Growing Pains at Stroz Friedberg

Abstract

In late spring 2009, Stroz Friedberg co-presidents Edward Stroz and Eric Friedberg had to set growth targets for 2010. The leading global consulting firm they had built specialized in managing digital risk and uncovering digital evidence and had grown very rapidly. With the firm's CFO, they believed that the firm could grow from $58 million to $72 million, a growth rate of 27% over the preceding year. However, the firm's 11 offices had submitted first draft FY 2010 plans that together added up to firm-wide revenues of only $53 million, a growth rate of negative 10.2%. The preceding years of rapid growth had been successful but challenging, and a thorough review of the firm's culture, systems, structure, and processes in late 2008 had resulted in a significant set of changes to which the organization was still adjusting. Stroz and Friedberg wondered whether to push for continued, aggressive growth.

Learning Objective: The purpose of this case is to acquaint students with the leadership and organizational challenges faced by firms as they grow and transition from informal to formal management. Such firms are in the "adolescent stage" - they are experiencing "growing pains" and must shift from an entrepreneurial to a more professional approach. Stroz Friedberg has successfully managed this transition, and the case examines the range of problems that the firm experienced as it expanded and grew; the changes in structures, systems, and process that it introduced in response; and the resulting changes in employee behavior and organizational performance.