The Hackett Group and its president, Wayne Mincey, are helping clients make the right decisions to steer a steady course through an economic downturn.

by Peggy Cope

Major changes are afoot in the world of business and finance and administration outsourcing, and The Hackett Group stands poised to help its clients make the most of every trend. According to Wayne Mincey, president of Hackett (pictured at left), there are big opportunities out there, and they are efficiency-driven, as well as cost-driven.

“We’ve seen clients driven by near-term need to act from a cost perspective, but there’s more receptivity to learn and to better understand who’s doing what and how, how’s it going, and what can we learn from successes, as well as from mistakes,” he said. “I think in almost all cases, where we see things that didn’t go as expected, the root lies in not having done the proper amount of analysis and due diligence to understand how transactions are going to operate.”

Mincey joined The Hackett Group as president and chief operating officer in December 2003. Before that, he was president of the Spherion Technology Group, an IT consulting, managed services, and staffing company. His background comprises operations, strategic planning, financial management, and sales and market execution. Stints at Norell Corporation and as vice president of operations for Ryder TRS and group finance director and CFO – Europe for Ryder Truck Rental have broadened his scope and given him knowledge he needs to help Hackett’s clients.

The customers that outsource F&A correctly, says Mincey, look at three elements: culture, processes, and choosing the right partner. On the cultural side, companies need to ensure a good cultural fit between their organization and the provider, but they also must have a change-ready culture that’s conducive to transformation.

In the heavy lifting category is an examination of the nature of the processes a company is talking about putting into an outsourcing relationship. Companies have to ask how standardized and mature are the processes across the business, what kind of technology is in place, and how stable are their transactions. In addition, they need to know how tightly integrated some processes are to the operations of the business. When evaluating the risk profile, this will enable them to know whether something going offline will result in a vendor being paid late or shut down the supply chain altogether.

Selecting the right partner is about more than those words imply, according to Mincey. It’s about choosing the right sourcing solution, including looking at a captive model, as well as considering an offshore solution, BPO provider, or a partnership with another client that has capability in the relevant processes or regions.

“Once you know the strategy, culture, etc., you have done the heavy lifting and can talk to potential partners and choose those that line up well against your set of objectives,” he said. “If there’s a cultural misalignment, if the corporate culture will grind against what you are doing, you will be in trouble.”

It’s Hackett’s mission to help clients execute their chosen model. A company working with Hackett can gain a better understanding of whether they are culturally ready, whether the model they have in mind fits their business strategy, what their state of maturity is, and how any partner will deal with processes as they bring them over.

“The supplier community in particular would say we are adept at putting the right potential providers in the room and putting them in a position to demonstrate why they are the right fit,” he noted. In the industry, many times inherent complexities and a lack of being prescriptive have led to consultants driving clients to a rigid model. Hackett takes a different tack.

“We use a prescriptive process to see that all the elements are vividly understood. We took a traditional approach to shortlisting a community of providers that might match up, but we used a more open style of approach. When a client has different unique demands and characteristics of what they want from an outsourcing arrangement, we find that the shoebox approach doesn’t work,” he said.

In some consulting arrangements, a provider cannot talk about anything outside very specific guidelines, or even talk to the client directly, according to Mincey. “We make sure the provider knows what the nature of the potential opportunity is, and the client will understand what their strengths are, but we will put them together in a room.” Hackett helps its clients understand what some of the greatest risks are, and the challenges of a conversion. It gives providers an opportunity to display beyond what’s out there in print or on the web or in their briefings, by working one-on-one with a client to hear what they are concerned about, and demonstrate how they would try to solve or mitigate risk. This approach is leading to deals that have a greater chance of success as a result of a more direct meeting of the minds.

Mincey notes that although Hackett is a public company, it operates more like a partnership. Like other Hackett executives, he is not compensated solely on areas he oversees. “We are all paid according to growing and developing Hackett. Are we doing the right things for clients, and for the firm?” Hackett employees engage and build relationships at the client level. “Hackett has a war chest of capabilities to help clients improve performance in sales, general and administrative (SG&A) processes,” he said.

“What we try to do is understand client’s needs and bring elements of benchmarking, on-ground transformation, and advisory skills to bring the right solution to the client. That includes transformation work on-site, as well as multi-year advisory relationships. Others choose pure advisory relationships. Hackett’s role is to help executives drive performance improvement and try to achieve world-class performance, whether it’s in F&A, HR, procurement, or other areas.

Mincey’s personal mission is to make sure the client’s enterprise is healthy, by building intellectual property, quality of resources and team, and he emphasized that all of Hackett’s executives consider themselves to be client-facing and partner-facing. In the wake of ongoing changes in the economy and the marketplace, Hackett is working to help its clients stay ahead of the curve.

“Everybody else is trying to respond,” said Mincey. “We tried to get out ahead of this late last year with a story we drafted, and more than anything we were trying to make sure clients were looking forward.”

He noted that when he goes into a business and looks one level below the C-suite, everybody tends to be moving along at the current course and speed. They don’t really realize the person in the corner office has probably begun to worry and discount some projects and initiatives they had planned.

“That’s what we were seeing in the fourth quarter of last year. I would call on someone who was getting ready to look at a restructuring, set up an offshore captive, BPO, laying the groundwork for that, thinking about a full-scale benchmark … I would find out later they were not going to spend a penny, that they were curtailing all discretionary spend for some time.”

When Reducing Costs, Be Smart About it
His advice for companies in uncertain times is to make sure they do not reduce costs indiscriminately. “Be careful where you take cost out,” he said. “Even if you don’t have time to do a full benchmark, take advantage of what someone like Hackett can do in helping you see where you might be fat—and to see where the last place is you want to cut into.”

When going into an unstable environment, the last place to cut out is analytics that help support sales or do a better job of supply chain management. “Don’t be caught flatfooted,” Mincey warned. “Be smart when you reduce costs.”

In addition, he advised, companies need to pay attention to their balance sheets and get their working capital in line. “Go and see if your credit policies are being followed. Are you extending credit to the right people? Are your clients paying to term?” Mincey cited one Hackett client that is in great shape on the receivables side, but is paying its own bills eight to nine days sooner than it has to. Since they are in good shape, they are not paying as much attention to the balance sheet as they should, he said. “Some people will default, credit has tightened—you have to make sure you get all that in order. You can lose money for a long time, but you only run out of money once.”

Sometimes, Mincey noted, a rough economic climate provides a call to action, an opportunity to rally the organization differently than you could while times were good. A soft economy is a great time to look hard at a company to make sure it is built to be a high-performance organization and deliver on that over the long term.

“If you take a hit, you might restructure anyway, so step back and really look at it as a blank sheet of paper. If we design an organization for maximum competitiveness, how would we organize finance? What decisions would we make about sourcing? How would we get technology in line to let us perform with the speed and quality and efficiency we know we need to over the long term?

“Paint the long-term picture,” he added. “Maybe you can’t do it all now, but while times are tough and you need to be efficient, lay out a strategic plan, take the initial steps for cost reduction to be part-and-parcel of the longer-term plan.”

Mincey’s advice comes from deep knowledge about facing recession. When he was just out of college and in his first real job as a controller in a big international business at the division level, the 1982-83 recession was in full swing. Following that came the recession of 1991-92, and another one in 2000-2001. Paradoxically, the knowledge gained from those experiences has been a bit of a boon to Mincey’s career.

“We have some young people around here who are smarter than I am, but they have never gone through a level of recession like 1991-92. I think if age has given me one thing, it’s that I’ve survived two serious downturns,” he said.

Another benefit he cited was a background that’s more eclectic than most. “I’ve had a chance to do everything meaningful in the SG&A world,” he noted. When he talks to groups of executives now, it’s rare to find one to whom he can’t talk first-person about the complexities and thought processes they have experienced.

“I have worn the shoes of many of the people we try to advise, and that, combined with the experience of having gone through the downturns, puts me in a position to help a few clients,” he said.