As we work our way through the Great Recession a popular conversation topic has been to ponder the “shape” of the eventual recovery. Will it be a U, a V, a W, or?…pick your letter!

No matter what your answer is to this question, we are starting to see some encouraging signs of optimism in the marketplace.

In addition to our financial services and life sciences practice areas, we are seeing good signs in the technology sector.

Many technology companies are beginning to strategize and implement their plans for growth. Even though they may still be operating under austere cost-control programs, the fact that they are thinking ahead signals a shift in mindset from “we must hunker down and ride out the storm” to “lets get going and start growing!”

What are the root causes of this shift in sentiment towards the positive side? There are many plausible reasons:

• The current stock market rally
• The much talked about “green shoots” that the Obama administration is planting and promoting
• Federal stimulus funds
• Mostly positive quarterly earnings reports from technology companies

Or perhaps it is just that management teams realize they must do something to revitalize their company’s fiscal year performance! Regardless, it is nice to see technology companies getting back to their normal pursuit of growth by any means.

Hopeful business executives are looking towards the future and making IT investments accordingly. What are some of the factors driving this behavior?

• Unlike the “dot-com” melt-down that kicked off the decade, this recession was definitely NOT precipitated by the tech sector. Ironically, the very sectors which led us into the economic abyss (real estate, financial services, retail, CPG, manufacturing) can now make very well justified technology investments (yielding solid ROI at low risk) which can help them emerge in a stronger competitive position.
• The software and IT services solutions that have low financial and business risk exposure are growing. For example, SaaS software solutions (like Salesforce.com) and managed hosting solutions (like Rackspace) are doing well.
• The concept and application of Cloud computing is growing. Leading companies such as Google, Amazon, and Microsoft are making massive data center investments, which are also resulting in excess capacity that they are offering to other companies at attractive rates.
• The growth of virtual work and the resulting “flexible workforce.” Work across all functional areas is becoming more project-based (something that has always been true for IT work!) This combined with an increasing desire for work/life balance has led to the growth of the flexible workforce. Technology has become an enabler for this dynamic in that cheap computing power and global communications technology enable consultants and other “virtual” workers to be highly productive regardless of their location. Employers benefit from this trend because they can now bring expert talent to drive specific results more cost effectively than the traditional full-time employee. (NOTE: This trend is something that M Squared Consulting is monitoring very closely, as our business model is predicated on delivering expert talent on-demand to our clients.)
• The Oracle acquisition of Sun. This was a game-changing move (Oracle expanding its footprint from the traditional infrastructure software and business applications by buying into the hardware and systems business) which will have far-reaching strategic implications for all the players in technology sector.

Is it too soon to call an end to the recession? Yes, but that doesn’t mean these encouraging signs from the technology sector can be ignored either.

It would also be foolish to sit idly by and wait for irrefutable proof of the recovery, because history proves that will come well after the fact. One lesson that we can take from past downturns is that major new technologies and truly transformational socio-economic trends are born in market turbulence.

At M Squared Consulting we are dedicated to helping our clients across all business sectors, including technology, to transform their businesses and capitalize on growth opportunities.

ExecuNet’s Recruiter Confidence Index (RCI), which had soared 29 points during the previous three months, remained near its recent high in June, as the executive search industry continues to see signs of an employment market recovery emerging in the second half of the year.

Introduced in May 2003, the Recruiter Confidence Index is based on a monthly survey of executive search firms conducted by ExecuNet. Designed to forecast job growth at the executive level, a reading above 50 percent indicates recruiters expect the number of search assignments in the next six months will increase. Independent analysis of the RCI has confirmed it is a leading indicator for the executive employment market.

According to June’s survey of 145 executive recruiters, 50 percent are confident or very confident the executive employment market will improve in the next six months - down from 57 percent last month, which had marked the RCI’s highest level since June 2008 - but well above a February 2009 reading of 28 percent. In the second half of 2009, these executive recruiters expect an 11 percent increase in search assignments received from corporate clients.

“Recruiters’ outlook for the executive employment market during the second half of the year suggests that the bottom of the recession is now in their rearview mirrors,” says Mark Anderson, President and Chief Economist of ExecuNet. “While recruiters are not expecting to see hiring rebound overnight, professionals seeking opportunities to take their career to the next level should have a plan in place to increase their visibility among search firms and their peers.”

Executive Search Firms Hiring Plans

The research revealed another leading indicator: executive search firms’ own hiring plans have stabilized in recent months following a precipitous drop in future staff-related growth plans dating back to last fall. In June, ExecuNet’s benchmark Search Firm Hiring Index revealed that 13.6 percent of 145 responding executive recruiters report their firms plan to hire additional professional staff in the next three months, down slightly from 14.3 percent in May.

Recruiters’ short-term confidence increased significantly in June, as 27 percent report being confident or very confident the executive employment market will improve during the next three months - up from 19 percent in May.

Our experience at M Squared Consulting is that full-time hiring trends tend to mirror demand for interim and consulting professionals. As we begin to emerge from the recession there will be many companies searching for the talent they need to grow. As a result there will be opportunities not only for highly skilled full-time knowledge workers but also a large number of interim and consulting positions.

Each quarter the Conference Board conducts a confidence survey of about 100 business leaders across a wide range of industries.

The Conference Board Measure of CEO Confidence, which had increased in the first quarter of 2009, increased dramatically in the second quarter. The Measure improved to 55, up from 30 last quarter (FYI - a reading of more than 50 points reflects more positive than negative responses).

“CEOs are considerably more optimistic than last time about the short-term outlook, however, their assessment of current conditions, while also improved, suggests the economy remains weak,” says Lynn Franco, Director of The Conference Board Consumer Research Center. “Among those expecting an increase in profits over the next year, the majority see cost reductions as the primary driver.”

CEOs’ assessment of current economic conditions was considerably less pessimistic. Now, 32 percent claim conditions have improved compared to six months ago, up from zero percent last quarter. In assessing their own industries, business leaders were also much less negative. Now, 24 percent claim conditions are better, up from just one percent in the first quarter.

Looking ahead six months, CEOs are much more optimistic. Nearly 55 percent of business leaders expect economic conditions to improve in the next six months, up from approximately 17 percent last quarter. Expectations for their own industries were also more optimistic, with 45 percent of CEOs anticipating an improvement in the months ahead, up from 26 percent last quarter.

On the issue of profit expectations over the next 12 months, 46 percent of executives anticipate increases. Executives engaged in the durable goods industry are the most optimistic, with 77 percent expecting profits to increase. Executives in the non-durable goods industry are second, with 64 percent anticipating a rise in profits.

Among chief executive officers who expect profits to increase, 56 percent believe cost reductions will drive profits up, while 33 percent cite market/demand growth as the main source of improvement. Only 7 percent cite new technology as a driver of growth and the remaining 4 percent cite price increases.

Regardless of your industry or geography, as the “Great Recession” has unfolded we’ve all had a front-row seat to witness the carnage. While this survey does not indicate we are completely in the clear it is one of many signals that we are starting to emerge.

The M Squared Consulting “talent-on-demand” business model has proven to be an enabler for those companies wanting to harness the expertise and power of seasoned project professionals to deliver results. Strategic organizations - those that have weathered the storm and embraced the resulting changes - will be ready to capitalize on the opportunities before them. We’re here to help.

The Bukhara restaurant in Delhi is routinely voted the best restaurant in India, the best Indian restaurant in the world, and one of the top 50 restaurants of any cuisine in the world. I recently read an article that delved into the “secrets” behind its success. Believe it or not there are many lessons which are directly applicable to business consulting.

The restaurant did not get its top rating because of fancy decor. The style can best be described as rustic: diners sit on log benches and eat at rough wooden tables. There is no silverware or fancy place settings - diners eat with their hands at this restaurant. Bukhara takes no reservations, and the crowds regularly line up in the lounge waiting to get in.

Nor has this restaurant built its reputation through culinary innovation…the menu has not changed in 37 years. It offers a simple and straight-forward menu from the northern frontier that features mostly meats and breads, few sauces and even fewer vegetables.

So what makes this restaurant so special? Bukhara simply excels at execution.

Even though the dishes they create are similar to what one could get elsewhere, theirs just taste better. Some of this comes from using the very best ingredients. But most of it comes from the skill of the cooks.

The head chefs at Bukhara have been with the restaurant for more than 25 years. The kitchen is structured in an apprenticeship model, in which new employees slowly learn the craft of Bukhara’s menu and then spend a lifetime working in the restaurant to perfect it.

The kitchen has another interesting management practice.

In most restaurants, staff cook their own meals, often eating whenever they can between shifts. At Bukhara, the head chefs are the ones who do the cooking for rest of the staff, a great example of “servant leadership”. The chefs actually do the work instead of supervising!

The company that owns it is not worried about competitors trying to copy Bukhara, despite the simplicity of its concept. Even if one of the head chefs left to start up another restaurant, taking all that knowledge with them, the system and practices in the kitchen that support the execution of the dishes would not be there, and the competitor would not be as good.

What’s the lesson here?

The entire business strategy of the best Indian restaurant in the world rests on the ability to perfect and then execute what is otherwise a very simple and straight-forward product, something that would appear to be extremely easy to copy. But something that takes an extremely long time to accomplish.

In essence, the secret comes down to perfecting their simple recipes and cooking methods, codifying them into best practices that are retained within the organization and used as a benchmark for all training. Finally, it all comes together with flawless execution.

There are many parallels to the world of consulting, particularly the style practiced by M Squared Consulting. Our business model is built on being able to offer clients best-in-class project professionals from our Consultant Network. These are experts in their field who have made the career choice to be independent consultants. They’ve chosen to be consultants because they enjoy doing the work. Our consultants are world-class experts, who come in with the experience and best practices required to deliver results for our clients.