Kepner-Tregoe’s core business is bringing critical thinking capability to organizations through either training or consulting. For this process, their consulting projects involve applying their own expertise to resolve difficult client issues and to deliver specific agreed upon results.

“We are much more than just a training company—we are a capability development company,” says Baldwin. “Our extensive experience tells us that training is one part of this development. But first we must seek to understand what problem clients are trying to solve and provide a complete solution for that problem. Our competitive advantage comes from the fact that critical thinking matters and can deliver significantly improved results to organizations that employ it well. We strongly believe that no other organization does critical thinking capability development better than Kepner-Tregoe.”

As CFO of Kepner-Tregoe, Baldwin manages the company’s finance, legal, IT and certain aspects of the HR functions. He is also a member of the company’s Board of Directors and Global Leadership Team. “My responsibilities include financial planning and reporting, banking, financing, tax strategy and much more,” says Baldwin. “Over the summer, I had the opportunity to manage our operation in Japan on an interim basis which was a great experience from a business and cultural point of view.”

Over the past few years, Kepner-Tregoe has made many major investments. These include geographic expansion into China, Western Australia and Western Canada, as well as investments in consulting resources—primarily in hiring and capability development, product development, and IT systems and infrastructure implementation. “When choosing where to invest, each of our decisions involve elements that must be considered, evaluated and incorporated into our strategic and financial planning. At the same time, we also have to balance these investments with the overall financial and operations management of the company.”

In addition to these investments, Baldwin has also helped Kepner-Tregoe provide deeper opportunities for KT employees. This includes the implementation of a new ownership model through the introduction of a restricted stock plan. According to Baldwin, this “has expanded the number of employee shareholders from 15 to 50 over a three-year period and refinanced the company’s bank facilities, which ensures capital availability, when needed, at an effective cost. I have also continued to develop and modify our employee incentive plans to balance employee performance and company growth.”

Across the board, KT employees are extremely passionate about the impact their proven processes have had on supporting organizations over nearly six decades, particularly KT’s flagship problem solving and decision making methodology. “We are immensely proud of our processes and the benefits that it brings to our clients,” says Baldwin. “Believe it or not, it was actually KT’s methodology on problem solving that allowed NASA to save the astronauts from Apollo 13. It is a story that everyone in our company loves to tell because it illustrates the type of impact KT processes can have when executed well.”

In order to ensure that their high standards of service are maintained, KT implemented a set of Basic Beliefs that guide the organization. It is this set of Basic Beliefs that provide the framework for KT’s employee recognition, awarding those who go above and beyond. “Unlike many other professional service firms, KT has an extraordinary retention rate,” explains Baldwin. “I believe this is a testament to the passion our employees have for our products, the value we deliver to clients and the culture we have built over the years.”

Throughout the years, there have been many significant changes in the company’s operations, some of which have been internally driven through changes in strategy, structure and leadership. Other changes have been externally driven, particularly the financial crisis in 2008 and 2009.

“The Global Financial crisis dramatically affected our business,” says Baldwin. “So much so that our revenues declined by 32 percent between Q4 2008 and Q1 2009. However, we reacted very quickly through a number of cost containment actions. They say ‘never let a crisis go to waste’ and we fully embraced this crisis to create many positives that remain in place today. This includes our variable compensation and workforce models, quarterly incentive plans and more effective utilization of our consulting resources. Today, we remain very diligent as to how we manage our cost structure and measure what investments we choose to make in the business.”

According to Baldwin, the crisis also reinforced the importance of maintaining a strong balance sheet and building cash reserves to ensure the financial stability of the business. “It’s not a question of if another financial crisis will occur but when,” Baldwin explains. “So it’s important to ensure that your organization is prepared, and we set cash reserve goals and continue to work towards achieving those goals as well as minimizing debt for operating cash flow purposes. In fact, we have been debt free for operating cash flow purposes for the last five consecutive years.”

Working within in a highly competitive consulting and training landscape, Kepner-Tregoe understands it must stay nimble to continuously improve its approach as well. That is why Baldwin views change as something that is positive and will only serve to improve their overall services. “While people and organizations are generally resistant to change, or slow to adopt to change, I have learned that change is a necessity and can be very positive if the changes are clearly communicated, well implemented and supported by leadership across the company. Organizations and their people, particularly in today’s business and economic climates, must be quick to understand the need for change, identify what changes are required and to implement those changes in a rational manner enabling individuals and organizations
to grow and thrive.”

It is this level of responsiveness that has enabled Kepner-Tregoe to weather a dynamically changing world over nearly 60 years in business. Baldwin believes the consulting arm of the business has been particularly adept at helping the company identify, and solve, critical issues. “Our consultants are in the trenches helping clients resolve business issues that are affecting them today or will affect them in the near future. Communication between our global resources, as well as with our marketing and products group in Princeton, help keep us at the forefront these emerging business issues. “

Extending this effort, KT’s North America operations team is also forming a Customer Advisory Group. This group will consist of various clients they will work with to develop new products and services that meet today’s business needs. Alongside these measures, they also attend and present at various industry conferences throughout the world, sharing best practices and client successes. With the world becoming more globalized, Baldwin believes that social media has also become instrumental in achieving success. “Through social media platforms such as LinkedIn, we are in constant communication with user groups, industry groups and many others discussing and exchanging ideas regarding current business issues impacting a variety of industries. Hosting WebEx events also provides opportunities to discuss current business issues.” A key testament to KT’s financial success is that their North America business unit has increased its revenue by 36 percent over last year.

According to Baldwin, this growth is the result of a number of factors. Among these include greater involvement by senior leadership in business development, increased sales results from recently hired client relationship managers, greater account penetration with current clients, more effective lead generation activities and growth in certain industry
segments, particularly in operational and service excellence. “Alongside these measures, our operating profit has significantly improved as a result of several changes implemented over the past few years,” says Baldwin. “These include having a more variable compensation structure and work force, improved utilization of our consultants within their regions as well as across the company through a ‘global resource pool’ and a quarterly incentive system that rewards operating profit performance of our regions and the total company. Finally, the realization of the investments we have made in new hires and capability development of our consulting resources has added value to the projects and results we deliver our clients.”

Looking to the future, Baldwin remains optimistic that Kepner-Tregoe will continue to grow and is fully prepared to embrace any changes that come along the way. “Each year we challenge ourselves as we develop our strategic, operational and financial plans for the next three-year period. We look beyond growth in revenue, profitability and shareholder value each year to other goals and objectives. We want to continue to deliver sustainable, measurable results to our clients through our processes and help our clients build capability in our processes.

“In order to achieve this, we need to evaluate our resources, our markets and our products. We also need to ask ourselves who are we looking to hire, what capability development we provide, what product and service innovation we invest in, what markets are growing and what are emerging client needs. In evaluating these questions, it challenges us to ensure we continue to deliver results to our clients, continue to grow revenue, profitability and shareholder value and build an organization with highly capable, valued and engaged employees.”

Company: Kepner-Tregoe, Inc.
Name: William B. Baldwin
Email: [email protected]
Web Address: www.kepner-tregoe.com
Address: 116 Village Blvd., Suite 300, Princeton, NJ 08540
Telephone: 609-252-2558