Liz Levin & Company — Management Consulting

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Liz’s Leadership Salon Series—Women Who Fly

remarks by deborah meehan, sh&e

February 1, 2007

leading a global company where many people fly

Hello, my name is Deborah Meehan and I am the President and Chief Operating Officer of SH&E. We focus on aviation and fly for a living. Our industry is by its nature exciting — with constant articles written about it in the business section of the Globe or the Times, or on the cover of the Wall Street Journal. Our practice is global and so our travel is often extensive. Our travel is not shared equally across the firm — many of us travel all of the time and some don’t travel at all. We expect a lot from our employees and, depending on the stage of life, we get a lot in return. The perfect consultant is either very young or just beyond the child bearing years. When consultants, men or women, have children under the age of 18, their lives become strained with conflicting objectives and they hesitate to travel for extended periods of time. We try to accommodate this need, but often we just cannot. We do not lose people often, but when we do it is because our life is demanding. Consulting is a tough way to earn a living and it makes you old before your time. If you are not willing to travel to every hell-hole on earth, miss the Super Bowl, or work when clients are vacationing so that when they get back they can dig into your results, then you do not belong in consulting.

Tonight, I would like to talk about our company, our people — how we help them meet our expectations plus maintain some balance in their lives, and how I got to be President. I can hardly wait to tell you how I became President, but let’s suffer together through the rest before I disclose my struggle to the top — or the near top.

My Company

First, we are an aviation consulting firm established in 1963. We focus our work in three areas: Airlines; Airports; and Aircraft Manufacturers. As a firm where all of our senior people are industry experts, SH&E is uniquely positioned in the areas we are strong. Where we are not well known in an area, we struggle to break in without buying a firm with that explicit expertise. We are retained when the client needs counsel from a firm that has specific and deep understanding of some component of the aviation industry. Interestingly, our work ranges from traffic forecasting at an airport to conducting a safety audit at an airline to selling aircraft for a leasing company. It is a surprising book of business that reflects that of a niche firm.

Our marketing philosophy is largely based on maintaining a strong reputation for quality work. More than two-thirds of our business is repeat business from existing clientele. We do very little direct marketing or cold calling, relying instead on responding to requests from existing clients, referrals or responding to competitive proposals. Because we are an expert firm, almost one third of our professional staff holds the rank of VP or above so we are not the typical pyramid that you find at the major consulting firms.

Our ownership structure is complicated — 15% held in an ESOP, 36% owned by the VPs and management, and 49% owned by Lufthansa Consulting Company, a subsidiary of Lufthansa Airlines. This is the fourth ownership pattern for the company — we were originally owned by the founding partners, they sold to Reed Telepublishing, management and the VPs bought the company back and then, 5 years later, we sold 49% to Lufthansa. It remains to be seen whether we are in our final ownership structure.

The People

SH&E has 100 employees with offices that are located to accommodate our employees — Cambridge, Manhattan, DC, Chicago, Portland Oregon, LA, and London. An increasing number work directly from home. We are economists, financial analyst, and management consultants. We draw people from the industry and from academia.

Central to our mission statement is for SH&E to be a great place to work for our employees. As I said, this is not always easy because consulting is intense with real deadlines that often require people to work long hours. In addition, many of us have to travel extensively because our practice is global and our clients expect to see us and to some extent, expect us to work on-site. While we do not allow people to refuse travel we try never to ask anyone to travel whose circumstances prevent it. This is not always fair for those of us who do travel, but we try to compensate people who incur significant levels of travel.

Our employees are well paid, but most could make more money at the major consulting firms. They stay with us because of the culture we have built. Unlike the atmosphere at many of the major management consulting firms, there is room at SH&E for everyone as long as they are fundamentally smart with strong analytical skills and can add value for our clients. We do not have an “up or out” philosophy — we recognize that some people have strong analytical skill, while others have a strong presence and can sell. Unless the employee has both, they will not reach the senior management level, but they still are valued.

That doesn’t mean that everyone makes it. If an employee can not meet his or her performance criteria, we will work with them to try to place them with another firm.

Central to our work environment is that the culture is informal and supportive. To begin with, we are casually dressed — not even business casual is required. In addition, as long as an employee meets his or her performance criteria, they are given a great deal of freedom. We have flex time that allows an employee to arrive as late as 10:00. We have flex days that allow an employee to take off one day per month as long as they have worked 160 hours. We allow people to work at home if they have a family emergency or a sick child or spouse. We encourage attendance at industry conferences to allow our employees to gain knowledge and develop a network. We provide outside training for employees and pay for coursework in areas that are relevant to our work.

As a result, we have very little turnover. This allows us to take a student out of undergraduate or graduate school, invest 2 to 5 years of training, and eventually add to our expertise. We have clear performance standards that provide the foundation for raises and bonuses. Those standards are both quantitative and qualitative. An employee may not make his or her numbers, but as long as they add value, we will continue to raise and promote them. We have clear career paths with set times for each position with most topping out at the VP level.

What keeps me up at night are the people issues. As our senior people age we have trouble attracting and retaining the next generation of leadership — people in their thirties or early forties. It is at this age that people leave and they are the most difficult to replace. We are an intensely loyal bunch but it is at this age that our people are the least loyal. They often have not grown up with the company and they leave for several reasons.

First, as I have said, our life is tough, so they leave for a job in industry where the demands on their personal life are more predictable and they have considerably less travel. As a consultant, when your child has a play, the only thing you know for sure is that a client will have a need for you that day. You may think you’re going to the play until 5:00 on the day of the play, only to be faced with a difficult choice. Almost to the person, clients don’t care. They are paying you a lot of money and they expect you to be there when they want you. It gets tiring after a while to be constantly faced with disappointing someone.

Second, our senior management is still relatively young — with what could be 10 more years in the industry. The best and the brightest leave for senior-level positions in other firms with more opportunities to grow and lead.

Increasingly, I realize that the only way to keep them is to pay them not only for their current performance, but for their potential with the firm. As well, the 52-year-old senior management must cede more control

How I Became President

I have been with the company since 1982. I started at SH&E as a research associate when I was 27 and had just graduated from the Kennedy School of Government at Harvard. This is the only real job that I have ever had. I have had opportunities to leave, but I stay because of the culture at SH&E.

My work is in the airport area where we handle anything that pertains to airport economics including activity forecasts, financial feasibility of new capital improvements, economic impact, peak period pricing and air service marketing.

When I started at SH&E there were very few women professionals in the company and even fewer in the industry. Even now, only 25% of the professional staff at SH&E are women. That in large part reflects the industry where there are few women in senior positions. It remains a male dominated industry with exceptions such as Nuria, Lydia, Angela, Gina, and Mary Ellen. Most of the progress has been made in the public sector with still very little in the senior levels of airline management.

This also keeps me up at night. You would think that a woman would do a better job at attracting and retaining women who can move all the way up at SH&E, but I have not. Worse, you would think that a card carrying liberal would manage a company with more diversity, but I don’t.

So, how did I get to be President in a male-dominated company? From the beginning, I always bet on me. I never feared getting bad news, I only feared getting no news — so I always asked how I was doing and made sure that my pay was commensurate with my contribution. At a fairly young age I became a recognized industry expert — whether it was warranted or not. I became the President of the Airport Consultant Council despite the fact that I was the only woman in the group, and worse, I was pregnant with my first child. Once I became established in the outside world I started the airport practice at SH&E and developed it into one of SH&E’s largest business lines. Then, I just held a gun to each of SH&E’s CEOs’ heads until I became President.

Let me end by saying that I do not believe that you can have everything. Something has to give. With me, because I had children, I couldn’t be quite as aggressive or ambitious in my job as I might have been without children. My eye was always on the clock and my thoughts were always about getting home — I have taken hundreds of red-eyes in order to be home when my children woke up. Having said that, in my children’s eyes I was never home, and to some extent they are right. I never met their teachers, never went up to the school — I missed a lot. Not quite as important, but to my great dismay, I am also not in that perfect physical shape of the “stay at home moms” that I see at the gym. But, it is tough to “eat healthy” at the airport’s Burger King.

If you are not willing to travel to every hell-hole on earth, miss the Super Bowl, or work when clients are vacationing so that when they get back they can dig into your results, then you do not belong in consulting. So, how did I get to be President in a male-dominated company? From the beginning, I always bet on me. I do not believe that you can have everything. Something has to give.