OC&C loses French partners to Parthenon-EY but commits to rebuild

21 August 2017 Consultancy.uk 10 min. read

Less than a year after seeing its Benelux arm depart to Parthenon-EY, OC&C Strategy Consultants has faced another blow with the departure of a senior French team to the Big Four firm. However, OC&C has reacted instantly with the deployment of a new leadership, and restated their firm commitment to France’s consulting landscape, a market global managing director David Krucik describes as “key” for the firm’s strategy.

Stories on potential issues in the French arm of OC&C have been circulating for months, with Consultancy.uk in June reporting on some of the speculation. Previously, reports had surfaced that the senior team of OC&C’s French arm were unsettled, and considering joining Parthenon-EY, in a move that would draw clear parallels with the decision of the firm’s Benelux arm to join Parthenon-EY in September last year.

Other sources even went so far as to allege that EY was eyeing an acquisition of the entire OC&C network – however the strategy consultancy slapped down that particular suggestion within days, as David Krucik, Managing Partner of OC&C Strategy Consultants, stated clearly that the firm would remain independent, and continue to leverage its growth and unique capabilities to further expand its footprint across the globe.

A number of OC&C partners have joined Parthenon-EY in France

Krucik said at the time, “Our partners started with and remain committed to a vision of independence. It’s a fundamental part of how we advise our clients and deliver bespoke solutions for them,” before adding that independent life is doing the consultancy well, stating, “the international partnership model is proving to be highly successful, enabling OC&C to achieve above market growth year on year.”

Founded in 1987*, OC&C did admit that they had lost “a number of partners” to EY in France, and a glance at their website and LinkedIn shows that the entire team of partners previously present in Paris have actually joined their Benelux colleagues at Parthenon-EY. What the exact status is of the (senior) consultants is at time of writing unknown – according to statistics from Consultancy.uk, OC&C had a team of 20+ consultants in France.

At the same time, OC&C have opened a new office location, which alludes to the fact that not only the partners but also the consultants beneath them have joined EY’s strategy arm, which was formed three years ago when the Big Four firm acquired The Parthenon Group. Both OC&C and EY declined to comment, only confirming the transfer of a number of partners, with more details set to unfold in the coming weeks.

Why Parthenon-EY?

The exodus of the senior French team also came without any direct comment, yet in an exclusive interview with Consultancy.nl, Pieter Witteveen, who leads Parthenon-EY in Europe, said that the integration with EY provided his Benelux team with “the best of both worlds”, referring to Parthenon-EY’s strategic expertise and EY Advisory’s global footprint and impressive client roster.

He also added that Parthenon-EY was given the mandate from EY to remain a pure strategy consultancy, and backed by investments by the Big Four, is eyeing ambitious double digit growth, building on more than 100% growth over the past two years to 900+ advisors, with significant investments expected to be made across Europe, where its market share still trails the US.

Another area which may have played a role in the decision is the integration roadmap OC&C is currently pursuing. Up to last year, the firm was operating as a network of independent local consultancies. As part of its growth strategy, the advisory firm decided to move towards an international partnership, similar to how McKinsey, BCG, Bain and Roland Berger operate, integrating the ownership structure of country units and broading the international mandate of equity partners.

Previously, the global partnership dealt solely with marketing, part of the training and international expansion projects. Everything else, including revenues and profits, came back to the countries, with local partners enjoying great freedom in the deals they struck.

The integration will, according to the consulting firm, strengthen its brand further down the line, with the hopes that it will also boost global co-operation and open up an avenue of opportunities through more scale and investment armpower. So far the the UK, US, China, Turkey, and France have been integrated, with the French move allegedly facing some resistance internally from the former team.

OC&C moves quickly to rebuild

Following the rupture in its French organisation, OC&C has moved quickly, restructuring its French operations by opening a new office at 4 Place de l'Opéra (9th arrondissement), along with the appointment of three senior partners. In a statement, David Krucik said, “France is and will remain a key market for OC&C. We continue to be committed to offering independent management consultancy to the French market.”

France is and will remain a key market for OC&C

France is Europe’s third largest management consulting market, after the UK (which combined with Irish consulting currently sees annual revenues of $23 billion) and Germany (the German speaking European consulting markets are worth an estimated $24 billion a year), so OC&C’s commitment to stymieing the loss of its talent in the region is understandable.

The country is also home to several large multinationals, including major global players like L’Oreal, Airbus and BNP Paris, while in particular following Brexit, France is positioned along with Germany to be major beneficiaries from the “Brexodus” of businesses looking to maintain access to the single market after the UK leaves the EU. From a consulting perspective, if there are ambitions to remain independent successfully then, maintaining a presence in the French market is key.

OC&C first arrived in Paris in 1989, which at the time was its third office globally after establishing UK and German presences in 1987. Interestingly, one of the earliest partners of OC&C in France, Philippe Pruneau**, who, according to his LinkedIn profile, had left the firm last December, has rejoined OC&C to lead the firm’s renaissance in the country.

The McKinsey & Company alumnus (he served the American strategy firm for four years in the ‘80s) is joined by two French partners that have relocated from the UK, Henri-Thierry Toutounji and David de Matteis. Toutounji has been with OC&C since 2005, relocating to London from Paris in 2010, while De Matteis, an expert in the consumer goods an retails sectors, also joined in 2005. “The partner team has a wealth of experience across key sectors of expertise for OC&C, with a particular focus on Consumer, Retail and Private Equity work,” according to Krucik.

Over recent months, the firm has added a number of international partners to its ranks meanwhile. James Walker, a former partner at Strategy& who leads the firm’s Analytics offering, joined in London, while the Frenchman Pascal Martin was recruited in Hong Kong. Meanwhile, Coye Nokes returned to the firm in June this year after nearly ten years working as an independent strategy consultant – she has been appointed a partner in the US. Justin Walters, a specialist in the field of Media and Technology, joined as an advisor in the UK.

The move will now see the French practice integrate with the wider OC&C international partnership, which has 14 offices in nine countries, generating total revenues of around of $150 million. “The re-launch of our French office will help us to better serve our French clients, continue to challenge established players and grow our activities in France and beyond,” David Krucik indicated.

David Krucik, Philippe Pruneau and Henri-Thierry Toutounji

The challenge ahead

Completely launching a new consulting office is no easy task however. Consulting, particularly at executive and management level is based much on personal credentials, meaning the departing partners will have taken several relationships to Parthenon-EY. This is especially true at OC&C, where the share of sales generated by partners is generally higher than at peers – a testimony to its personal and senior approach to client relationships. The approach also explains why the firm has a high share of repeat business.

OC&C will meanwhile hope that the returning Pruneau can leverage his decade long presence in France, while the firm’s two new partners in the country Toutounji and De Matteis work to establish themselves in the region, in order to maintain OC&C’s prior reputation. To bridge the challenge of the network’s latest set-back, the French team will be supported intensively by senior advisors from other offices – including the UK – in the coming months to ensure a soft landing.

The inbound Pruneau said that he looks ahead with confidence. “OC&C has a strong growth ambition for this new French office, leveraging the existing partner team but also future new additions. This should materialise in a 20+ team on the ground next year.” In 2015, at the height of its powers in France, the firm had a team of nearly 50 consultants, including nine partners, with the office generating an income per FTE of over €340,000 per fee-earner. He added that the international partnership model will provide the French team with several benefits in busness development, project delivery and office operations.

OC&C is, alongside Roland Berger, the only European outfit which currently belongs to the globe’s top 10 strategy consulting firms. The market is dominated by US firms, while OC&C currently finds itself the smallest of the top ten – in part thanks to the veracious appetite of merger and acquisition activity of rival firms. McKinsey is by far and away the largest strategy consulting firm with 22,500 employees, along with other American firms BCG, Bain, A.T. Kearney, PwC network member Strategy& and fellow Big Four subsidiary Monitor Deloitte, while EY-Parthenon holds ninth place with over 900 employees.

* The firm was founded by Chris Outram and Geoff Cullinan, both former consultants of Booz Allen & Hamilton.

** OC&C France was founded by Philippe Kaas and Ed de Sa Pereira and. Philippe Pruneau joined in 1996 after a merger with PwC’s French arm was broken off.