Taking the Reins: How One CEO Transformed His Consulting Firm

leadership

Not many of today’s CEOs can say they’ve spent nearly their entire career at their firm, but Boston Consulting Group’s Rich Lesser has. February marked his 30-year anniversary with BCG. Lesser took the helm in 2013 of the Big Three strategy consulting firm, now with 85 offices in 48 countries.

For a corporate leader, having risen through the ranks can have both pluses and minuses, said Lesser. He spoke at a recent Wharton Leadership Lecture, where he was also interviewed by Wharton management professor Peter Cappelli.

“When you grow up in an organization, you tend to have the mindset of the roles you’ve had to date…. I sort of grew up in a ‘geography’ mindset,” noted Lesser. He had led the New York office and also the North and South America region. But when he became CEO, he said, he found himself in charge not only of geographies around the world but also industry practices, functional practices and global functions supporting the firm.

“You have to quickly change your mindset to get out of the lens that brought you to that point…. It became one of my priorities that we needed to do that better as a company in general.” Lesser proceeded to appoint some of his best practice leaders to run geography areas, and some geography leaders to run practices. He moved some of each into global function roles so he could “cross-fertilize.”

“Then I also created different meeting formats [and] communication styles … because the world was moving so fast we had to connect differently, and more deeply, with each other.”

Another result of Lesser having “grown up at BCG” are his many close relationships with people throughout the organization. Cappelli asked if this situation made it more difficult for him to lead. For example, how do you turn a friend down for a promotion?

“When you grow up in an organization, you tend to have the mindset of the roles you’ve had to date.”

“What I try to do … is make it clear that we all have a responsibility to BCG first,” he said. He added that having a partnership culture rather than a corporate culture was an advantage in this scenario. “There are so many ways they can contribute…. I try to signal that I’m trying to do the right thing, and I think they know that about me. And they know that I don’t play politics.” He told his employees “from day one” that he would “never promise a job to someone under the table,” and he says he never has.

Lesser said that a key factor in successful leadership is authenticity, asserting that one has to live up to a certain set of values and standards in a consistent way. A CEO needs to be a role model with every step. “I just can’t stress this enough … it affects everything,” he said.

He shared an anecdote about being on a flight and, upon landing, noticing that the woman next to him was struggling with her bags and her children. He took a few minutes to help her and her family get off the plane, then walked back on. “I didn’t even think about it… [but] there was a BCG-er behind me — I had no idea — who’d been sitting there the whole time and commented, ‘Wow, you act that way when no one’s looking.’”

If there was one piece of advice he would give CEOs, said Lesser, it was that “you can’t be two selves … you can’t be who you are in public and act one way, and go behind closed doors and act differently.”

Cappelli observed that today, “there are no closed doors,” and Lesser agreed.

Technology and Globalization

Lesser noted that his tenure at BCG has been marked by a major shift toward technology across the business world. He called the period 2012-2013 an inflection point for technology, including analytics, digital, mobility and connectivity. “All of a sudden I’m meeting CEOs and in the space of about a year, discussions are shifting from all the normal stuff [about their sector and the economy] to: ‘What is technology going to mean for us? Is it going to disrupt us? What do we do?’”

In response to this trend, in January 2014 BCG launched Digital Ventures, an innovation, product development and commercialization business that collaborates with clients to create and advance digital products and platforms. Lesser said that clients are increasingly realizing their success depends on how they embrace digital, which can affect how they engage with customers, run their supply chain or use analytics to gain insights into their markets.

Globalization is another big concern of BCG’s clients, Lesser said, noting that globalization is “radically changing right now.” He attributed this partly to political trends, but also to the nature of production technology. Increasingly, because of automation and other factors, goods are able to be produced much closer to the end customer’s location.

“This idea that you offshore low-cost production and put it on ships for 10 to 12 weeks to bring it over: That model of globalization will still exist — it’s not disappearing — but there will be other forms of globalization that center more on services,” he said, naming IT and digital among them.

“That’s not happening so much today, but we’re writing a ton about it, we’re starting to do work [on it] … because those are the issues that our clients are going to be encountering as they plan their supply chains and models for the next five or ten years.”

Trump’s Strategic and Policy Forum

The day before Thanksgiving last year, Lesser was relaxing with his extended family in Boston when he received an email that was “quite a surprise.” It was from Stephen Schwarzman, co-founder of the private equity firm Blackstone Group, inviting him to participate on then-president-elect Trump’s ‘President’s Strategic and Policy Forum.’ Lesser said that Schwarzman had been asked by Trump to form a group of business leaders to give “candid, bipartisan advice on what we can do to move the country and the economy forward.”

“I’m a registered Democrat … it was the last thing I was expecting,” said Lesser. “When I had dinner that night with my family, this was quite the conversation. My family was sort of in a state of shock.” It was only three weeks after the election.

“You can’t be two selves … you can’t be who you are in public and act one way, and go behind closed doors and act differently.”

Lesser was asked to describe the first meeting of the forum, which took place on February 3. He said that the discussion was private so what he could share was limited, but characterized it as “very engaged, very direct.” Each CEO was invited to speak on a topic they believed would move the country forward. Lesser chose immigration, partly because he felt that Trump’s January 27 executive order banning travelers from seven Muslim-majority nations profoundly affected global companies such as his own. (According to mainstream media, Elon Musk and other participants also addressed the immigration order, and one CEO — Uber’s Travis Kalanick — quit the advisory council entirely because of it.)

“I have BCG-ers all over the world, and not just Americans, who feel really strongly about this topic,” said Lesser. “I do, too, but they have stories in a way that I didn’t have personally … and I was able to bring that knowledge and perspective to the discussion.”

Cappelli asked Lesser if he believed that the forum participants had a different perspective on social issues than the politicians and advisors around the president. He answered, “We live in the pragmatic world … we see the enormous importance of talent, and the United States has been a magnet for talent for decades. It’s been a huge driver going back to probably our grandparents and over generations, to bring great people in.”

He noted that business leaders have a “real sensitivity” to any conditions that make it harder to attract talent, or create the impression that the U.S. is not an open environment where people can come and make a difference.

Lesser added that he did not want to pre-judge Trump so early in his term, and hoped the president would eventually move toward the idea that the U.S. is fundamentally better off being highly interconnected with the rest of the world. “It’s one thing to re-negotiate agreements that are 20 years old; that’s fine. But if it’s actually walking away from [being interconnected], I think that doesn’t move the world forward, and I think it won’t help Americans, either.”

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