CEO announces to Principals and Directors that an Independent, Privately-owned Firm is the Preferred Model
London, June 7th, 2002 - In the first major strategy presentation since the announcement earlier this year of the intention to separate from Deloitte Touche Tohmatsu (DTT), Deloitte Consulting CEO Doug McCracken formally announced to the firm's global partners that Deloitte Consulting's Board of Directors had unanimously determined that the worldwide consulting firm should move forward in the development of a plan to become a privately-held company.
McCracken explained to the 1200 partners and directors gathered in San Francisco that Deloitte Consulting's preferred business model is for an independent, privately owned and client-focused consulting firm.
McCracken expressed his belief that this model will put the firm, its people and its clients in the best position to succeed. He introduced a two-day discussion by outlining his vision to create a stand-out
consulting firm, built entirely around the need of clients.
David Owen, UK managing director of Deloitte Consulting said: "We have built up a strong business in the UK. Our entire business, its systems and rewards are built around delivering value to UK clients. We took a hard look at our industry and believe that independence and private ownership will enable us to stay true to our core values - the values that make us the firm of choice for our clients."
"Our focus will be where it should be - our clients," commented McCracken. "While others appear to be backing away from the term 'consultant', we are embracing consultancy as our business and accepting the challenge of creating a more relevant professional consulting model. We intend to redefine the consulting industry."
Since its separation from Deloitte Touche Tohmatsu was announced February 6 of this year, Deloitte Consulting has evaluated options for its future operating model. The other options include a merger; a sale to another firm; an initial public offering; and an arms-length relationship with DTT.
While stressing that Deloitte Consulting will retain the size, scope of service, values and culture that make it one of the world's most successful and highly regarded consulting firms, McCracken underlined the changes already taking place in Deloitte Consulting to fulfil its vision of being entirely built around the needs of clients:
* Significant innovations around aspects of the entire business to directly address the needs of clients - featuring new internal measurement and reward systems directly linked to the firm's ability to deliver value to clients; new client-facing roles for senior principals who previously led practices or served in senior management roles; teams reorganised around clients; R&D embedded in clients' organisations rather than the firm itself
* Exploring new types of relationships with clients such as joint ventures & profit sharing, that only become possible with independence
* The creation of a new name and brand later this year for the firm, which will be focused entirely on providing consulting services to clients.
"We have maintained that we cannot put our clients in the position of having to choose between working with the world's best auditing professionals and our world-class colleagues from Deloitte Consulting," said James E. Copeland, Jr., chief executive officer of Deloitte Touche Tohmatsu. "We support this direction and fully expect Deloitte Consulting to continue to be very successful."
While significant elements of the plan have not yet been determined, when the details of the separation structure are completed and accepted by the leadership of both firms, the separation proposal will be subject to a vote by the Deloitte Consulting and DTT Boards of Directors and the boards of DTT's member firms. Also, the separation plan will be submitted to a vote by the partners and principals of Deloitte Consulting and the affected member firms of Deloitte Touche Tohmatsu. The proposed
separation structure will also be subject to regulatory approval. The separation is expected to be complete by the end of this year.
The firm's new name and positioning is being determined with the help of the noted brand consultancy Interbrand, and is expected to be revealed ahead of finalization of the separation.
"We have great respect and appreciation for DTT and we've built relationships within the firm that will endure," added McCracken. "In reality, Deloitte Consulting has been autonomously managed and governed since 1996 and the separation is a legal and functional transaction. The market has changed, partly in response to the Enron issues but also because business problems are becoming bigger and more complex, and we believe that as a private firm we can best meet the needs of the market."
About Deloitte Consulting
Deloitte Consulting is one of the world's leading management consulting firms, and is uniquely known for its straightforward approach to solving today's most complex business challenges. Deloitte consultants work hand-in-hand with clients to improve business performance, drive shareholder value, and create competitive advantage. The firm has 14,000 professionals in 33 countries, and serves more than one-third of the companies in the Global Fortune® 500. Deloitte Consulting can be found on
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NOTE: Deloitte Consulting is legally structured as a limited liability enterprise, and its leading professionals are designated "principals." Because it evolved from a partnership tradition, the firm values the spirit of "partnership" and refers to its principals as partners in this press release.
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