CEO’s brief to the PA Retirers Association – 5 March 2009
In 2008, despite the uncertainty in the world economy, PA delivered a strong performance during a great first half to the year, combined with a second half where we managed to continue to do well despite the general downturn in the economy. We are all proud of the full year's result – another best-yet performance for PA – made even more remarkable as we have all seen many organisations, and a number of our competitors, struggle over the last few months.
I’d like to share with you today:
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some of the recent business highlights, including how we are helping our clients through this period of economic downturn and uncertainty
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our on-going people development programmes
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how we are tackling this coming year and reassurance that PA’s business model, and business standing is secure.
Recent Business Highlights
Despite the softening in the market, we have had some notable successes already in 2009:
Jobs I can tell you about include:
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helping IVECO, Fiat Group’s commercial vehicle division, on the road to radical performance improvement. After years of continual growth, producers of commercial vehicles are experiencing a radical loss of market as well as margin. Based on PA's excellent work for Fiat Auto between 2005 and 2007, the objective is to radically improve performance by identifying, qualifying and delivering > 15% of savings for 15 focus systems of the entire vehicle range, covering Light, Medium and Heavy class vehicles. The PA team is made up of 10 consultants from several practices and regions and the project locations include the Italian headquarter in Turin as well as Ulm in Germany and Brescia in Italy. Together with the most recent wins at Liebherr and Daimler Trucks, this is another big win for PA's Commercial Vehicle Sub-sector Team.
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playing a key role in the implementation of ContactPoint, an IT system that will allow those working with children in England to find out which other services are working with those children. PA is working for the UK Government’s Department for Children, Schools and Families to produce a system that will help to improve coordination between agencies and, when fully operational, it will save five million man hours of practitioner time which can be re-invested in children’s services. PA’s Andrew Heley said: "This is a high-profile and challenging project and PA has provided expert client-side support, including programme delivery and project management, design assurance, integration of external systems, and implementation. We are delighted that it has now reached a key milestone by gaining ministerial approval to move to implementation." The initial stage of implementation is utilising an Early Adopter Model in 17 local authorities in the North West as well as two national voluntary organisations: Barnardo’s and KIDS. Evaluation from this Early Adopter group will be fed into the national rollout which is planned for later this year. ContactPoint is part of the wider Improving Information Sharing and Management (IISaM) programme and, when it is fully in place, could be accessed by up to 390,000 vetted and trained users.
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winning a contract to upgrade the customer information system of Aqua America, the largest US-based publicly traded water company. The company provides water and wastewater services to approximately 3 million residents in 13 states, and has been growing rapidly through acquisitions since 2002. As a result, they have faced a number of challenges in standardising processes and PA has successfully delivered a system to automate the process of closing the service orders maintained in their Customer Information System. Building on that success, PA has now been asked to draw up a plan to improve the company’s service order processing and now to implement the recommendations in that plan.
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we have been recognised in the national business press as being a thought leader in the areas of cost reduction, innovation, product development, and operational improvement - capabilities that will help our clients join the significant minority that can flourish in this economic climate.
Let me tell you a little more about this. Mark Thomas, the Head of our Strategy and Marketing Practice, working with our Global Cost Reduction and Corporate Turnaround Team, have produced a significant piece of Thought Leadership on the subject called "Surviving and Thriving in the economic crisis". The book has now been distributed to over 1,500 UK CXOs as well as getting coverage in the UK national press. Additional books and approaches to the market are now being produced in the USA, Nordics, Netherlands, Germany and India.
Great people development remains at our core
Attracting, developing and retaining the best people remains a key focus for us. In 2008, we strengthened this approach by launching our "Growing in leadership" initiative – designed to inspire, motivate and support our future leaders. We delivered over 600 training initiatives and our scholarship programme continues to support our best talent through MBA or executive-level programmes. We promoted 20 people to Partner, increasing the Management Group by 15% and we also helped another 360 people continue to develop their responsibilities by promoting them to the next rank.
You’ll be glad to hear that we have included our ex-employees in our people development approach too. We have always had local active alumni networks, and we are this year looking to roll out a global programme of events and communications that will engage with this community worldwide.
Managing the year ahead in PA
As a result of the economic turmoil, our ability to win and deliver work is harder now than it was a year ago and it looks set to be a tough year or two ahead. We are not immune to the market conditions – but our business is built on sound and mature principles that will keep all our people safe in the coming months.
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We are in a strong financial position – in the boom times some people were concerned that PA had too much cash and even as the world dipped into negative growth last year some were saying "we should buy a competitor, use the cash, take debt, be ambitious, grow headcount". Well we are glad we did not – our approach allows us all to share in the security of having no debt to service and no loans to renew.
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We have always been a well managed firm. We take care not to carry too much cost, we set our headcount to match our sales and we have systems that allow us to see, on a weekly basis, what we have done and what we can expect to do in the coming weeks. Many organisations do not have this luxury.
This will be a challenging year for everyone, inside and outside of PA, but we feel we are both well positioned and well prepared to prevail and I look forward to updating on our continued success in six months time
Best,
Alan
