2012: the year the consulting industry fights back?

The thing about a double, whether an espresso or a recession, is that it implies that the second experience is the same as the first – and that’s a mistake.

The 2009 recession in consulting was, while shocking, not unexpected.  It took a while for the full fallout from Lehman’s demise to be felt by the industry, so there was time to wind down recruitment activity in order to bring supply in synch with lower demand.  Moreover, consultants are reasonably familiar with boom-bust cycles: having seen demand grow quickly in 2004-07, most recognised that some level of correction was on the cards.  That sense of cyclicality determined firms’ reaction: hatches were battened down; key relationships were maintained; playing safe was the order of the day.

It’s a reasonable response, but one that’s predicated on recovery – the equivalent of holding your breath while a big wave washes over you.  Adopting the same approach a second time around may not be possible and is certainly not desirable.  There’s a limit to how long you can hold your breath: at some point you have to start swimming.

Those are the stark choices facing consulting firms in 2012.  If you assume – and it would be sensible to do so – that this year will see declining demand in some Western markets and low growth at best in others, then one option is to repeat 2009’s strategy of hunkering down.  But the other option will be to fight back.  This requires a more aggressive approach, eschewing further rounds of generic cost-cutting in favour of honest conversations about what works and what doesn’t in business, genuine innovation and a relentless focus on helping organisations grow.  But above all else consulting firms need to shed the unwritten assumption that they’re helpless spectators, pulled, like their clients, to and fro by economic tides outside their control.  The industry should be making waves not waiting to be submerged.