Big vs Small Companies — Transcript
[00:00:00.00] Ken: So, we’ve both worked in large firms and small firms, maybe for me one small firm, the one I founded, but I just wanted to talk about the differences. The most trite answer is, you know, boo, big firm. you know, yay, small boutique firm. But I actually have very, very fond memories of being a cog in the wheel of a large machine, and when I first joined, this was a large, this was part of an accounting firm and we were a management company. consulting branch in the Seattle area, but management consulting had just broken out in the Seattle area. So we were a relatively small group when I joined. I think there were about 20 people, and they viewed themselves as very elite, which appealed to my ego. I always wanted to be part of an elite team or something like that. But in the big firm, my bosses were fun. I learned a lot from ‘em. The camaraderie, and we’d grown to, gosh, close to 60 people by the time I left, and I wasn’t there that long. I was there six years, and so it was kind of a pretty big growth pattern. I had access to amazing resources, things back in the day before the internet really took off. There were a lot of books and research materials you needed to do your job that were prohibitively expensive for a single shingle person, but I was able to have access through that. the firm. I loved the casual conversations I had with peers. It helped me grow. I hope I helped them grow. Some of it was just those water cooler conversations. “Gee, what’d you guys do this weekend?” or, you know, “How’s your kid?” or something like that. But the bonding was incredible, and likewise, associated with that, I sort of mentioned learning. from peers and supervisors, but I learned a ton from my peers. Initially, it was kind of low pressure for me to sell. As you got further up in the organization, it was higher pressure. There was always pressure to be busy. There were always numbers associated with you somehow, the revenue you brought in or something like that, but it wasn’t expected. when I went in as an entry-level consultant that I’d sell a ton of work. I was expected to keep busy because that showed I had some talent in consulting and people could rely on me. The downsides of a big firm, and then I’ll maybe go through my small firm list, is having to be in an office, particularly when I had little. to do those days we were, we called it on the beach when you didn’t have billable hours. Office politics and romances, I saw more than my share, had more than my fill in those six years. Never wanted to see that again. In my case, there was vague expectations about professionalism. you know, how to dress, going golfing, spending time with your peers, volunteering for committees and things like that, that I just found trivial and not serving the client. There was always a lot of bureaucracy. I’ve told the story and perhaps here before of when I needed a set of erasers for some work I was doing, I always worked in pencil, and those erasers that are in the little plastic, the Pentel erasers, the click erasers that are in the little plastic thing that look like a pencil that you can just click out an eraser were brand new, and I had to go through channels to get those. I think I ended up ultimately buying them myself because our our comptroller didn’t think they were necessary because we had a bunch of other erasers anyway. So it was like whatever, you know, kind of thing. I think the biggest downside for me in a big firm was I became typecast, and that being, I was one of the few people that had some technical background. Now, I didn’t go to school for technology or anything. like that, but I did kind of support myself through graduate school. I had a knack for doing technical things and I managed to, I came into the firm in part on those coattails of my technical knowledge, but I became tasked as a tech guy and I was as good as a strategic or management consultant. if not better than I was a technical consultant, but I got typecast within the organization relatively quickly to the point that any technical issues would come through me, some of which I found fun, but some of which I found limiting. So that’s kind of my goods and bads of a big firm. You want to do that? And then maybe we can go into small firm.
[00:05:22.74] Jim: - Yeah, so I enjoyed both. I enjoyed both the big firm and the small firm, and the big, for me, the pluses were the training and the caliber of people I got to work with and learn from, it was second to none. I’m sure you had. the same sort of training where I mean some of it was just charm school where they just taught you professionalism and how to interact with a client and you know they were they were amazing at that stuff and then some of the training that I received on more technical aspects like project management. and sort of the psychology of working in teams. Just, you know, the very best people were brought in and worked in a fancy office with a marble lobby and all that. So, you know, that’s when you’re young, that kind of thing really makes you feel good, I suppose. Some of the downsides were, yeah, the cube farm when I had to be in the office and the things you’re over here and you have to experience being in an area where, I don’t know, just lots of stuff going on that’s not very professional and you don’t really want to be a… part of and then I eventually left the big firm part because you brought this up in an earlier podcast but the the process of partner sniffing where they’re trying to determine whether or not you’re gonna be a fit I I was just appalled by the the the unveiling of some of the business practices, and I worked for a good company and a very ethical partner. It’s just, there were others involved that kind of drove me away the slippery ethics, and then I just recalled one event that happened right before I left. was that a senior partner in a fairly large office for this big consulting firm had made a pledge to a specific named charity and told them that the office in Seattle would, he pledged 95% participation of all the employees. But where this guy got off pledging my and other people’s money to this charity is beyond me, and he sent out the memo that you’d get periodically working in such an office saying that he expected more than 95%, and they were going to, the charity was going to let him know who contributed and who didn’t, along with suggested contributing amounts.
[00:08:27.76] Ken: The beatings will continue until morale improves.
[00:08:30.57] Jim: Exactly. Yeah, and so, and it’s not just the money.
[00:08:35.76] Ken: What was. That’s very much the principle. I get it.
[00:08:40.06] Jim: - The principle was horrible, but what was, you know, as consultants, we’ve dealt in unintended consequences. You know, every reaction has a opposite reaction. Well, what it did, and I couldn’t have foreseen this, but. What it did was it quickly divided the office because since it was a named charity, you’re dealing with a bunch of analysts. They all went and looked up what this charity actually did, and it was a national charity that mostly you’d say, well, yeah, they do good, so I’m not worried about it. But they all looked it up and half of them were quite offended by some of the things this charity did, and the other half of the office was offended that some of the staff were offended by what this charity did. So it quickly like separated people, not even having to do with the expected contribution, but how on earth could you be such a Neanderthal to not support this?
[00:09:45.46] Ken: Group. I think we may have had the same charities. There was an annual drive at our place, and I was like, yeah, okay, just get out your wallet and shut up, you know. Yeah, same thing.
[00:09:59.26] Jim: Yeah. So that’s a downside. But all in all, the plus sides of a large firm, they They have the money for compensation. Most of them are fairly stable. At the time we worked for them, I think layoffs were fairly rare. I mean, I saw some, but you’d have to–
[00:10:23.87] Ken: - It was generally for lack of competency that they, and layoffs, they’d basically. We called it “counseling people out,” but it was basically firing somebody.
[00:10:34.84] Jim: Yeah, and they telegraphed it so far ahead that you’d have to just be dumb to not see it.
[00:10:40.63] Ken: Well, and you’d know it. You’d know it. You work with somebody on a project for three weeks and you know whether they were going to make it or not. It wasn’t rocket science. Some people were hires, you know. Yeah. You brought a couple of questions to my mind, and then maybe we can go into the, I’ll go into the benefits and downsides of a small firm, which are in some ways just the opposites of a big firm. But, you know, you said you got to work with a bunch of brilliant people. Using 2020 hindsight, looking back. Were all your peers brilliant as you said that, I thought, you know, probably, gosh, a larger percentage of my peers were, though at the time I sort of felt they were, wow, I was wowed by them. I’m not sure I would have been once I’d had 10 years of experience or something in the I’m just curious if you felt the same way.
[00:11:41.96] Jim: - Well, so not all of them were brilliant, and if I said that, I was misspoken. So at a–
[00:11:51.00] Ken: - You didn’t quite say it that way. I just thought, yeah.
[00:11:53.57] Jim: - Yeah, it’s good not to leave the impression. At a staff level, the people I didn’t get along– with were whiners, and they were whiners about things that they had just walked in the wrong door. It was time to show them out and there was a place where they would be happy, and the easiest example is there were at least two people who daily whined about being that we worked in Seattle. that they should be working at Microsoft and they would not be happy until they got the coveted position at Microsoft, and that was usually driven, let’s admit it, that was usually, at the time in Seattle, that was usually driven by greed.
[00:12:39.19] Ken: - Yeah, yeah, ‘cause Microsoft was offering big stock options and stuff like that at the start.
[00:12:44.09] Jim: - Yeah, yeah, they’re thinking. was all those people are going to be made millionaires, and there was a certain time period where that was true, and so we had a couple of those. We had another one that was just whiny and I never understood why, and he quickly left, which was fine. He went somewhere else. Just somebody who, again, walked through the wrong door. It didn’t get the sort of the fame and fawning over that he was expecting, and I didn’t know him long enough to ever figure out what
[00:13:21.00] Ken: What he was good at, if anything. The second question, and this may be a topic in and of itself, but maybe we can go quick through it. Partner fit, you know, the SNF test for partner fit, which I started going through, too, and left for pretty much the same reason you did, was really about kind of two things. One was your ability to sell work. But the second was, will you continue to flog the machine, meaning, you know, do whatever is necessary? to get, make staff as profitable as possible. Was yours, did you have any different criteria that you saw? Cause I saw people become partners that in no way had competence in consulting or anything, but they could sell ice to Eskimos as the old joke goes. Yeah.
[00:14:15.53] Jim: Yeah, absolutely, because that’s that was part of the process was before it was my turn to be sniffed, I saw a couple of other people go through that process and to my sort of consternation, they were quickly promoted to partner on some ethically challenging revenue streams. Right, right. So, you know, where you watch a million dollars be vacuumed
[00:14:53.52] Ken: up where a hundred thousand probably would have been in order. Right. So, for a small firm, the reason I, I loved our small firm. firm, because I felt we had more freedom, and by that I mean control of my destiny. I was able to reinvent myself. I wasn’t typecast. I mean, I could be the technical guy, but I could also be a strategy guy or a management guy or something like that. I sort of liked being in charge of my own fate, and I kept the, I think we kept the idea that we were an elite group, so that appealed to my ego. Like I said, I’ve always enjoyed being part of a winning team or an elite team. Some of the downsides were lack of diverse camaraderie. We had camaraderie for sure, but when there’s six or ten or even 60 of us, it’s not quite the same. You know, I can’t call our national headquarters and say, “Who’s an expert on whatever?” and get much answer. In some ways, the downside involved lack of bureaucracy because there was nobody there an eraser. Now I didn’t go crazy with it, but we did have people who had to be kind of counseled that just because we didn’t have a big bureaucracy you had to go through didn’t mean you could do whatever you wanted. I think a downside was we had to eat what we killed, and by that I mean So we were successful. The sales burden fell heavily on you and I at the end. There were other partners in there. For me, that is not a natural strength. I’m not sure it is for you. So I found a way to adapt who I am to selling things and that worked and that’s. probably topic for another time. I had to do things I never would have had to do in a big firm, human resources, accounting, you know, not only say, well, I would have had to do sales, but there were things I had to learn to do until we started outsourcing, and I think for me, I learned from our peers but it seemed like there were fewer resources for learning, you know, be it courses or, or whatever. So I, you know, I think I, I missed that in a big firm, you know, or take this course or you can go take this set of courses and those sorts of things, and I could do it, but it’s always a trade-off when you need billable hours or something to make your rent, going to paying to not only go to a course but not have billable time associated with it is problematic. So, how about you, the small firm side of things?
[00:18:05.47] Jim: So on the small firm side, I enjoyed the camaraderie of it and we were fortunate enough to have either hired or attracted or word got out, I don’t know, that we did work with very high caliber people. and all and but I would say the thing that probably other than sort of being repulsed by the partner sniffing and and moving on was the opportunity presented to go to a smaller firm that I knew about and that was already specialized and I had already made the decision to specialize in my consulting and so so that allowed me to be able to be in a firm whose culture you know reflected working for state agencies and for the most part health and human services and sort of related areas.
[00:19:09.32] Ken: - I think that was our, yeah, I think that was our, definitely our core, our core market, and some things grew out of that, just, but they were tangential. The core was always the health and human services market.
[00:19:25.95] Jim: - Yeah, and then you and I shared the same caution around doing anything that would be questionable, and so it was just nice to be able to work on projects and be able to wrap things up and know that everything we did would be able to survive an audit, and nothing I did at the big firms. I just simply didn’t have the control, but there were things I worked on that sort of raised an eyebrow as far as if somebody comes digging into these records where it would end up.
[00:20:06.62] Ken: I think it was a little bit more for me, and then maybe we can wrap this up. Also, I wanted to feel good at the end of the day that I tried my best to put the client’s interests first and did what was best for the client, and I didn’t always feel that way in a large firm. So that’s, you know, I think that’s probably sums up the reason you and I both left the big firms and ultimately got together. you know, try your best to do the right thing for the client, and that wasn’t always possible given the pressures of a large firm.
[00:20:47.31] Jim: That’s all. So, oh, go ahead.
[00:20:52.30] Ken: Oh, I was just going to summarize my thoughts about it. There were, there are pluses, and as you said, there are pluses and minuses to both, and. Just, you know, and we probably said it, big firm has resources to allow you to do things and that includes peers and camaraderie and all those things. Smaller firms have a smaller version of that, but the resources are more limited, you know, so. Anyway, go ahead, finish. You were gonna, I kind of interrupted.
[00:21:23.18] Jim: I think you were gonna go to the positives or the negatives. I was just gonna add that the frustrating for me probably to summarize the big firm was I just got tired of these edicts that would come down from people I had never met, didn’t know, had no chance of ever meeting, and that felt like I was being shot from outer space. I mean, they were just so silly and ridiculous, and I’ll just mention two. One was we were putting together a bid for a state agency that was several million dollars in consulting fees, and this is when consulting was relatively new to the big accounting firms that we worked for. You remember that accounting and tax side controlled everything, but the consulting side actually brought in much more in revenue. So it was a uneasy tension, but I remember we were gonna bid consulting. project of several million and a tax or accounting partner nixed it because it was a conflict of interest with a long-standing client.
[00:22:45.33] Ken: Gee, we have a $25,000-a-year accounting engagement. Exactly.
[00:22:51.27] Jim: Exactly. that more than once, and it made no sense at all. But the response I always got was, he’s a partner and you’re not.
[00:23:01.98] Ken: - Yeah, yeah.
[00:23:03.07] Jim: - Next question, please.
[00:23:04.26] Ken: - Yeah, yeah.
[00:23:05.76] Jim: - So that, and then the other one was, the last edict that I suffered from was being told, And I brought this up in another podcast, but it still resonates with me. Being told that the company would no longer work for small states, regardless of profitability, they were making a strategic decision, and at the time, I was working with Montana. Rhode Island, Idaho, Wyoming.
[00:23:42.17] Ken: - Actually, that was pretty fortuitous for us. I mean, ‘cause yeah, we just said, “Yeah, we’ll take ‘em.” Whatever.
[00:23:48.81] Jim: - I said, “For real?” So what’s next for me? Because I actually lived in Idaho at the time, which is a good launch point for all of those places. except for maybe Rhode Island, and they said, well, we’ve looked at that and you have your pick of the Chicago office or Miami, Florida.
[00:24:14.46] Ken: (laughing) - You want to smash your hand with a hammer or your foot with a hammer? Yeah, right?
[00:24:23.02] Jim: I just said, you know, I’ve, yeah, the nature of this business has already moved my family to three different state capitals, and it won’t survive doing that. So, yeah, those are the differences, and I don’t believe we ever imposed, you know, stupid stupid things on people. You know, as I’ve always said, I can’t stand being in a big company who’s profitable and doing good work that asks smart people to do dumb things.
[00:24:57.29] Ken: Well, I hope we didn’t. But, you know, that’s probably a topic for an interview with some of our former staff. Yeah, could be.