The Other Balance Sheet

How one firm gets more profit from less work

By Robin Schatz

Margaret Johnsson isn't just trying to be a nice boss. It's true the CEO of Johnsson Group, a financial consulting firm in Chicago, discourages her consultants from working more than 45 hours a week in an industry where 70-hour weeks are typical. It's also hard to top the two-week, paid sabbaticals she offers all employees every three years--with a thousand bucks for expenses--in addition to generous vacations. And it seems awfully considerate of Johnsson to urge her 58 employees to build their work schedule around their lifestyles.

But, as I said, this isn't about altruism. "I'm in this to make money," she says. Quite simply, Johnsson thinks that consultants who lead balanced lives produce more creative solutions for her clients--and that's good for business. "We believe that every client has the right to breakthrough thinking on every job," she tells me. "One of the ways to get there is to have something that pulls you away on a regular basis, so your subconscious will have these breakthrough thoughts."


  O.K., I'm thinking, this is all a bit too New Agey for a no-nonsense exec in a navy blue pantsuit. But her philosophy comes right out of her experience in Corporate America. As an executive in the 1980s at Beatrice Foods and Kraft Foods Inc., she often hired outside consultants. Too often, she found them overworked and unimaginative. When Johnsson founded her own consulting firm 10 years ago at the age of 29, she started out by hiring MBA moms, an arrangement that met their needs for flexibility and her desire to deliver high-impact ideas to clients.

These days, the consulting staff is just 51% female. Rita S. Gallagher, 43, a mother of two with an MBA from the University of Chicago, logs in a 35-hour week but manages to lead a Girl Scout troop on Tuesday afternoons. For Michael Jefvert, 42, flexibility means that he bowls most Thursday nights and works out at the gym in the mornings. "When you're away from the client," he says, "that doesn't mean you're not thinking about your day and problems. Your brain is still spinning."

Of course, all the flexibility in the world won't turn a dull thinker into the consulting equivalent of Mozart or Picasso. You have to hire creative people to start with--and then reward them for their innovations. Among her incentive plans, Johnsson offers an "above and beyond award" for exceeding the client's expectations. Like the consultant who suggested that her client, an automotive company, start charging their customers for shipping and handling as a new revenue stream--something unheard of in the industry at the time. The client was thrilled. "The consultant wasn't asked to do it," says Johnsson. "It just came to her one day."

That sort of spontaneous combustion pleases clients like Faye L. Katt, vice-president for employee services at health-care giant Baxter International Inc., who firmly believes Johnsson Group's consultants are "very creative" because of their balanced, flexible work lives.


  That may be true, but consultants do pay a hefty price: They earn only about half as much as their big-firm counterparts. Still, turnover runs just about 8% annually, vs. an industry average of 25%. "Money is not everything," says consultant Jefvert, who worked 13 years at Amoco. "It's a trade-off, but one that I'm very comfortable with."

As for Johnsson, she's very comfortable with her financial results, thank you. Last year's revenues of $5.5 million are on track to double this year. Profits, she says, should be up 250%, and she's planning at least one new office, maybe two, for next year. (She won't say where). All in all, I'd say being nice has paid off for Johnsson, that's the bottom line.

Schatz, an editor at Small Biz, can be reached at

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