Monday 5th Nov, 2018
By Fiona Czerniawska.
How much do you have to discount your consulting fee rates for if you want to have an impact on buying behaviour? 5%? 10%? 20%?
Research we carried out five years ago suggested that small price cuts make no difference, except perhaps to the procurement manager who has the lonely and thankless task of demanding a price reduction just at the point when they’re going to sign the contract. Five-percent is neither here nor there to most end-users of consulting services, because their purchase decisions are based on other, more important factors. How credible is the firm they’ve chosen in this particular area? What’s its depth of expertise, or its track record of success? What’s the client-consultant chemistry like? Can they all work together in practice?
Tuesday 21st Aug, 2018
By Fiona Czerniawska.
Walk down the main street in Noto, in south-eastern Sicily, and you’d be forgiven for thinking you’re in one of the Baroque capitals of Europe, not a relatively modest city of just 24,000 people. Ornate façades, studded with balconies, line the sides of the street; wide steps sweep up to the cathedral doors. But turn any corner and you start to realise that it’s more like a film set, an architectural veneer in front of unremarkable streets.
There’s always a risk in taking a metaphor and stretching it too far, but I do think there’s a parallel here with strategy consulting, about which we’ve just published a new report. Strategy is the baroque jewel of the consulting industry, consulting at its most complex and decorative, where utility is sometimes overwhelmed by the desire to put just one more flourish in your PowerPoint deck. By comparison, operational improvement work is a sturdy Romanesque style, and technology consulting positively Bauhaus. But, our report argues, behind the glorious edifices of strategy consulting, the reality is increasingly Noto-like.
Thursday 9th Aug, 2018
By Fiona Czerniawska.
… But he’s not your everyday, brain-on-a-stick strategy consultant. No, he feels real empathy for the difficult situations in which clients find themselves, and is genuinely sad that they don’t have an expensive fountain pen like his. Which is why he’s finding his conversation with Carl so distressing.
Carl is a client. He’s got two decades of senior management experience under his belt, and he really couldn’t care two hoots about Martin’s fountain pen. No, he’s talking to Martin, because Martin and his team have been carrying out a refresh of Carl’s corporate strategy. Of course, they haven’t been doing that by themselves: As someone who’s used almost every major consulting firm under the sun, Carl is aware of the importance of working closely with the consulting firm. Martin calls this co-creation, but Carl simply wants to ensure that his staff pick up the skills and knowledge they need to help them do strategy work in the future. Carl is also not a fan of management speak.
“… so, this could be ground-breaking collaboration,” Martin is saying.
“Great.” Carl finds Martin faintly amusing and doesn’t want to hurt his feelings. He does, however, want to interrupt Martin’s smooth and apparently unending monologue by asking an important question. “But I’d also like to talk about how we measure the value you add.”
Wednesday 11th Apr, 2018
By Alison Huntington.
You don’t need me to tell you that digital transformation is big. It’s already a massive market ($44bn by our latest estimates), it’s growing rapidly, and it’s right at the top of the corporate agenda. What’s more, by being multidisciplinary by nature, and requiring a breadth of consulting services to be truly transformational, it’s particularly big news for big firms. Which, if anything, makes it even bigger.
But what does that mean for mid-sized strategy firms? Several barriers to these sort of firms playing in this space spring up, at least in theory: They’re not big enough to have the global reach many clients require; their breadth of services is unlikely to be as wide as the biggest firms; and they may simply not have enough people to deploy, particularly when it comes to turning strategies into action.
Thursday 8th Feb, 2018
By Fiona Czerniawska.
At a recent event in the UK, I and my co-director, Edward Haigh, had a couple of pictures of planes, a nice little bi-plane, and a whopping great A380. We’re both closet plane-spotters, and Ed harbours a not entirely secret desire to do the public announcements on long-haul flights (“Tray tables stowed… “). But that wasn’t the point: We were actually talking about the need to base your proposition on something more than gut feel.
We were talking about transformation. We estimate that the consulting market around digital transformation was worth around $44bn in 2017. That’s considerably higher than in 2016, not because clients are spending a lot more money on consulting overall—in fact, we think that the global growth rate in 2017 will turn out, once we’ve crunched around 10m numbers, to have grown by around 7%—nor because the definition of digital transformation has suddenly changed, but because digital transformation has increased the rate at which it’s colonising other consulting services. The market is a bit bigger, but the portion of that market that’s digital transformation is much, much bigger.
So, why the planes?
Tuesday 26th Sep, 2017
By Fiona Czerniawska
In previous articles on this blog, we’ve talked about ‘Fortress Strategy’, the idea (originally voiced by a client) that the major strategy firms remain firmly in a segment of their own. Clients, looking for independent support around a strategic, probably contentious decision, that will re-shape their businesses, will only turn to one of a very small number of players. But what sounds like a fabulous position has serious disadvantages: while clients see a big wall between these firms and the rest, they’re as reluctant to let them out, as they are to let others in. The fortress, in other words, becomes a prison.
Tuesday 25th Apr, 2017
By Fiona Czerniawska.
Avid readers of our blog will be familiar with our concept of Fortress Strategy: the idea that clients have mentally erected thick walls around the major strategy firms that prevent other firms entering their space, but which equally trap strategy firms in a business model that doesn’t necessarily suit current market conditions.
Wednesday 5th Apr, 2017
By Fiona Czerniawska.
Size has long mattered in the consulting industry: in the last five years, we estimate that firms with more than 1,000 consultants have grown by 46%, 2.3 times the rate of smaller ones.
That’s not new: if you went back to the 1970s and tracked firms’ growth since, allowing for all the inevitable mergers and acquisitions, you’d see that the firms that dominated consulting then are still those that rule the roost today. Smaller firms come and go, but the big firms march relentlessly on. There are several reasons for this. Big firms are more likely to work on big projects for big clients: if you’re the CEO of a major corporation you’d don’t hire a ten-person firm to do the global roll-out of your new strategy. You may bring small firms in for specialist advice, and you may well be prepared to pay a premium price for that, but you don’t expect them to cover the ground. With more money coming in, big firms have been able to invest in account management, so they’re alert to upcoming opportunities and are more likely to win them because they know those involved. The biggest firms, too, have been able to attract the best people because they pay more and claim to offer more interesting work with iconic brands.
Thursday 9th Feb, 2017
By Fiona Czerniawska
At last he rose, and twitch'd his Mantle blue:
To morrow to fresh Woods, and Pastures new (John Milton, 1608–1674)
There’s comfort in the familiar - and nowhere is this more true than in consulting, where levels of repeat business (new work sold to existing clients) are typically between 70% and 80%. The fact that clients keep coming back for more is a testimony to the good work being done - and our research shows that around two-thirds of clients would describe the quality of consulting work as ‘high’ or ‘very high’ (only a small proportion are explicitly negative). But the obvious danger is that this situation makes firms vulnerable to sudden change and - at worst - complacent.
Monday 23rd Jan, 2017
By Fiona Czerniawska.
“The difference between cybersecurity and other types of risk is that, with cyber, we have to assume we’re being attacked right now, we just haven’t realised it.” That’s how a client we recently interviewed summed up his organisation’s attitude—and he’s not alone: other forms of risk (regulatory, reputational, operational) may be possible, but cyber attacks are a reality.
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