From the time he came to the company, Jaideep Bajaj has understood that the genesis of success at ZS Associates Inc. is all about creativity.
But creativity itself cannot sustain a business.
Two decades ago, Bajaj was one of about 25 employees at ZS, and good client work was fueling rapid growth at the management consulting firm. But as Bajaj’s career progressed, he stepped into the role of managing director about six years ago and realized that while creativity was still king, ZS had 17 offices around the world, with roughly 1,200 employees, but no global standards.
“We had lots of very creative people, but 100 percent freedom,” he says. “Meaning, if you’re in London, you decide how many people to hire, you decide what you want to do, and it’s really not about that, it’s really about synergy that you have to have with each other globally. You have to have a consistent product development and product expansion strategy. That requires structure with the freedom to innovate, because we had this legacy of amazingly free work … and yet, there was a realization in the firm that to truly harness and compete, we do need structure, and so balancing this 100 percent freedom to innovate with the need for structure has been a fairly significant trick.”
So when Bajaj decided to attack ways to create systems while still keeping that creative fire alive, he started at the top, creating accountability for his senior leaders. With that in place, he created review systems that teamed people across offices together and had them graded from above and below. All the while, he tweaked hiring and training while putting a limit on how fast the company grew.
The results have helped the company get to more than $250 million while keeping alive an incredible growth streak that has averaged 20 percent per year for the last 15 years.
Start with accountability
As ZS began to grow outward, adding offices all over the world, Bajaj and other senior leaders noticed that while one office would have a killer solution to a problem, another would have no idea how to handle it. Similarly, there had been no minimums or maximums to basic systems such as head count.
“So there was a need for global scheduling systems,” Bajaj says. “There was a need for global head count hiring, because why would you overhire in Japan and then never use those people?”
When you begin to think about getting different people in different places on one page, it can seem overwhelming. But Bajaj says you wouldn’t believe how much low-hanging fruit is out there.
“The idea really was to think of the major levels that would have the quickest impact first, so we identified partner accountability as the first place to start off because you want to start with senior-most people being accountable before you start making the whole firm accountable,” Bajaj says.
But ZS didn’t want to completely kill the creativity that it had been built upon. Previously, partners had never been asked to submit any kind of plan. ZS didn’t want the exact opposite, where partners would feel they needed to spend all their time creating and criticizing each other’s plans. The best result was in the middle, asking them to submit overviews they believed they could achieve.
“So partners had to develop plans around their clients, plans around what they wanted to do and hold themselves accountable,” Bajaj says. “It’s not so much someone saying, ‘Hey, do this,’ it’s about, ‘What is your plan?’ and then giving them advice on how to improve the plan, so you do it in a fashion that’s consistent with the concept of being a partner.”
ZS then plucked another piece of low-hanging fruit: Creating basic systems to tie employees to units of business to make better sense out of productivity expectations, creating practice-area teams in areas where the most common client problems arise.
Beyond the 20-plus practice area teams at ZS, the company has also benefited from placing people together in skill tracks — they are sort of like minors in college, with expertise focused in a particular area. You may have offices in Milan and Chicago, as ZS does, that have only one person focused on operations research, but the two working together could create a track.
People can change tracks at any time, but their existence meant that suddenly ZS knew what gaps it needed to fill and that it would need to help with the hiring and recruiting required to fill those gaps.
“So if you are trying to change a staffing process, you make sure these tracks around the world understand what we are doing, question it, absorb it and become an element of change,” he says. “They have similar backgrounds, and they feel this unity, and there are global track leaders who can then leverage these tracks as part of communication and change.”
Though all of this has created better global staffing, ZS still allows for some flexibility in its hiring to fit in creative people — or stay a little short if the talent is not available.
“There is always room for great people, so an office may have a hiring goal of five people and they may have already hired six, but here comes No. 7 who is absolutely amazing and just walks on water, you are hired,” Bajaj says.
“Now, the flip side is you never lower the standard. You have a goal of hiring five people and you found only two that are amazing, you don’t lower your standards just to fit the head count because that’s going to kill you in the long run.”
Make employees pass the test
With some low-hanging fruit already on the table, ZS still needed to do a better job of ensuring that people were taking advantage of new systems meant to spark collaboration and accountability. In order to do that, you need to figure out who is excelling at those elements and who needs more work. Bajaj again started with senior leaders, as they all do peer 360 reviews.
“That peer input is part of calibrating me as a partner, part of keeping my culture consistent with the rest of the firm,” he says.
You can do that calibration by having senior leaders outside of a project review how it went. For example, when Bajaj does one for another partner, he reviews the work done on a project and then speaks with people on that team about the role the partner played, listening for overall trends, not one bad review.
“So if I’m doing a 360 on a different partner, I will interview the managers who used to work for that partner to try to make sure that what they have [to say] is being listened to,” he says.
And you can do that with more than just partners. After a project closes, everyone on the team is asked to review people below and above them — managers, for example, grade associates and partners.
Again, no one negative review costs anyone a job.
“Let’s say I’m an associate,” Bajaj says. “I get reviewed on every project by whoever the project manager was and so I may get reviewed by 10 different managers in the company for 10 different assignments over a six-month period and it’s the integration of those 10 that creates my annual review. That’s given to me by my manager, who summarizes it and says, ‘Here’s how people are talking about you. There’s this element called collaboration, and you’ve scored below average, and here’s the things people have pointed out.’”
People are also asked to write their own review and describe what collaborations they’ve done that have benefited themselves and others in the firm to drive home its importance.
“The things we value, we make sure they are reinforced in multiple systems,” Bajaj says.
In all, teamwork is one of about eight dimensions in what ZS calls its competency model. The model is an overall test, without which you cannot get promoted to the next level.
“So these dimensions are tracked over your career — same dimension but different measures of success and degrees of success are required as you progress up,” Bajaj says. “We prefer people to have every dimension, but very occasionally, we will compensate and say they were so much of an outlier on all these dimensions and this one they are pretty close, but if you fail completely on a dimension, you are unlikely to progress to future levels.”
And when people can’t improve, Bajaj says you can’t have any reservations about telling them to move on — even to the point of helping them find work.
“We’ll, of course, try to improve them,” he says. “And if they can’t improve, we’ll be open as to how their career will flourish better elsewhere. Because it’s not just about us being selfish and saying you don’t fit with us and you should leave. If their career isn’t progressing with us, it’s not good for them either.”
Set growth limits
While all the systems were being put into place to create accountability around collaboration, Bajaj realized there is one other thing that can kill it during growth: new people. You may think that a good company culture will indoctrinate new people, but there is a limit. ZS had a year when it grew nearly 50 percent, and upon review, Bajaj realized that it was the company’s weakest effort to date.
“Of course, financially it was a great year, but the more we looked back at it, the more we said, ‘You know, I think our customers gave us a break,” he says.
Thereafter, Bajaj and other senior leaders capped the company’s growth capability for one year, even if it meant turning down projects.
“Internally we feel that we never want to grow more than 25 to 30 percent because that almost breaks our back,” he says. “And, cumulatively in our history, we’ve done about 20 percent per year, and we think we can manage that in a very healthy fashion, but the years that we crossed 30, we could feel the stress in our quality.”
That number was brought about by an understanding of how important it is to mix people experienced with your company’s expectations in with new hires — regardless of the new hire’s industry experience.
“So really there is a healthy mixture of experience and growth that you have to balance because it’s really about growth long term and not about one breakout year where you just hire lots and lots of rookies,” he says. “Even if you hire experienced hires, they are still rookies in our practice areas and the expectation of customers from us.”
You also need to take a close look at your hiring and training processes.
“It all begins with the kind of people you hire and how you train people,” Bajaj says. “So we have this thing called a new employee orientation, so one of the things we do is, rather than simply share the practice areas at the firm and the technology of the firm, we share cultural norms of the firm, as well.”
Those orientation sessions include a class on company culture from one of the company’s founders and each of the firm’s senior partners runs their own three-hour session.
ZS breeds its culture into any new office through representation. Instead of opening an office with one existing manager who hires a new team, Bajaj says you can replicate your culture with strong forces in a new location.
“When we start a new office, rather than just hiring brand-new people only for that location, we’ll feed it,” he says. “Maybe up to one-third of that office with people from existing locations that represent our values and our culture and then recruit — rather than simply recruit 90 to 95 percent and just send one guy or two people.”
How to reach: ZS Associates Inc., (312) 233-4800 or www.zsassociates.com