The hedgehogs of Marakon
"Marakon is hedgehog heaven," wrote Fortune magazine in 1998. Does this mean that Marakon consultants have a prickly disposition and an animalistic drive? Not quite. What it signifies, according to Fortune, is Marakon's place among the two different categories of consultants - the fox, which does many things, and the hedgehog, which hunkers down and sticks to a single strategy. Indeed, Marakon's strongest facet is its primary governing objective: to increase shareholder value. As such, all strategy, energy, and creativity is directed toward that end. The company devotes enormous amounts of time and money to analyzing economic profit (or profit that includes a charge for the cost of capital) and plotting ways to increase it.
The happenstance of Marakon strategy
Marakon's creed, "Strategy Happens" (also the title of an essay by Marakon CEO Peter Kontes) indicates the firm's quest for answers. Because Marakon is convinced that strategy is in the details, it analyzes a client's every analysis and decision - even those made at the lowest levels. (This is somewhat different from the emphasis of most other top strategy firms, which typically concern themselves with strategy and decision-making at the highest levels.)
The process is a long and expensive one; indeed, Marakon has been known to spend three to four years and to charge $5 to $10 million in consulting fees before completing a project. Nevertheless, Marakon's success rate speaks for itself. Having assisted - and impressed - the likes of Coca-Cola, Dow Chemical, Nordstrom, and BankAmerica, Marakon has proven that a meticulous working method reaps great rewards.
Marakon means choice
Marakon's method of consulting, which embraces value-based management and capital-market economics, differs from the norm on a number of levels. Unlike many consulting companies, which generally offer one solution to a client's business woes, Marakon attempts to create choices. The firm offers each of its clients at least three strategies for increasing the value of its business - all with the end result of maximizing shareholder value. Typically, Marakon serves U.S. companies listed in the Fortune 100 and large, multinational European businesses.
Strong growth and a diversity of clients
Although Marakon serves a diverse set of clients, approximately 25 percent of the firm's business comes from financial services, another 25 percent from the consumer products industry, and another 20 percent each from the retailing and manufacturing/industrial products industries. In the past five years, Marakon's active clients have enjoyed returns on shares 3.1 percent higher than their industry peers, and 4.5 percent higher than broad market indexes. Marakon Associates itself boasts an average annual growth rate of 25 percent over the last 10 years.
Hobson's choice of models
Marakon consultants say that the firm is one of the few firms in the industry that holds fast to one sole model (Stern Stewart - with its EVA concept - is another.) The majority of consulting firms, insiders say, "operate like supermarkets, where you can go in and get whatever you want." Marakon, on the other hand is proudly focused. The firm requires its clients to submit wholly to its philosophy.
A little consultancy
Clients also seek Marakon because of its intimate size. Although Marakon's revenues per consultant are on par with industry titans like McKinsey and Bain, the company remains relatively anonymous because of its small size. In 1998, Marakon had only 210 consultants, and only five offices (in Connecticut, New York, Chicago, San Francisco, and London). In 1999, the firm estimates it will house about 240 to 250 consultants. Although Marakon does have plans to open new domestic and international offices in the near future, its present leanness pleases clients, who realize that Marakon's fat fees aren't being spent on posh offices.
Marakon hires approximately 70 new consultants worldwide each year, although this number may increase as the firm opens new U.S. and foreign offices. Marakon looks for employees who are "analytically gifted" and who have a credible presence when dealing with the firm's clients. Current employees suggest that applicants consult Marakon's book The Value Imperative.
Marakon's web site, located at www.marakon.com, describes the firm's undergraduate and graduate recruiting schedule and also lists contact addresses for the firm's recruiting team. One former summer associate says Marakon "loves people who are high on capitalism. Better yet, skim through The Value Imperative. It's actually a decent read, especially the first half, and it helps frame answers to their cases."
During the interview process, Marakon asks both general discussion and case study questions, insiders say. During the general discussion interview, the interviewer (usually a partner) will "give the interviewee the opportunity to ask specific questions about Marakon's policies and business climate." This interview is also an occasion for Marakon to assess the applicants and their potential. The firm encourages candidates to "try to be engaging, but not overly familiar."
In the case interview, the candidate is typically asked business problems or scenarios, usually by a manager. The case studies are meant to test an applicant's analytical ability, not his or her "pre-existing knowledge." However, know that Marakon's focus on profitability extends to its interview process. Insiders report case interviews based around "participation and positioning strategies, profitability improvement strategies, and profitability variation" problems.
The Marakon marathon
Marakon consultants work "marathon" weeks that range from 60 to 90 hours and usually spend two to three days each week away from the office. (The firm reports that consultants average 60 hours per week.) To cut down on overnight stays away from home, the firm has implemented a new actively monitored policy under which consultants spend two nights on the road, at most. Unlike at some consultancies, where consultants work on cases that can go on for years, at Marakon "you change cases every six to nine months, which is good and bad," says one insider. "Good, because you get a variety of experiences, bad, because you are in a different area of the country every few months."
Another insider draws a parallel between Marakon and "first-rate detective work." Does a Marakon candidate stand a better chance of getting hired if he dons a Sherlock Holmes hat and brushes up on those math skills he never quite mastered? "Not at all," reports another insider. "Marakon looks for discipline and the ability to learn quickly and thoroughly. Whether a candidate majored in history or economics doesn't matter, although candidates for all positions, but especially the analyst positions, tend to be Ivy Leaguers with excellent transcripts and resumes."
Small firm, sizeable perks
Report Marakon consultants: "You travel four days a week, though the firm does pay for everything." Employees say that the firm's pay scale is "attractive" and "competitive," and that they benefit from their "extensive contact" with the senior management of client companies. Don't expect to get away with too much expense sheet-sheet padding, though. A former employee says "Marakon is still a small firm, so they stay on top of travel and hours worked." However, the firm does offer a profit-sharing plan, and cool quarterly meetings. "First the partners tell the gathered consultants and other employees how the company's doing, and what new projects are coming in," reports one contact about these meetings. "Then in the evening we have an event. Some of these events have included a ball at Claridges [a fancy hotel in London] and an entire weekend in Dublin."
Small, intimate, little-known
While Marakon may not offer the "universal prestige" of some other consulting companies, it does give consultants a more "realistic" chance of receiving an equity partnership sooner in their careers than they might receive at a competitor. Those interested in working overseas "might have better luck going to the U.S. office and then asking for an international assignment," insiders say. For the ambitious, employees concur, "the learning curve is steep and interesting."
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