Where is the growth in growth?

The growth agenda: it’s on the lips of virtually every consulting firm at the moment. Private sector clients, blinking in the macro-economic daylight, want to develop new products and launch them into new markets. They want to know how to innovate, how to recruit the best people from emerging markets and how to re-engage consumers in more jaded ones. Growth-related projects often have a caché within consulting firms beyond their size because the results are more tangible than most consulting services (a new product launched, a new marketing campaign). Most consulting firms are as bored as clients are with cost-cutting and these services help reposition them from recession to recovery.

But clients aren’t necessarily willing to put their money where they mouth is and, where they are, they may be putting it into different mouths.

Our research suggests that the market for growth-related consulting among clients with a turnover in excess of €500 million (“big consulting” in our terminology) was worth just under €600 million across Europe, the Middle East, India and Africa in 2010, equivalent to about 2.5% of the total market, and utterly dwarfed by strategy, operational improvement and IT consulting.

So why is the market apparently so small? One explanation might be that the figures are misleading: that work which is driven by the need to grow isn’t always labelled as such by either clients or consultants. Helping a bank review its branch network is probably something that would be classed as operational improvement work, even though at least part of the motivation behind it might be improved customer service. Another could be our definition of “big consulting”: niche firms, because they’re more specialised, may be winning a disproportionate volume of work. Moreover, there’s little to be gained from clients doing the same thing; cost-cutting, you could argue, is more generic. Perhaps growth-related projects don’t require armies of consultants, but are biased towards analysis and recommendations rather than implementation.

But even if we take all this into account, the market looks small. Consultants shouldn’t give up on cost-cutting just yet.