Booz, Kearney and Co

The possible merger between AT Kearney and Booz and Co has created quite a stir.

So far much of the attention has been focused on what this means for the other big strategy firms. Is McKinsey, Bain or BCG likely to feel threatened? My guess is not, not least because this move – if that’s what it is – is just part of the way in which these firms are trying to chisel out a distinctive profile for themselves.

The much more interesting question is about the doors the merger would close, rather than the ones it would open. One of the key trends in the last year, as strategy consulting struggled to adapt to the recession, was the move of the Big Four firms into the no-firm’s land between traditional strategy and operational improvement work. Able to undercut the rates of the traditional strategy houses, they’ve also been able to trade on their more hands-on way of working. But they still struggle to make it to the very top of client organisations, a point reinforced by a straw poll I carried out with clients recently. Asked whether they’d put a Big Four firm in the same bracket as a McKinsey or Bain, I wasn’t exactly laughed out of court, but I did get squeaks of bemusement and even disbelief.

One way to solve this problem would have been to link with a firm such as Booz. It would also have meant a significant jump in size as well as credibility.

As no one knows for sure whether the merger is even on the cards, let alone whether it will go ahead, one of two things will happen. A merged Booz and AT Kearney will, I suspect, intensify pressure on the Big Four, pushing them into looking more intensely at who they could link up with. No merger will probably trigger a bidding war, with the Big Four eager to hook up with one of these firms before any other buyers come along.

4th June 2010