Boston Consulting Group opens office in Auckland, says New Zealand's brand has never been stronger

Monday, 8 August 2022

BCG's Asia Pacific managing partner Neeraj Aggarwal returned to Tāmaki Makaurau to reopen its office after more than a decade.

One of the world’s most prestigious management consulting firms officially opened its office doors in Auckland last week, and may be more upbeat about New Zealand’s future than most New Zealanders are.

A survey conducted by Boston Consulting Group (BCG) in the first half of 2022 found New Zealanders were more concerned about inflation than people in any country surveyed, except Brazil.

Not just that, but New Zealanders were more fearful of attending a live concert, travelling internationally, taking a cruise or going to a bar than people in the United States, UK, France, Sweden, Brazil or China.

That negativity didn’t get in the way of BCG’s top brass in Australia converging on Auckland for the official opening of the new office in Wynyard Quarter last week though.

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BCG’s Asia Pacific chairperson Neeraj Aggarwal was in New Zealand last week to open the firm's Auckland office.

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BCG’s offices were supposed to open last year - the company even issued a press release about it - but Covid-19 and other issues ended up getting in the way.

BCG is known as one of the world’s ‘big three’ strategy consulting firms, with reported revenues of US$11 billion in 2021.

BCG is known as one of the “big three” strategy consulting firms – the most famous of these is McKinsey – which work with the world’s largest companies on their long-term plans and strategic direction. The consultancy reported global sales of US$11 billion (NZ$17.6b) last year.

You might wonder why it is here, since New Zealand is a small economy and the big four accounting firms all run large business consultancy divisions.

The head of BCG’s Auckland office, Phillip Benedetti, said its client offering had expanded in recent years, which was part of the reason why the firm thought it would have enough business to sustain a permanent office here for many years to come.

“Ten years ago we just did strategy, it was ‘we’ll talk to you once every five years and help you think about what is happening’, and now we’re 25,000 people with capabilities ranging from strategists like me, to user experience designers, to technology architects.”

The group’s offices in Auckland have all the trappings of what you might expect from a global strategy consulting firm in 2022: copies of globetrotting culture magazine Monocle on the coffee table and cubicles filled with well-dressed clean-cut consultants working on PowerPoint slides and liking LinkedIn posts.

BCG’s Asia Pacific chairperson Neeraj Aggarwal said four years ago the company was looking for the most exciting places to be in the Asia-Pacific and came up with three places: Shenzhen, Osaka and New Zealand.

BCG had a lot of debate internally about whether it should set up an office in Auckland or Wellington.

As far as he is concerned, New Zealand’s future is bright.

But New Zealand has heard that all of that before, more than a decade ago, when BCG set up an office then packed it all up again at the end of 2009 because Auckland-based staff were flying to Australia so often to service clients.

Benedetti said New Zealand’s economy was different now, and so was the firm itself.

The head of BCG’s Auckland office, Phillip Benedetti, says New Zealand is seen as a ‘light on the hill’.

“I don’t think a lot of people in New Zealand recognise how strong the [New Zealand] brand is and how much of an opportunity there is internationally,

“From the perspective of sustainability, from the perspective of caring for the environment and a multicultural society that actually functions … people look to New Zealand as a light on the hill.”

Benedetti said there had been two big economic changes since the firm was last here: the large Australian-owned banks have had control repatriated to New Zealand, while corporates here are also more focused on exporting than they have been in the past.

With the decision to set up in New Zealand settled, the next big debate internally was about whether Auckland or Wellington would be the right beach-head for the company.

In the end it came down to a strategic decision about whether BCG would be doing more work for the private sector or the Government.

But also which city, of Auckland or Wellington, was the one most likely to produce the country’s next technology “unicorn”.

“We're in the Wynyard Quarter and that was a very deliberate decision. The number of sites I looked at are too many to keep count of, and we settled on Wynyard because it is the innovation precinct of Auckland.

“This is where growth, new ideas, the next unicorn is going to come from, and we fundamentally believe we're a core part of that.

“We want to help companies become unicorns, we want to help people think differently, we want to help them compete on the world stage, so if you're going to do that, you might as well be in the innovation capital of Auckland.'

Aggarwal says executives in the Asia Pacific have been a little surprised by the strength of the economic rebound in areas like air travel.

As for Government work, Benedetti isn't ruling it out, but says the ability for the public sector to hire consultants like BCG is always constrained, and the scrutiny Governments face over hiring them often makes such contracts difficult too.

Both Benedetti and Aggarwal have backgrounds you wouldn’t normally associate with the stereotypical economics and business-bent of management consultants.

Benedetti, an American by birth, started out as an academic scientist working in chemistry doing organic synthesis for drug discovery and development.

Aggarwal studied computer science during the 1990s in India, worked in Silicon Valley and even wrote a few million lines of code for the Intel Pentium chip.

For Aggarwal, the trip to New Zealand to open BCG’s office here is part of a round of frenetic globetrotting that has been gathering pace since March. In recent months he has been to Toyko, Jakarta, Manilla and various parts of India. Next month he’ll be in Seoul followed by Fukuoka, Nagoya and Osaka.

Aggarwal says the economic rebound that has made all this air travel possible has been a topic of discussion in the boardrooms of the Asia Pacific, but so too has climate change.

Climate change is a big focus for BCG globally. It was named as the consultancy firm partner of COP26 and was likely to be named the same for the COP27 conference in November.

Carbon emissions are another reason BCG is re-opening an office here with BCG committed to reaching net-zero emissions by 2030.

The company has New Zealand clients who have been with the company for decades – some are in the agriculture, banking and insurance industries – but BCG has been servicing them by flying consultants here.

Both Aggarwal and Benedetti acknowledge that to support a permanent base here they will need to expand their customer base beyond these clients, but how will they do that with so much fear out there?

Aggarwal’s pitch is that in turbulent times companies need strategy consultants because volatile conditions make it easier for individual companies to overtake competitors. He cites Formula One driver Ayrton Senna’s classic quote about how it’s easier to overtake cars in the rain, when drivers are cautious or can’t control their cars, than it is to do the same in good conditions.

And now that BCG has finally opened their office here Benedetti insists it is not going to pack up and leave like they did a decade ago, even with dark economic clouds on the horizon.

“BCG is back, we're here to stay in New Zealand, and we want to build long term relationships.

“I'm not here to sell you something really quick and then rush back to Australia. I'm here because I fundamentally believe in the potential of New Zealand.”