A More Perfect Union

Indie business models can flourish where the old ways fail.

Most organizations today, large and small, follow a traditional structure that involves separation into departments, each with its own responsibilities. As companies grow, divisions grow, adding employees and costs. Then in troubled times, these structures come under attack, with divisions, people and processes lopped off to save money. The reasoning is that although the company might be crippled, at least it’s still alive.

One Vancouver company has avoided this expansion and retraction cycle by operating with an ­innovative organizational structure similar to a social network – long before the phrase was common.

The Problem

Annex Consulting Group Inc. began in 1998 when founder and CEO Stacey Cerniuk left a traditional consulting job to become an independent IT consultant. Cerniuk suffered all the usual problems that independents and micro companies face: relentless competition from other consultants and having to do all his own marketing and administration.

Most importantly, he had to do all the work, which was a struggle for someone with a young family and a strong belief in work/life balance. He needed a steady client base and others to share the workload.

The Solution

Cerniuk knew several colleagues suffering from the same problems, so he made them an offer: Refer me to clients and I’ll give you a small percentage of my pay, plus we can share the work. Soon his colleagues were doing the same thing for him, the word spread and a network of IT consultants started to emerge.

The network was not only helping consultants connect for jobs; it was doing its own business development by teaming up its members for more and larger projects. In short order, Cerniuk stopped doing the work and started connecting all these people, becoming the overseer, so to speak. He soon had 20 people working on various projects for a month; that 20 doubled, and doubled again, and again. He realized he had an organization, albeit an extremely flat and collaborative one.

This was the beginning of the Annex Alliance, which has now grown to some 4,000 IT and business consultants or contractors. It reported revenue in 2008 of $12.6 million and is routinely listed among the fastest-growing IT companies in Canada.

Under the alliance’s unique business model, members receive $1 from the markup on every hour worked by every consultant they have recruited to the group. For every project they bring to the group, they are given $2 for every hour worked by every consultant on that project, which is a strong incentive to business development as well as work performance.Annex Consulting Group has almost no operating costs, other than paying out referral fees and organizing projects. A mere six people are contracted to work full-time on administration, there are almost no marketing costs and, since everyone is an independent contractor, administration costs are very low – two to three per cent of revenue.

This unique structure means that the recession has barely touched Annex; it continues to expand.



  • You gotta have friends. Because the alliance is a network with a common goal, there is no destructive competition among members.
  • You gotta have quality. Annex guarantees service quality by ranking consultants by experience and long-term industry relationships, choosing from the top and training all others in a type of mentorship program.
  • You gotta have values. The Annex Alliance is based on all-for-one-and-one-for-all thinking. If members work together, they are less likely to have to compromise personal values to obtain work.