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.
Wednesday 29th Mar, 2017
By Fiona Czerniawska.
We’re only three months into 2017, but it’s already clear that the word of the year in consulting will be robotics.
It’s rapidly becoming—some would say has become—the catch-all phrase for the use of new digital technologies, including cognitive computing and artificial intelligence, to automate parts of the consulting process. It’s a huge opportunity: as a previous article on this blog argued, there are aspects of strategy consulting—to name just one example—that could be done better and more quickly by machines, leaving people to spend more time analysing and interpreting the data. But inevitably it’s also a challenge—or rather two challenges.
Friday 17th Mar, 2017
By Fiona Czerniawska.
A recent article in The Economist argued that globalisation was already “in retreat” before politicians started talking about the need for greater protectionism. In 1990, when McDonald’s opened its first branch in Moscow, the firm “embodied an idea that would become incredibly powerful: global firms, run by global managers and owned by global shareholders, should sell global products to global customers”. But the return on equity of the top 700 multinationals has fallen to 11%, down from a peak of 18% ten years ago; moreover, if we compare the ROE of multinational firms with that of their local competitors, the latter often do better. “Global reach has become a burden, not an advantage”, The Economist concludes.
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