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The jewel of the 21st century Diamond is, in many ways, the consulting company of the future. Diamond is an e-commerce consulting firm, harnessing the revolution of the Internet to bring its clients growth - and predicated on the assumption that the Internet is so powerful that it will change the very nature of business everywhere. The company is a producer of high-quality, precedent-setting content, including the recent best-seller Unleashing the Killer App, by Diamond consultants Larry Downes and Chunka Mui. And Diamond is one of the first firms of its kind to be virtual - with no set offices outside its headquarters in Chicago and a small Cleveland office. Professor Anthony Paoni of the Kellogg School of Management approvingly told CNNfn: "What is unique about Diamond is that they started with a clean sheet of paper, so the good news is that they didn't have an existing structure to dismantle." This forward-looking consulting firm was founded in 1994. E-commerce specialty E-commerce exploded during Diamond's fiscal year 1999, and Diamond caught a ride on the digital wave. The astounding growth in Internet-based business confirmed the wisdom of Diamond Technology Partner's e-commerce concentration. According to industry observers, business-to-consumer sales will reach at least $25 billion in 1999, and up to $126 billion in 2002. Business-to-business e-commerce, the sleeping giant of the Internet, may hit $843 billion in 2002. This growing market, according to the International Data Corporation, should create a $78 billion market for Internet consultants by 2003. The importance of digital strategy How does Diamond Technology Partners help its clients understand the use of e-commerce to their business? The firm believes that all CEOs must craft a Digital Strategy to help them cope with the influence of the Internet and analyze their company's role in the ongoing Internet revolution. When taking on a new client, Diamond uses a six-question diagnostic to help CEOs determine their place in the new industry structure and economics, and the implementation of changes to cope with e-commerce. Harnessing growth The Diamond formula seems to be working. Revenues have grown approximately 40 percent a year since Diamond's inception. In 1999, revenues increased to a record of $82.4 million. Net income for the year rose to a very healthy $9.8 million, up from $6 million in 1998. Diamond has worked with 85 clients in fiscal year 1999, and consultant turnover lingered at 11 percent, an industry low. According to Diamond CEO Mel Bergstein, "Growth in demand for e-commerce is unequaled by anything I've witnessed in more than 30 years of consulting." Statistics bear out the words of Bergstein. In the first quarter of its 2000 fiscal year, Diamond had 89 clients, as compared to 40 in the first quarter of 1999. In the second quarter of fiscal 2000, Diamond served 70 clients, as opposed to 39 in the second quarter of 1999. A virtually great idea While, according to a March 1999 CNNfn report, Diamond has 280 employees, only 65 work in its Chicago headquarters. The rest live in locations of their choice around the country, and work at clients throughout the country. The firm also works with clients outside the United States. Diamond consultants stay connected through an intricate web of technology - communicating with each other through cell phones, two-way pagers, and Palm Pilots. To make sure that everything goes smoothly, Diamond keeps a support staff on call seven days a week. But Diamond consultants keep in touch in person too. The consulting firm holds an "all hands" meeting once every financial quarter. In addition, consultants are required to spend three days in training at the Chicago headquarters every quarter. In the meantime, Diamond CEO Mel Bergstein also sends out hundreds of e-mails, and a weekly voice mail message to all employees. The environment at Diamond must be appealing. In a market where tech-savvy professionals have many job options, consultant turnover in fiscal year 1999 was a mere 11 percent. The people of Diamond Diamond is a small, selective firm, and it attracts professionals attracted to the idea of earning stock options for their hard work (a public consulting firm is a rarity). At a time when MBAs are attracted to Internet startups with the potential for equity, Diamond's combination of e-commerce expertise and stock options is very attractive. In a 1999 Fortune survey, Diamond Technology Partners ranked as one of the top 50 most desirable employers for MBAs. Hires normally have four to seven years of professional experience on top of their degree. The facets of Diamond's internal structure Diamond consultants are generalists, but work across five different service lines that Diamond offers: digital strategy (business e-commerce strategy), change management (working with client employees to effect change), value management (handling organizational shifts), profit improvement (using technology to enhance revenues and improve cost structures), and Diamond Marketspace Solutions (a e-commerce prototype division). Along with their mastery of these different services, Diamond consultants at the partner or senior principal level are assigned to a vertical team, led by a senior partner with P&L accountability. There are currently three such teams: one in financial services, one in telecommunications and utilities, and one in consumer products and services. A marketspace of digital data In July 1999, Diamond introduced a new service line called Diamond Marketspace Solutions. DMS expands Diamond's creative design and e-commerce prototype capabilities. Consultants in DMS construct e-commerce prototypes to test the working theories of other consultants. Diamond will build a Marketspace Research Center with a technology lab, a media lab and a development lab. The company will hire 100 people in 2001 who will be dedicated to working with Marketspace. Unlike most Diamond consultants, most DMS staff must live in or near Diamond's Chicago headquarters. According to Diamond, Diamond Marketspace Solutions has been a resounding success. CEO Bergstein announced in November 1999 that the company credited DMS with doubling (from 5 to 10) the number of clients billing over $1 million in the quarter. DMS clients include TheSauce.com, a restaurant e-commerce site. Context and content Diamond brings the e-commerce message to its audiences in many ways. The company publishes a magazine called Context (visit it at www.contextmag.com), which seeks to reach a key business audience (potential Diamond clients) through explaining the use of e-commerce and other technology changes for business. The July/August 1999 issue features an interview with Bill Gates, who ruminates on the speed of the adoption of the "web lifestyle" among Americans today. Context is sent to 35,000 senior executives, about 5,000 to 10,000 journalists, investors and other contacts, and newsstand readers - it has been sold publicly since early 1999. Along with Context, Diamond also publishes two newsletters, Digital Bit and Digital Strategies. The Killer App Another source of exposure for Diamond Technology Partners: the renowned Unleashing the Killer App, a book by partner Chunka Mui and fellow Larry Downes. Unleashing the Killer App, based on deep knowledge of the digital industry learned through their work at Diamond, exhorts its readers toward seemingly counterintuitive wisdom like "Cannibalize your markets" and "Give away as much information as you can." Mui and Downes posit that in the new digital economy, old economic rules must give way. The curious can join a conversation about the killer apps of the future at www.killer-apps.com. The book had sold nearly 100,000 copies as of April 1999, and its concepts are working their way through the business community with the efficiency of a meme - or a killer app. West Coast presence It makes sense that a consulting firm involved so heavily in e-commerce solutions would need an office near boomtown Silicon Valley. Now Diamond Technology Partners has bridged this gap. In November 1999, the firm announced it would acquire Leverage Information Systems, a web development firm based in San Francisco. CEO Bergstein indicates that the acquisition will be the foundation of a San Francisco Diamond Technology Parnters office.
Diamond's primary recruiting efforts involve attracting people directly from top graduate MBA, MS and undergraduate programs. Once accepted for an interview, individuals can expect to undergo two or three rounds of interviews with five to six of the company?s consultants and partners. Currently experiencing an unprecedented growth spurt, Diamond expects to increase its recruiting and total number of new hires. Those with prior management consulting experience stand as much of a chance of landing Diamond jobs as those who received their degrees from elite business schools, insiders say. Like many other consulting firms, Diamond sometimes uses cases and guesstimates in its interviews (i.e., the applicant is presented with a business scenario and asked to "solve" it, or to estimate an unusual figure). For example, one consultant recalls being asked to estimate the number of tennis balls that could fit into the Fuji blimp. (Diamond says that most case questions and guesstimates are taken directly from current Diamond engagements and that such quirky guesstimates are atypical.) Although cases and guesstimates vary, Diamond has a reputation for rigorous interviewing. Suffice it to say, applicants should do their homework before walking through Diamond's front door. Current starting pay for MBAs is $92,500 plus stock options and signing bonus. For the fall of 1999, Diamond has commitments from 65 MBAs from 12 business schools, as well as 19 undergraduates from 9 undergraduate schools. "A lot of emphasis is based on fit and ability to hit the ground running and on initiative," notes a Diamond consultant. The firm named 12 partners in 1999; the total number now rests at 58.
The training process Insiders praise Diamond's training program for incoming employees. "For analysts, there is usually three weeks of initial training, followed by an apprenticeship with a consultant," reports one insider. "The apprenticeship is a period of coaching and mentoring. New employees can also expect a minimum of 12 days of in-house training." Nevertheless, insiders warn that Diamond employees "must learn on the job. This is a small firm; there is no three-month period of solid training. People who lack initiative or who need structure should stay away." A mobile and open firm Insiders generally speak highly of Diamond's environment of fluid advancement. "Diamond is a very, very mobile organization, upward and otherwise. There is increasing focus on merit-based advancement." As for Diamond's status as a public company, the reviews are all thumbs up. "We are an anomaly in the consulting industry because everyone in the firm has stock or stock options in the firm," explains one insider. Is everything shared at Diamond? "Information is also shared," discloses another insider. (Well, it is a public company.) "Every week the employees hear about recent company news." All in all, Diamond insiders seem hell-bent on spreading the good news of their company. "I would - and have - recommended Diamond to several friends," says a contact. "I've worked for Diamond for over a year after graduating from business school. So far, my experience has been great." 'On the road,' by Diamond Because of Diamond's "virtual" nature, Diamond consultants travel frequently and often work at client sites. "I view the travel as a perk," chirps one enthusiastic consultant. "Unlike 'normal' jobs, I commute to work only once per week instead of five times per week. Of course, I do not mind living out of a suitcase." That contact continues: "Acknowledging that travel is constant, Diamond provides us with airline club memberships and first class upgrades." Another insider reveals, "Diamond provides us with lots of travel-worthy equipment. Things like Lotus Notes and dial up network access facilitate an effective work environment anywhere there is a phone line." Why Diamond? Diamond has many unusual perks that its consultants love. One MBA grad was initially attracted to Diamond because of its "entrepreneurial feel and emphasis on the integration of business and technology," while another insider likes the company because of the "chance to be part of a new firm and participate in its growth." Others find the "live anywhere policy" to be a big draw, "especially for dual career couples." One consultant indicates "the fact that the firm is self-insured makes the firms health care policy extremely attractive compared to other firms." The office: It's not all virtual Even though Diamond consultants are usually at client sites, Diamond makes sure they come home to a lovely office. Diamond's headquarters is said to be "very nice, especially the view of Lake Michigan." On the other hand, "because Diamond is a virtual office, when more people show up than expected it can get a little crowded." Perhaps the Ritz-Carlton is more roomy - that's where insiders say they stay during Diamond's quarterly "all hands" meetings. Diamond consultants do it for themselves Because of Diamond's "entrepreneurial risk taking" culture, insiders say they are "frequently called upon to work independently." This includes Powerpoint - according to an insider: "At Diamond, we believe in doing most "secretarial" things ourselves; we do our own presentations and copies." On the other hand, the support staff is available 24 hours for technical support. Great perks When Diamond consultants travel, they go first class. Consultants say they get first class upgrades for airline tickets, get free membership to airline clubs, and have health club usage reimbursed upon arrival. Communication costs and ISP access are covered by Diamond as well. Another travel-related bonus: Frequent flyer miles and hotel and car rental points are retained by consultants, and, with four weeks of vacation, Diamond consultant have ample time to use their frequent flyer miles. "Stock options" are perhaps the best perk of all.
Human Resources
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