What did the Romans ever do for Italian consulting?

By Edward Haigh

On 7th June 1494 Spain and Portugal signed the treaty of Tordesillas, which divided the world outside Europe between the two countries: anything to the west of a meridian 370 leagues to the west of the Cape Verde Islands would be Spain's. Anything to the east would be Portugal's. Notwithstanding the centuries of rape which followed*, 513 years later this saved both countries consulting markets.

When the financial crisis struck in 2007, and subsequently morphed into the sovereign debt crisis in Europe, the domestic Spanish and Portuguese consulting industries took a major hit. Markets which had always been price-sensitive became price-bloodbaths, as the battle for survival raged. Some firms entrenched, still more diversified. Many went bust.

You might have expected to find those who did survive bent double, wounded and gasping for breath, in the midst of carnage. In fact they remained both sublimely sanguine and conspicuously absent. The former owes much to the latter: "How's the Spanish consulting market at the moment?" we'd ask consultants in Madrid. "Terrible" they'd reply with sunny detachment, "but the South American market is fantastic!" Where their forebears had carried big sticks, Iberian consultants were now walking softly, picking off the opportunities afforded to them in places like Brazil and Mexico using a potent combination of cultural similarity and western knowledge.  They still are. It means spending a lot of time crossing the Atlantic but that's a small price to pay for survival.

No such luck in Italy. Here market conditions are very similar, even if the make up of the industry is subtly different (more mid-sized consulting firms serving more mid-sized, family-owned, businesses) and while there's an argument which says that Italian consultants have failed to respond with anything like the ingenuity of their Spanish counterparts, the fact is that they've had fewer escape routes. Their empire crumbled too long ago.

But to sit back and bemoan the lack of recent imperial successes would be to miss a cultural escape route of different sorts. We're already hearing about Italian consultants being involved in the nearby emerging markets of Eastern Europe, but they're starting to turn up further afield, too. Why?

I suspect the answer has a lot to do with those subtle differences. More specifically, I suspect it's about Italian consutlants' knowledge of family-owned businesses. In the UK (as in many other parts of Western Europe)  family-owned businesses tend to be little shops that don't buy a lot of consulting. In Italy they're often industrial giants that do. In fact Italian consultants arguably get what it means to be a family-owned business better than just about any other western nation. Sure, they understand issues like succession planning and how to professionalise functions which have been cobbled together over decades, but more importantly they understand the culture of family businesses, and that really makes the differences in places like Eastern Europe.

In fact, what they could do with is a rapidly-growing market (20% year-on-year would probably do it), a few hours' flying time away, full of family-owned businesses which are increasingly coming under the control of young, western-educated leaders who are receptive to the idea of using consultants. As it happens we know of one of those, and it won't require a papal decree to lay claim to the opportunities it presents.

Consultants of Italy, welcome to the GCC.

*I'm British. Mea culpas.