CXO

A new leader for an old firm

Andersen, as (Arthur) Andersen now likes to be known, just announced a new head of business consulting. In this week's Inside Consulting, Tom Rodenhauser says that her first order of business should be to help resolve the firm's ongoing identity crisis.


The head-spinning changes at Andersen—forgive us for subconsciously inserting “Arthur”—continue as Gail Steinel takes over as head of business consulting. She replaces Richard Boulton, who had replaced the long-standing Chuck Ketteman more than a year ago. (Boulton is moving on to “other leadership responsibilities” at the firm.)

Steinel inherits 11,000 consultants and, judging from the changes now underfoot, a firm with a serious mandate to resolve its identity crisis.

Andersen often characterizes itself as the best-kept secret in the consulting industry. Considering its dysfunctional relationship with the firm formerly known as Andersen, that’s an understatement. Let’s face it: The new (Arthur) Andersen lived in the shadow of the old Andersen (Consulting) for more than a decade.

As the little monster Arthur created in 1989 proceeded to gobble the consulting world, the firm’s own consulting commitment languished. The reason was simple: For most of the ‘90s, Andersen Consulting padded the pockets of Arthur’s partners. Arthur’s consulting division grew by serving its own clients. During the mid-90s enterprise boom, most Arthur partners were quite content receiving both the hefty transfer payments from AC and a sizable bonus from its modest consulting business.

The apple cart was upset when ex-AC chief George Shaheen complained that Arthur was using the transfer payments to undercut AC’s business. Well…why not? When milk and honey are flowing, people tend to take milk-and-honey baths. To claim the two were competing, though, was a bit of Georgian hyperbole.

Once the money became unmanageable, splitting Arthur and Andersen became inevitable. Now, like bitter ex-mates, the two can’t help but throw thinly veiled insults across the room. Witness Andersen’s pointed tagline: “We believe in real growth, real profits, and real vision…not to mention real names.”

Ironically, there’s little need for “nyah-nyah-nyah” marketing. Andersen has a very definite point of view that clients want accounting and consulting under one roof. From a consulting perspective, Arthur never emulated Andersen, even when they were one unhappy family. And Andersen will not gun for Accenture now.

Andersen’s real place in the consulting world, as Steinel will surely confirm in coming months, is still a work in progress.

Heard on the street
Kudos to The Wall Street Journal reporters Jonathan Weil and Jeffrey Tannenbaum for finally documenting what most insiders already know: Big accounting firms derive enormous nonaudit fees from audit clients. The April 10 article bolsters the U.S. Securities and Exchange Commission argument that potential conflicts exist when companies pay consulting and IT services fees to their auditors.
Inside Consulting is written by Tom Rodenhauser as a free weekly supplement to The Rodenhauser Report. The report informs senior advisors and business executives of consulting trends and best practices. Subscription cost is $295 per year for 10 issues. Copyright 2001, Consulting Information Services, LLC. Reproduction is prohibited. Quotation with attribution is encouraged.

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