Management consulting is a client-driven industry, and as clients’ needs change, the sector — and the firms within it — must adapt quickly in terms of services, structure and operations. The past few years have seen significant transition, particularly in terms of technology and legislation, and management consulting firms have had to respond rapidly, while maintaining their competitive edge and ensuring their own long-term growth.
On the surface, things are looking good for the UK management consulting industry. However, the sector also faces challenges that cannot be ignored.
Technology Advancement
The pace of development in digital technologies is creating new business models at a faster speed than many current company structures are able to cope with. To deal with this challenge, consulting companies must develop a comprehensive digital strategy and rethink their business and operating models in order to deliver it. There must be cross-channel connectivity and continuous engagement with all stakeholders; but, crucially, the strategy has to be about C-level leadership, and innovation and differentiation through the business and operating models.
This will enable larger firms in particular to become more agile – adopting the fail fast mindset which is often only found engrained within smaller firms. This mindset encourages innovation and inspires firms to differentiate – ultimately allowing them to provide greater value to clients.
“Innovation cannot be achieved purely by investing large sums,” says Marco Amitrano, UK Head of Consulting at PwC. “We need to adopt that ‘fail fast’, agile mentality that is seen to work so well in small businesses; we need to learn from our mistakes. As an industry we can often have low acceptance of failure, and end up valuing accuracy over creativity. It’s important to recognise this as a barrier to reinventing the way we operate, develop our people and, ultimately, provide our clients with greater value.”
Talent retention
Many organisations seeking talent are casting their nets beyond the traditional top universities, and focusing on the skills someone has, rather than where they acquired them.
At Grant Thornton, recruiting a diverse workforce will continue to be one of the most crucial priorities. People and culture leader Stephanie Hasenbos-Case says: “Three years ago, we were one of the first to identify the opportunity to be more representative of wider society, and we made some fundamental changes to the way we attract talent. This year, Grant Thornton saw a 47 per cent increase in applications for our school-leaver programme, with trainees joining the firm across 20 different office locations. Our recent analysis also found that employees who would not have met the previous academic hurdles are performing just as strongly as those who did.”
Management consulting firms are now also identifying a gap in technical knowledge and skills among both junior and senior staff. As a result, it has become very important for firms to be able to cross-fertilise staff knowledge in order to offer more dynamic, business-focused services.
If they are to remain competitive in the future, management consulting firms will need to find innovative ways of retaining clients and solving their increasingly complex business problems, while attracting the consultants of tomorrow.
For more information on these issues and what they mean for your firm going into 2017, download the 2017 Deltek Management Consulting Industry Snapshot here.