The blind spot in the GCC consulting market

The GCC consulting market grew by 20% between 2011 and 2012 and is now worth about $1.9bn*.  That makes it larger than the consulting markets of both Spain ($1.5bn) and Italy ($1.4bn).  In fact, on its current trajectory, it will be bigger than the (far healthier) Nordic consulting market by the end of 2015.

But could it be even bigger?

We’ve discussed the reasons underpinning growth before: the regional economy, the social and political imperatives which are driving investment and change, and a shortage of highly-skilled local people.  But the clients of consulting firms would point to another issue – the way in which firms try to sell their services.

It will come as no surprise to anyone inside or outside the Gulf that this remains a strongly relationship-based region.  While multinational working practices and more formal procurement processes are working their way up through the management echelons, spending power and consequently influence remains concentrated in a small number of very senior people, creating barriers which even high-end strategy firms can struggle to overcome.

It’s tempting, in such an environment, to rely on a traditional formula: relationship selling and high-level marketing aimed at building and maintaining brand awareness.  But that would, our research suggests, be to misread the market.  What strikes us, listening to senior clients in the region, is how dissatisfied they are.  “All the major firms have account managers, but the quality varies widely,” said a Dubai-based HR director. “Everyone produces nice glossy hand-outs, but what we want to see is more case studies, more client experiences.  They’re supposed to be selling knowledge and expertise, but evidence of tangible achievements is scarce.”  “I’d love to have a better handle on which firms do what,” complained a senior Saudi government official, “but they all talk in very generic terms.” “Very few firms bother to send me anything,” said a strategy director, talking about thought leadership, “especially once they’ve won the work.”  “I do receive and read their material,” said another, “but it’s rare that there’s anything really relevant.”

Is this really different from any other consulting market?  We think it is, not because what the consultants are doing is worse, but because clients in more developed markets tend to have a better understanding of the consulting industry – and the sales and marketing efforts of consulting firms is designed to build on this. The equivalent foundation in the GCC is thinner and much of it is provided by Western executives.  Local clients want more information, but they don’t want to patronised; consulting firms, sensing a cultural minefield, ignore the issue.  Yet, as one client put it, “if they were better explaining what they do, we’d buy more from them.  They’ve only got themselves to blame.”

(* Note that we focus on what we call ‘big consulting’, i.e. consulting work done by consulting firms with more than 50 consultants, typically for clients with a turnover in excess of $500m.)