By Anna Teo

THE adage about seizing opportunities in a crisis couldn't ring more true for Mercer - or its chairman and CEO, Michele Burns.

In September last year, when it was apparent that the American economy and business climate could be looking at some rough times ahead - then just from sheer ripple effects of the US sub-prime mortgage fiasco - the consulting firm launched an advertising blitz centred on key client issues for which it offers insights and solutions. One year on, the corporate challenges around outsourcing, mergers and acquisitions, health and benefits, retirement and investments, managing human capital, have of course become big concerns, what with recession and retrenchment now predominate in the business landscape, in the US and beyond.

And the banner message across the advertising campaign that ran in the firm's markets worldwide - including three newspaper ads in Singapore just recently - proclaims in big, bold print: 'It's time to call Mercer'.

For Ms Burns, 50, who became chairman and CEO in September 2006, six months after joining parent group Marsh & McLennan Companies Inc as chief financial officer, Mercer's role and place come to the fore in the present climate when companies find themselves resorting to downsizing to stay afloat.

'One of my calls to arms, if you will, for my Mercer colleagues is that we help shape the conversation that occurs between governments, employers and employees,' she said on the sidelines of the Singapore Human Capital Summit last month, where she was a speaker. Her visit also coincided with Mercer celebrating 30 years in Singapore.

And yes, she would expect Mercer's services to be 'at least as in demand, if not more in demand' during the downturn, she says, because when the chips are down, companies want to know how to structure their work force against the downturn.

'How are their work force plans? Do they need to retrain? What do they do as they think about being in a downturn for a period of years? All that often involves rethinking your retirement plans, your health and benefit plans,' she says. 'It may well involve rethinking how you compensate and reward, how you provide a total rewards environment for your executives as well as your rank and file. So those questions come up, and they need help to answer those questions.'

There's also the aftermath to anticipate.

'It will be a surprise to me, and many others I think, as a result of these economic times and the massive amount of wealth that has been taken out of the system, if we don't see a second wave of legislation around things like employee benefits and healthcare benefits, and pensions in particular,' she adds. 'And as that begins to happen, Mercer should be at that table to try to help think through how the changes should be made legislatively, but obviously also then to help the employer sort out what those legislative changes are and sort out how to respond to them.'

It's already happening in the US, she pointed out, with the spotlight on executive compensation, among other things, in the wake of new regulation in the financial sector.

'For instance, how do we reward executives who work in industries of this nature? Congress has a way of prescribing rules that don't have a lot of meat behind them. It's just concepts. Well, then Mercer comes in and helps the clients understand what the intent is, and how will we function under that regulatory environment. Having said that, yes, focus and attention for perhaps very forward-looking projects may slow. But they may well be replaced by more urgent and immediate needs as a result of the financial crisis.'

She cites a 'real life example' from her stint at Delta Air Lines, where she was CFO from August 2000 to April 2004.

'During a downturn, one of the first things many companies do is they say, we have to close our plants. We can't use those workers right now, we need to either absolutely take them out of the work force permanently or design programmes where we can get them back. So, after Sept 11 (2001), just to give you a real life example of a different crisis, Delta had to, within six weeks, identify and create opportunities, if you will - we tried to make them opportunities - for 13,000 people to no longer be on Delta's payroll.

Crisis management

'And so we had to design at Delta early-out programmes, on top of outplacement. So, for example, early-out programmes where we would say - elect early retirement and we'll give you a five-year pension credit. We would say, we believe that the demand wouldn't stay low forever, just in this crisis. We won't be in this crisis forever, business will come back. We didn't want to let all our employees absolutely go off and away from Delta. And there were certain numbers of employees, based on their age and demographics, that were able to go on the 'follow' programmes we designed. So the human resources consultants - Mercer was one of them - were always at Delta during that period of time.'

She adds: 'I think we must remember that most companies, at least most thinking companies, don't think of their human capital assets as assets that can be merely disposed of, and then be able to be received back. The churn factor is very high. So being much more thoughtful about how you flex your work force to a situation like this will pay massive dividends when growth returns.'

Ms Burns, who started out with Arthur Andersen in Atlanta out of university, rising to become the firm's first female partner in the southern US, is certainly not unfamiliar with tackling corporate crises. One could well say that she chooses to walk straight into one - as she did at Mirant Corp.

But the lessons and skills in crisis management were honed at Delta. Her 18 years at Arthur Andersen were 'a period of growth', she says. 'Arthur Andersen took a kid from college who went to school in the deep south of the United States of America and helped train and grow that kid into a business person.'

She did consulting on both tax and HR issues, 'serving clients, identifying solutions to address issues of the day, watching legislative change and being responsive to legislative change on behalf of clients - very similar to much of what Mercer does today'.

After 18 years, she took those skills 'and a lot of great relationships' to Delta at the start of 1999, and learnt more about perseverance and 'staying calm and collected in a crisis'.

It was an interesting transition, she says. 'In 1998, Delta's net income after taxes was well over US$1 billion. So, very profitable, very successful airline. In 1999, I believe the number was in the order of another billion dollars. In 2000, we had about US$897 million in profit after tax. I remember the numbers because it was pretty impressive. In an airline, if you were generating that kind of income, you were generating very significant cash, very strong. It meant you were able to invest and grow. It was a pretty powerful place to be, pretty exciting times. So my first two and a half years at Delta were in that phase.

Impressive numbers

'So we were there and all of a sudden, Sept 11 happened. And everything changed. Overnight. Even our global economic issues of the day weren't so sudden. They feel very sudden to us today, but if you were a company that was making hundreds of millions of dollars of income and more hundreds of millions of dollars of free cash flow one day, and the very next morning, wake up and not have that environment any more, it was quite remarkable in that if you ever doubt you can ever respond to a crisis, listen, react in a different way and change - change your whole perspective - then that episode proved to me at least that I, and we as a team at Delta, could do those things.'

She continues: 'We had chosen to go into the debt markets just before, literally the Thursday before, Sept 11, and we had sold some debt, because we weren't desperately in need of the cash. But we were going to buy some aircraft, and we priced that debt very attractively - it was four times over-subscribed.

'So we had four times the buyers to the amount of debt we wanted to issue, so very attractive, very healthy. But as with any kind of debt transaction, you don't close that day, you close a few days later, and our closing bridged Sept 11. And so I like to say - four days before Sept 11 we were four times over-subscribed, four days after Sept 11 we couldn't get people to go ahead and close. Now, we ultimately did. It was the very first debt transaction to close post-Sept 11, a US$1.25 billion transaction, where the credit markets found their way home to actually lend to Delta days after Sept 11. So it was one of the things I'm most proud of my team for being able to accomplish in that period.'

Atlanta-based energy company Mirant was 'a crisis of a very different sort', she says. 'That restructuring opportunity was in some ways jokingly referred to as 'extreme finance', because it was finance under a great deal of pressure.'

She was at Delta when Mirant approached her. 'They came and solicited for me to come and perform the job of chief financial officer and chief restructuring officer. At that time, Mirant had filed for bankruptcy a year before, and it was one of those acrimonious bankruptcies - the creditors and the company were misaligned, it was a very difficult, tense, stressful environment. And I did self-select. I mean, I did choose to go there and take that on as a challenge. It was a wonderful challenge, because the company, in my judgment, basically deserved to be saved. There were a number of jobs at risk, the company had good plants and facilities.'

And Mirant did turn around, in January 2006, and is thriving today. 'We did emerge, complete restructuring, the balance sheet was strong, the creditors got paid in full, and so the restructuring was highly successful in that regard. So for me, it was a great challenge to use the skills that I had honed over the years, put to very good use and help a very talented team, if you will, save a company.'

The time at Mirant taught Ms Burns perseverance and determination, 'but also a different level of negotiation, and patience, because there was no speeding up the process. The bankruptcy process is a process', she says. 'And so I learned a lot about patience in the face of our own impatience - continued crisis management, ability to stay cool under pressure, but a different experience than Delta'.

And then the Mercer experience so far 'has been just wonderful', she adds. 'It takes all of those things, the blend of consultative skills and the belief about people and the belief about the business model, where a highly skilled consultant comes to survey a client to solve a problem, all my feelings about how important that relationship is, and couple that with good business acumen, to improve, grow and expand our business around the world.'

Shaping the conversation

Mercer has the skills and capabilities to shape the conversation on human capital, she says. 'We function in 42 countries and we influence employers and influence policy in many more, and my strategic vision is that we use our intellectual capital and capabilities to do just that, to help shape a world in which economic growth is fuelled by the human capital asset in the best way possible. I think we have a key role to play in that.'

And while she was often the 'only woman in the room' at board meetings throughout her career, she has had the benefit of 'wonderful mentors' all through, she says, 'mostly male, because there weren't any women around'.

Outside her corporate life, Ms Burns - who spent most of her career in Atlanta but now lives in Manhattan - has been involved with the Atlanta Symphony Orchestra, and used to work the hotlines at a shelter for battered spouses.

But her single biggest mission outside work is the Elton John Aids Foundation, of which she is a founding board member and its treasurer since its inception in 1992. 'We basically built it from the ground up. It's now very productive. It has given away in the order of, with matching grants, US$16 million in funding over the years. The foundation travels the world metaphorically in terms of its capabilities to touch and reach.'

Elton John is a 'fun man', she says of the English singer-songwriter, 'but beyond that, when he's with the foundation, he has been so generous with his time and effort'. Describing her involvement with the foundation as a 'great thing', she says: 'I think in life it's very important - we all work hard, we all have families and lives, and of course the career is a very large portion of my time, but to have some interest outside, something you give back to society, something you give of yourself that's outside of all of that, it's very rewarding.'

MICHELE BURNS

• Chairman & CEO, Mercer
  
• Director, Wal-Mart Stores
  
• Director, Cisco Systems
  
• Founding board member and treasurer, Elton John Aids Foundation
  
• Sept 2006 - Appointed chairman & CEO of Mercer, a MMC subsidiary
  
• March 2006 - Joined Marsh & McLennan Cos (MMC) as CFO
  
• 2004-2005 - EVP, CFO and chief restructuring officer, Mirant Corp
  
• 2000-2004 - CFO, Delta Air Lines
  
• 1999 - Joined Delta Air Lines as VP for corporate tax
  
• 1989-1998 - Partner, Arthur Andersen
  
• 1981-1989 - Consultant, Arthur Andersen
  
• 1980 - MAcc, University of Georgia
  
• 1979 - BBA, University of Georgia

This article was first published in The Business Times on November 29, 2008.