McKinsey Solutions purchases 4tree and VisualDoD

21 October 2015 Consultancy.uk

McKinsey Solutions, the data analytics and software unit of strategy consultancy McKinsey & Company, has recently acquired two companies: Germany-based 4tree and US-based VisualDoD.

Germany-based 4tree
Last month McKinsey Solutions unveiled that it had purchased 4tree, a German Big Data solution company serving retail, fast moving consumer goods and B2B industries. 4tree, founded in 2010 by Sebastian Hanhues and Daniel Hagemeier, supports clients across three key disciplines: retail analytics expertise, best practice statistical algorithms and highly efficient IT. With the acquisitions, McKinsey Solutions taps into the growing market for analytics-driven support in the retail landscape. A recent study by the firm for instance showed that brands with greater digital capabilities are able to convert sales at a rate 2.5 times greater than those with lower capabilities.

As part of the deal, 4tree has been integrated into McKinsey’s Periscope unit – a suite of solutions and services founded in 2007 that optimises the effectiveness of sales & marketing efforts – and rebranded as Periscope Customer Insights Solution. The acquired team will continue to operate out of its existing office in Muenster, Germany, working together with McKinsey Solutions globally (the European headquarters is based in Belgium) and McKinsey’s seven offices in Germany*.

McKinsey Solutions purchases 4tree and VisualDoD

“Companies are always seeking a better understanding of how customers make purchasing decisions with the range of products, prices and promotions available to them. 4tree allows us to integrate customer data at scale and generate actionable insights fast enough to enable dynamic assortment, pricing and promotions,” comments Brian Elliott, CEO of Periscope. Hanhues, who now serves as General Manager of Periscope Customer Insights Solution, adds: “We very much look forward to bringing together our leading edge IP and innovation in Big Data Management to Periscope’s growing portfolio of commercial transformation capabilities, enabling success for organisations on a global scale.”

US-based VisualDoD
Last week McKinsey Solutions added another team to its portfolio: VisualDoD. The Reston, Virginia (US) based firm was founded in 2012 by Michael Cadenazzi, and specialises in defence market software development and consulting. The firm’s proprietary product, the VisualDoDTM software platform, allows leaders in the defence industry to optimise their operations through the automation of analyses and visualizations, enabling real-time insights. The entire team of VisualDoD have joined McKinsey, with the product now part of McKinsey Solutions.

Sebastian Hanhues, Daniel Hagemeier, Mike Cadenazzi, Brian Elliott

“I am very excited to step onto this new path,” says founder Cadenazzi, adding “this milestone extends VisualDoD’s commitment to delivering exceptional services.  Our clients will benefit from the integration of our best-in-class analytics platform with McKinsey’s preeminent and unparalleled expertise in the global aerospace & defense space.” A survey by McKinsey’s Defence practice earlier this year revealed that optimism is returning in the industry, with largest growth in spending expected in Asia-Pacific and the Middle East.

The acquisitions build on two previous deals – in April this year McKinsey Solutions bought SATMAP (a North American software specialist that provides contact center technology) and late last year it agreed an alliance with Eversight, a provider of cloud-based sales and marketing services.

* McKinsey offices in Germany are based in Berlin, Cologne, Dusseldorf, Frankfurt, Hamburg, Munich and Stuttgart.

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Accenture's push into the creative sector is an identity crisis

18 April 2019 Consultancy.uk

In its latest push into the creative sector, Accenture Interactive acquired New York and London-based ad agency Droga5 earlier this month, adding illustrious clients such as HBO, Amazon and The New York Times to its roster of clients. With the latest in a long line of similar purchases, Accenture Interactive further demonstrated its ambition of becoming the globe’s leading trusted advisor to chief marketing officers. Yet according to Ben Langdon, Chairman of Class35, Accenture’s strategy may be heading in the wrong direction.

A press release on Accenture’s website announcing the acquisition sits next to a quote stating that “brands aren’t built through advertising” – a huge contradiction from a consultancy firm hell-bent on becoming the ‘CMO agency of choice’. It’s not alone of course. The entire consulting industry wants a piece of the creative pie right now. In addition to Accenture Interactive, recent acquisitions by PwC Digital, IBM iX, and Deloitte Digital meant that in 2017, for the first time ever, four of the world’s ten largest creative agencies were consultancies.

So just what it is that Accenture wants to achieve from this? For one thing, it’s clearly trying to be a digital transformation business. A one-stop creative shop rivalling more traditional models, it wants to lure CMOs in with the promise of lower ad spend and a “more impactful customer experience”. At the same time, though, it’s still in thrall to those same slinky, shiny branding and advertising agencies it’s attempting to disrupt. The Droga5 acquisition and that of Karmarama a few years before are both testament to this.

There’s a fundamental problem with this, though. Digital transformation businesses don’t sell to CMOs. These people have enough on their plates trying to transform their own marketing skills in order to keep up with an ever-changing market – they just don’t have the time or the energy to concern themselves with digitally transforming a whole business. If Accenture’s purpose is digital transformation, then going after creative agencies is barking up the wrong tree.Is Accenture's push into the creative sector an identity crisis?

Worlds apart

Perhaps more importantly, these two industries are worlds apart in terms of the way they think. Creative agencies are all about ideas, campaigns and consumers. Digital businesses, on the other hand, are customer-driven – they think in terms such as lifetime value, measurement, and efficiency. Customer-led thinking is an entirely different beast to consumer-led thinking.

The reality is that the arrival of digital and an all-encompassing obsession with technology, measurement and social has led to the death of agencies in a reductive, zero-sum, efficiency-focused battle with brands. Indeed, agencies have become so obsessed with the latest tech fads, they’re beginning to forget how brands work. Worse still, they’re beginning to forget how brands are built. And, by forgetting, they’re destroying their own values.

Killing creativity

All things considered, it really feels to me as though Accenture is a chip leader in a game it doesn’t understand. Expensive acquisitions like these show that they’ve got the big money, but they don’t appear to have any idea what they’re doing with it. Take talent, for example. The best talent in the creative industry right now is out in the market; it’s not tied to any one agency. Both agencies might well be at the top of their game, but why would a consulting firm waste so much money on buying them when they could hire high-quality creative talent on a contingent basis instead?

As their presence in the top 10 creative agencies shows, there is a growing trend in which Accenture, like many of the other big players, are buying up agencies as if they were nothing more than keywords. What they’re really buying, though, is a collection of credentials, clients and IP. Unfortunately, the talent that created those credentials aren’t going to stay at the business, the clients that hired the agency in the first place won’t be interested in buying what is basically just another part of Accenture, and the IP never really existed to begin with.

Droga5, for example, was one of the few agencies that did great brand work the old-fashioned way – undoubtedly something that made it attractive to Accenture in the first place. The irony, though, is that by leading it further away from the way of working that made it so special, the consulting giant will kill its creativity.

“Accenture Interactive has been dazzled by its ambitions to become the CMO agency of record…. But, in flashing its cash, it is spending millions on acquiring nothing of any value.”

If pressed, the recently acquired agency staff at Accenture will tell you just how dysfunctional the new arrangement is. They’re largely unfulfilled. Rarely do they feel their work has any sort of meaning or purpose. What’s more, the different disciplines have found little or no common ground, and find it hard to work together as a cohesive whole. It’s not surprising, then, to see talented people leaving in droves.

Beyond the window dressing 

It’s clear, then, that consulting firms and creative agencies are no easy bedfellows. But in his company’s defence, Accenture Interactive’s Senior Managing Director for North America, Glen Hartman, described its culture as being “far, far away from what a stereotypical consulting firm would look like. Our office and studios look a lot like Droga5’s.”

In demonstrating a belief that office design equates to workplace culture, this statement serves as an illustration of how confused Accenture is right now. It wants to justify its new strategy so badly, it’s started dressing like a creative agency. But if you look beyond the window dressing and see that you and your partners are speaking a different language with a different purpose, selling to different people in a different market, there’s no getting away from the fact that you’re different.

Accenture Interactive has been dazzled by its ambitions to become the CMO agency of record, and it wants to dazzle others with its new direction. But, in flashing its cash, it is spending millions on acquiring nothing of any value.

Related: Space between consulting firms and creative agencies is converging.