All the Right Moves

By eweek  |  Posted 2001-02-12

To understand how Diamond has been able to outdistance much of its competition and emerge as a first-rung strategic consultancy, you need to look at some of the companys early moves and how they have paid off.

Founded in 1994, Diamond Technology Partners, as it was known then, moved into the emerging e-services field before the likes of Sapient, Scient and Viant. Diamonds initial approach differed significantly from many of those newer companies. For one thing, Diamond targeted major companies rather than dot-coms as clients, presenting itself as an elite strategy firm rather than a razzle-dazzle Web integrator.

"Its a totally different type of company than firms such as Scient," notes Caren Price, an analyst with WR Hambrecht. "It deals with strategy on the high end."

Diamonds emphasis also was on developing "killer apps" and new, digitally driven business models, not Web sites. "Essentially, were about innovation in large companies," says CEO Mel Bergstein.

To buttress that high-end strategy, Diamond created so-called innovation programs, which include a slick business magazine called Context, aimed at senior management, and an exclusive learning forum for CEOs. The company also established the Diamond Fellows, a group of high-powered business and technology gurus such as Esther Dyson and author Geoffrey Moore. Their charter: provide intellectual capital and innovative solutions for DiamondCluster and its clients.

Meanwhile, Diamond is the only company among both the New Economy outfits and the traditional consultancies that is set up as both a partnership and a public company. Employees get stock options, but also can be elected partners after a half-dozen or so years of service.

"Im much less important to our company than any other leader in this industry," quips Bergstein. "The partners have the right to take out the CEO any time."

Hambrechts Price says the approach has produced "an extremely tight, comprehensive culture."

Indeed, the public-partnership model has enabled Diamond to fend off a series of recruitment forays by its competitors. "We survived the dot-com raids and later raids by Deloitte and McKinsey, and whats more interesting, we did this in the context of executing this merger with Cluster, a time when, typically, youre vulnerable," says Adam Gutstein, Diamonds president of North America. Annual attrition has been at or below 15 percent, he says.

Diamonds unique model also may explain why the company boasts revenue of nearly $400,000 per employee.

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