Perth office in St Martins Tower while the firm looks for more permanent space.
Bain also claims to have had a near-permanent presence in Perth for more than two years and a constant workload here for five years.
This may be the case, but its unwillingness to discuss clients or projects makes it difficult to confirm. Unlike the investment community, these overnight bag-touting consultants prefer mystique to tombstone advertisements.
“I understand the sensitivity that exists here with the sort of degree of permanence and endurance that our commitment to this market will really have,” Mr Ellis said.
“There is a genuine sense of scepticism about that, which we appreciate and understand.
‘‘Let me be crystal clear; our opening in this market, the investment in this market and the people we are committing to in this market are long-term commitments. If you look at our map we don’t have as many offices in far-flung places as our competitors.”
That permanence, he said, was because of the long-term opportunity, no matter what the current global economic issues might be in the short term.
“Certainly we are concerned about global headwinds,” Mr Ellis said.
“(But) the clients we work with understand that one of the best ways to advance their market position is to invest in periods of turbulence.”