The way businesses function has changed much over the last couple of years, no thanks to the pandemic. Nevertheless, Bain’s mission has stayed true: To dish out the best advice it can to its clients, no matter how that is delivered. “If anything, the need by clients for good consulting partnership to help to achieve their mission has gotten higher,” says Emmanuel “Manny” Maceda, CEO of Bain & Company.
A congruence of factors — from the uncertainty of the overall business environment, the rapid changes in digitalisation and the task of dealing with the pandemic — has created such unexpectedly strong demand for the services of Bain. The firm is riding on its highest growth period in more than two years. Its consultants are all booked up that the firm has declined work for the last couple of years. In short, Bain could not take on new assignments unless it hired more. “We have a supply-led problem,” says Maceda in an interview with The Edge Singapore.
Apart from a roaring business, Maceda has other reasons to feel good about — not just the firm he leads but his career. He is the first Asian to head Bain, ranked together with McKinsey and Boston Consulting Group as the “MBB” of the hallowed world of management consulting. He is the eldest son of the late Ernesto Maceda of the Philippines, a former senate president. He chose to join Bain in 1988 over a competing offer from General Electric, one of the most powerful US conglomerates whose CEO then was the legendary Jack Welch.
Relationships
In March 2020, when the pandemic spread globally, all travel halted. After the initial adjustment, Bain’s consultants realised they had become more efficient. They could still work with their colleagues virtually and engage their clients “instead of waiting for Manny or somebody to fly 16 hours from San Francisco to Singapore. We didn’t know that it would be that an easy adjustment,” says Maceda.
However, that is not saying the whole business has turned virtual forever. In fact, given how homo sapiens is still a social species, the fundamental activities of building relationships, inking business ties and so on are being carried out face to face as they used to be with the relaxation of travels. “Businesses like mine that are based on mentorship, apprenticeship, feedback, training — well, some of that could happen, virtually, but it was just hard to do.”
He believes that certain aspects of the industry will go back to the old ways — even for recruits. “A bright young graduate didn’t sign up for a job that says ‘I’m going to do this entirely from my bedroom. Whether you call it glamour, they want to experience personal growth. My firm, with this culture, doesn’t necessarily attract people who want glamour. Still, it’s a firm that wants to attract people who want to make a difference, learn, and build relationships globally,” says Maceda.
See also: Jeff Perlman, head of Warburg Pincus SE Asia and APAC real estate promoted to President
Indeed, relationship building is an integral part of what Maceda is doing. During one of his visits to Singapore, Maceda found his schedule packed with meals with critical clients. True to the sanctity of client confidentiality of his trade, he will not name who they are, except that they are managers of the leading corporations. His interactions with them, made possible by the recent break-in restrictions, have reaffirmed the importance of relationship building within the business world, pandemic or not. “I don’t know what you will eliminate, but it is clear to me, you can’t eliminate personal interaction,” says Maceda.
But there is a balancing act of sorts. Maceda believes that the frequency of such in-depth interactions might become lower. One key reason is to be part of the broader decarbonisation trend most responsible corporations adopt. An individual’s share of carbon generated from a round-trip business class flight can go up to seven tonnes. Travelling is still taking place, but the duration of each trip has to be increased — stay longer days, but not fly more frequently. “Those are the changes I could see happening,” says Maceda.
Business reality
Besides consulting for companies, a significant segment of Bain’s clients are investors. Companies are going through the uncertainty of the business environment and want to reset their business strategies. Similarly, investors need some counsel on how to deal with the world today and bet on the world tomorrow. “We are now in a post-globalisation world; we are growing our digital transformation even faster; we fully embrace ESG (environmental, social and governance) — all these and all the changes that are being created,” says Maceda, and, following a momentary pause, note that all these considerations were before Russia invaded Ukraine.
See also: Innovation through business the key to growth for society — if by-products are mitigated
The ongoing fighting between Russia and Ukraine has triggered implications on multiple fronts beyond the obvious impacts on energy and food. For leaders of multinational corporations with employees in the affected countries, that is something they have to take care of as well — something Maceda can empathise with either personally or when he talks to his clients. “While I think of Russia and Ukraine, in macroeconomic terms, that’s a very intellectual way to look at it. But, my first thought is our teammates on the ground in Kyiv and Moscow,” he adds.
There is a Bain consultant, a Ukrainian working in Sweden. When the fighting broke out, he went back to defend his homeland. “That’s the reality of business as an idea, versus business as the reality of people, which you and I know is what we can’t lose as business leaders or as members of the firm, or our basic humanity,” says Maceda.
But apart from dealing with the usual external business pressures such as geopolitics, companies and CEOs, Maceda observes, are facing challenges of another kind. As it stands, they are answerable to their boards. Increasingly, they find themselves compelled by their rank and file employees as well as members of the public to make a stand on issues not necessarily directly linked to the business of the company. It is not just about criticising Russia, for example, over Ukraine, but on local political and social issues.
For example, the US state of Georgia passed a law to restrict voting access last year. Major companies with a presence in the state, namely Delta Airlines and Coca-Cola, were compelled to state their opposition after they had earlier kept silent. In a somewhat similar issue, Disney was criticised by certain quarters for publicly opposing Florida’s new parental rights bill. “That’s become part of the job,” says Maceda.
Why is this something Bain — a business consultancy — should bother itself with? It relates to the ability to recruit talent and retain those sharing the same values with the companies they work for, Maceda replies. CEOs must pay attention to this aspect because they must deliver “value” to a broader range of stakeholders, not merely their shareholders. In other words, the traditional definition of stakeholder capitalism no longer applies. Companies’ mission statements have gone from delivering simply “economic value” to “value” as defined in the broader sense.
An issue that interests employees might be the same one that interests the community this company is in. And the community includes employees and customers, not just investors, which, by extension, has a bearing on a company’s share price. Even for privately-held companies, there is an implied valuation. For the younger generation of colleagues, a company’s leadership, by staying silent on an issue, is deemed as being complicit. They also want to be heard and hear from their leaders. They want to be proud to be associated with the companies they belong to find a more vital purpose and ultimately deliver more value for the company and its stakeholders.
Pretty good place
Given Maceda’s heritage and background, does it suggest he will steer the firm towards paying more attention to growing its business in the regional economies of Southeast Asia? After all, this region is a haven for investors feeling the volatility in other markets. Maceda’s answer is: “Yes, absolutely”. His innate familiarity with this region and the region’s further growth potential to be tapped. For Bain, it is in an industry enjoying underlying demand growth for top notch strategic advice. “Southeast Asia has so much going on with great underlying demographics,” he says.
Maceda acknowledges that individual Asean markets are unique in their way. Still, the region has plenty of commonalities and key advantages — like having Singapore at the centre — with a regulatory and political regime that the global business community can trust. In contrast, the pandemic has made it relatively tougher to invest more in China. Asean economies have been seen as a credible alternative, be it a manufacturing and supply base or consumers in their own right. When Maceda joined the firm, there were five offices in total. There are now more than 60. Bain’s more recent offices are in this region, including Manila. “This is a pretty good place to be in,” he adds.
