Management Consulting International, June 2004

Website: www.management_consultant_international.consultingcentral.com

“How Performance Incentives Drive Success - Inside Candesic’s Model”

(Summary of the article)

Candesic was established in late 2002 by Leonid Shapiro, a former McKinsey consultant. Candesic has no partners, perks or set salaries for associates. Associates are paid for the value they contribute to an engagement according to a set mathematical formula.

With a help of a five-person committee, consultants choose which associates are needed for an engagement. “If people don’t perform, they don’t get paid,” says Shapiro.

For clients, because Candesic does not provide expensive office space for its consultants or associates, and because their compensations are based on the portion of the engagement they have supported, the firm can offer radically reduced rates, as much as one third that of other strategy firms. “The real saving on cost is our salaries,” says Shapiro. Candesic also saves costs by not hiring and firing, avoiding the legal fees that go along with personnel contracts. The firm’s 190 associates are essentially independent contractors. One sixth of the associates are academics, not consulting professionals.

“People come to Candesic because it’s very entrepreneurial,” Shapiro says. “Other people work with us because they can be their own boss. If they want to take two weeks off and hike in the Himalayas, they can.”

Owing to our respect for copyright, we are displaying a summary of the article only... if you want to read the original article, please go to the MCI website and subscribe.