A change of president after the post-IPO profit drop, and the shift to a hire-more, charge-more model (2016)

The service life of a design that adds people while raising prices

The core of this decision is that, in a consulting business, it made headcount growth and rate increases hold together at the same time. In a trade that sells people, chasing scale means taking on cheap work, and defending rates means scale stops; picking one or the other is the norm. Against that convention, narrowing to upstream engagements while securing talent through pay created a loop that lifted both. That a regime which began with the ungainly result of higher sales and lower profit right after listing went on to multiply revenue 8.6-fold in nine years shows the design worked — at least for as long as demand was growing.

But the loop was built on two premises: the tailwind of DX investment, and the man-month going unquestioned as a unit. The second half of that is now shaking. If generative AI takes over the design and analysis steps, the very structure of being paid in proportion to the number of people deployed comes up for review. That the shares fell 30% in a year of record profit suggests the market is looking at the premise rather than the earnings. Whether a design that adds people while raising prices holds for another decade is not yet answered.