PA Consulting Group
PA Consulting Group is a management consultancy that specialises in strategy, technology and innovation. Founded to support the UK’s war efforts in 1943 by Ernest E. Butten, Tom H. Kirkham and Dr David Seymour, who had codified a human-centred approach to boosting productivity, PA grew to become the world’s largest management consultancy by headcount in 1970. PA’s human approach to innovation is still in evidence today, with the company again supporting the UK Government through a time of crisis by helping scale production of ventilators during the 2020 COVID-19 pandemic.
Today, PA employs more than 3,200 people globally, with a focus on experienced industry professionals who can help it deliver its stated purpose of ‘Bringing Ingenuity to Life’. It is also growing rapidly, acquiring five specialists consultancies and innovation firms since between December 2017 and June 2019 - Nyras, a UK-based international aviation consultancy; Sparkler, a leading London-based digital insight and strategy consultancy; Boston, Massachusetts-based Essential Design, an innovation strategy and product design business; London-based We Are Friday, a digital service design and engineering agency; and 4iNNo, an innovation company based in Cincinnati, Ohio.
PA has clients in both the private and public sector, ranging from start-ups to national governments. Specifically, PA specialises in eight industries: consumer and retail; defence and security; energy and utilities; financial services; public services; healthcare and life sciences; manufacturing; and transport. It operates in these industries from offices across the UK, US and the Nordics. It has also become a key member of the Ellen MacArthur Foundation's CE100, a collection of global organisations driving towards a Circular Economy, the United Nations Global Compact, a non-binding UN pact that encourages businesses to adopt sustainable practices, and the WePROTECT Global Alliance, a network of governments and companies aiming to tackle online child exploitation and abuse. PA has also produced the first two Global Threat Assessments for WePROTECT.
The company is privately held, with 52.3% of shares owned by The Carlyle Group and the remaining 47.7% owned by current and former employees. Staff can buy shares during an annual share-trading period.
History
1940-1950
PA was founded in 1943 as Personnel Administration by Ernest E. Butten, Tom H. Kirkham and Dr David Seymour. Britain's war effort created great demand for munitions and goods, which had to be produced by a relatively unskilled workforce. Butten and his colleagues formed Personnel Administration Limited to provide advice to industry as to how to improve the productivity of their workers.Like the other three firms that dominated consulting in the 1940s, '50s and '60s, PA was an offshoot of the pre-war Bedaux Company. Bedaux in turn had been developed based on 'scientific management' theories of Frederick Winslow Taylor and Frank Gilbreth. Butten sought to take the mechanistic and task-orientated concepts of scientific management and add a human dimension to them. The chief idea, along the lines of Douglas McGregor's 'Theory Y', was that by involving the worker in the process of change and a suitable form of ownership, greater gains could be made both by the worker and the organisation.
PA's first assignment was to train housewives to assemble the tail gun section for the Avro Lancaster bombers, as part of Britain's policy of bringing women into the factories in order to free up male workers for the armed forces. By 1964, the company had dropped the name Personnel Administration and was known as simply PA Consulting Group.
1950-1970
PA expanded over the next 20 years, and by 1970 it was the world’s largest management consulting firms by headcount. PA had also expanded geographically, mostly along the lines of the Commonwealth, with its operation in Australia providing about a third of the firm's revenue.In the 1960s, PA diversified its business significantly by developing the use of the 'newspaper box' advertisement for recruitment.
Butten retired from PA in 1970, having earlier sold his 100% shareholding in PA to the Butten Trust in 1958. The Trust was intended as a long-term guardian of PA's fortunes and an assurance that the company would be 'owned by the employees'.
1970-1992
PA's strength during this period was in the firm's work advising companies on potential applications of technology to business issues. Arising out of this success, major technology centres were built in Melbourn, UK, and Princeton, USA.Towards the end of the '80s, after an upsurge in the industry, PA's management decided it wanted to take the firm public. The Butten Trust, after an application to the courts in the UK, agreed to give 15% of its shares to its employees as part of a long-term plan to float. However, the company suffered in the subsequent consulting industry downturn of 1989 to 1992 and changed its strategy to one of staff ownership.
1992-2015
Between 1991 and 1994, PA reduced its workforce by almost half. In 1992, Jon Moynihan was appointed as chief executive of PA, with a remit to turn the company around. With a new strategy, aggressive cost-cutting and an industry upturn, the turnaround succeeded and, in 1995, PA made record profits.Jeremy Asher became group CEO in 1998 and, during his three-year tenure, PA grew from about 2,500 staff to just under 4,000. The firm expanded significantly in the United States through the acquisition of Hagler Bailly Inc. in 2000 for around $96 million in cash.
PA revenues suffered during the consulting recession of 2001-2004, but saw a significant recovery between 2004-2006. This helped it to increase its focus on ventures, with 50% of PA's return to its main shareholder between 2002 and 2006 came from non-consulting activities. This included the sale of a number of subsidiaries including UbiNetics, Volume Product Technology and Meridica. By 2005, the company was ranked 8th in the Sunday Times
Government figures released in 2010 showed that PA was the second largest beneficiary of UK Government contracts to consulting firms, receiving £11million over the first year of the coalition. It has gained publicity for its work on analysing what it has called the zombie economy. Other work includes its annual survey of opinion in higher education, and ongoing technological innovations, including a new type of round kitchen towel.
On 31 December 2013, Jon Moynihan retired as executive chairman, and was replaced by Marcus Agius, the former chairman of Barclays Bank. In March 2014 the company launched a new logo, a new visual identity and redesigned website. Also in March 2014, Health Select Committee member Sarah Wollaston MP questioned PA Consulting's uploading of a pseudonymised extract of Hospital Episode Statistics to Google BigQuery. The Health and Social Care Information Centre confirmed that PA had used the data in accordance with the information sharing agreement in place.
2015-present: Private equity investment and expansion
In 2015, The Carlyle Group bought a majority stake in the company, giving it a value of USD 1 billion..Since the Carlyle investment, PA has grown significantly.In October 2017, PA started acting on its plans for rapid expansion by relocating its global corporate headquarters. The firm moved from its 25-year home of 123 Buckingham Palace Road, London, to newly built offices at 10 Bressenden Place, taking over two floors of the office block in the heart of Westminster.
Then, in December 2017, the firm acquired Nyras, a UK-based international aviation consultancy. At the time, Nyras was the only consultancy in the air transport industry authorised by the Financial Conduct Authority to undertake commercial and transactional advisory services in the aviation sector.
In April 2018, PA's Chairman, Marcus Agius, announced he would step down and assume the role of Deputy Chairman, with John Alexander replacing him. Alexander made the move from environmental and sustainability consultancy ERM, where he took the company through two rounds of private equity funding and grew the enterprise value from US$525 million to US$1.75 billion. The next month, PA bought London-based Sparkler, a leading digital insight and strategy consultancy that works with the like of Microsoft, Diageo and Uber.
By October 2018, the consultancy expanded its acquisitions into the United States, acquiring innovation strategy and product design business Essential Design. Based in Boston, Massachusetts, the company has helped Woodford Reserve bourbon to strengthen its brand and designed the Hydrow connected home rowing machine.
In December 2018, PA bought another London-based company, the digital service design and engineering agency We Are Friday. They brought with them high-profile digital clients like HSBC, Nuffield Health and the British Red Cross. In the same month, PA also announced it was appointing a new head of its Americas business, Ken Toombs, to drive rapid expansion in the United States. He brought 30-years experience in management consulting and moved to PA from his role as the Global Head of Infosys Consulting.
Then, in June 2019, PA looked again to the US and acquired 4iNNo, an innovation company based in Cincinnati, Ohio.
Following this period of rapid expansion that set PA on course to reach annual revenues of £1 billion, CEO Alan Middleton announced he would be stepping down and Panos Kakoullis would lead the firm from the middle of 2020.
Technology and innovation
The company has a strong focus on technology dating back to its work with the earliest computers in the 1950s. Its Cambridge Technology Centre, designed by Richard Rogers and founded by Professor Gordon Edge in 1970, played a critical part in creating the Cambridge Phenomenon where the city became a leading centre for the UK’s technological companies.Innovations developed at the centre over the past 50 years include: the original brushless servo motor; medical injectors that mean the patient does not need to see the needle; a self-monitoring device for people with diabetes that measures blood glucose levels; micrometers; and 4G wireless test equipment. During the Iraq War, PA Consulting developed the "Panama System" to protect UK troops from improvised explosive devices, winning the Management Consultancies Association's top prize for innovation.
More recently, the Centre has made several significant advances to help deliver a more sustainable future. It developed the manufacturing equipment needed to mass produce edible water bottles for Notpla ; the strategy for Milliken & Company to improve the future of plastics sustainability ; and a device that uses natural processes to destroy the COVID-19 virus in enclosed spaces.
PA ventures
PA's venture programme was established in 2000 to exploit the ideas and intellectual capital generated from its consulting work.Ventures include a third-generation mobile phone business called UbiNetics that was sold for a total of $133 million in 2005; and Meridica - a drug delivery system company – that was sold to Pfizer for $125 million in 2004. PA demerged its venture arm, Ipex Capital, in June 2008 although it continues to work closely with the company.
Other recent ventures include:
Exacsys, which develops solutions to improve Point of Care diagnostic systems. One application of this technology is the self-monitoring of blood glucose to help people manage their diabetes.
ProcServe, which provides a cloud-based procurement system. The ProcServe Trading Network covers more than 17,000 organisations and is used by central government, and the National Police Procurement Hub, as well as commercial sector customers including Orange and Xerox.
Argenti, a business that innovates telecare technology in partnership with local councils in the UK to improve adult social care.
Awards and recognition
PA Consulting was one of four consultancy groups recognised in LinkedIn's top 25 UK companies to work for in 2017.In 2018, PA Consulting was ranked second among the consulting firms with the most differentiated offering in the market.