Looking for growth in the Nordic consulting market?

“If you had to be reborn anywhere in the world as a person with average talents and income, you would want to be a Viking”, wrote The Economist recently.

Management consultants in the Nordic region might beg to disagree: a comparatively strong market in 2011, 2012 saw many firms struggle to grow.  Yes, the market in Norway is positively buoyant (a bubble, some would say), largely driven by the energy sector, but the picture elsewhere is more downbeat.

Our new report, launched suitably enough in Oslo last week, reveals that the Nordic market as a whole grew by just over 2.5% in 2012, to €2.2bn.  But while Norway grew by 5%, the Finnish market shrank slightly, with the Danish and Swedish markets in between.   From a services perspective most increase in activity is focused around three major areas: growth (which, represented by our ‘marketing and selling’ service line, grew by 9.6% between 2011 and 2012), operational improvement (6.6%) and technology (3.9%). But there is a far greater degree of volatility in the market by consulting service than there is by sector: the difference between the fastest-growing service (marketing and selling) and the slowest (HR and change management) was more than 13%, while the difference between the fastest-growing sector (energy and resources) and the slowest (technology, media and telecoms) was just under eight per cent.

What matters most, of course, is what happens next – and on this front management consultants should take heart. We’ve expanded our research this year to include predictions from clients around the volume and type of consulting services they’ll be looking for in 2013. Just over 40% of the organisations we contacted said their expenditure on consultants is likely to grow; a quarter said it will grow by more than 10%.  And we’re not talking about small businesses here: these were all large-scale organisations, many of which already use consultants quite extensively.  That’s roughly twice the proportion of organisations who said their expenditure would increase at the start of 2012 and, while that shouldn’t lead us to assume that the region’s growth rate will double in the next year, it certainly points to a more positive market.

Why the change?  Much has to do with a gradual rise in business confidence: the eurozone’s troubles are not yet at an end but there was a sense that they are containable.  Some relates to the pressures of globalisation.  Nine out of ten organisations we spoke to said they needed to exploit new technology and cut costs in order be competitive in this wider marketplace; eight out of ten needed to identify new avenues of growth.  Many of these organisations will turn to consultants to help them do this, to help them implement the changes not simply advise on them.

But if we had to pick one word which captures the underlying impetus for growth, it would have to be transformation.  Incremental improvements simply aren’t enough for most Nordic organisations: they want to effect change on a larger scale and at a more profound level.  But it raises the stakes for the consulting industry.  Most consulting firms will say they implement these days, but how many of them can credibly claim to transform?