- ABCs of strategy consulting
- 11 October 2016
- Lu : 8189 fois
It is not always easy to grasp the realities behind the semantic subtleties that qualify consulting firms.
Difficult borders to trace
This is far from inexplicable: management consultancy firms do their best to convince potential hires that they are involved in strategy; conversely, strategy consultancies seek to expand their area of operations, and with it their order books… Assigning a firm to one area or the other was far easier a decade ago. Back then, strategy meant “growth strategy”, in other words how to help a company increase its revenue, its offerings, its geographic coverage…
At the time, in the mid-1990s, very little was spoken of supply chain optimization, of purchases, of time-to-market, and even less of lean (management, manufacturing…). The use of consulting firms was more easily segmentable: growth strategy, organization/process, IT/systems integration. Today, organizational firms technically no longer exist (since not one firm defines itself as such) and numerous specialized firms have developed in their stead: business consulting (for instance in financial institutions), financial performance consulting and of course operational performance consulting. And every one of these “specialties” is today offered by the former organizational consulting firms (e.g. Bearing Point, Eurogroup…) and by the specialists, but also by strategy consultants.
But then what differentiates management and strategy consulting?
Here are a few tracks. In no particular order: billing rates, customer expectations, the profile of the consultants, the firms’ internal organization. And each fits together. Strategy consultancies aim for a very high average billing rate, sometimes nearing 3000 euros. If the average market rate is close to 2500 euros (for strategy consultancies), it is about half that for specialized firms (operations, business consulting…) or for the former organizational consultancies.
This logically has a strong impact on the means available to those firms. Employees’ salaries are on average 70% higher there (partners’ salaries excluded) and they are generally much better staffed on the support side of things: research, sliding, assistants, printing. Consultants are able to focus on high-value tasks, and they certainly do put in the daily hours!
For that price clients don’t just buy a solution, and in fact often not just a strategy either. Sometimes they buy power, the power to be assimilated to McKinsey’s answers for example; they buy reassurance (“BCG says so…”), they buy a consultant who is 100% dedicated to their issues and ready to devote any and all necessary energy, at any time…
Ultimately, at this precise point in time strategy consulting firms have more to do with a specific billing rate (that allows them to monopolize resources with better diplomas, and more of them) than with a precise type of mission, as was once the case. It seems likely that we are only halfway through the industry’s mutation.
Hervé Hubert for Consultor