How are “Market Leaders” quantified and defined? Do we lend greater credence to profit margins, customer satisfaction or brand perception, and how do we accurately aggregate an objective study when all market players offer different services and purport to differing values?
The genesis of the Management consulting industry has seen the rise and fall of many firms; businesses are acquired and sold, markets entered and withdrawn from, economic disasters weathered or yielded to. The self-proclaimed creators of Management consulting as we know it, A.D Little, were once the prestige brand. After a corporate restructuring in 2002, Arthur D. Little sold off parts of its business (and reduced its workforce by almost half), shifting its HQ and culture from the North American market to a more euro-centric offering. AD Little now stand regularly in the lower echelons of the consulting landscape.
For many years now, the elite Consulting paradigm has been that of “MBB”, or the “McKinsey BCG and Bain” era. Strategy Consulting has always been held in higher regard than Technology or operations, and so especially in the economic boom years, blue sky thinking has won these companies extreme profit and credibility. But in times of austerity, focus shifts to operations; clients look at improving process efficiency reducing costs and maximising profits, and more and more expect Management Consultancies to not only provide strategic direction, but also operational design and implementation services. McKinsey in particular have a very mature operations practice, and brand their services as such, with the “McKinsey Implementation Service” for example. In published leagues (based on industry employee opinion – read more here), McKinsey stand 2nd overall in operations, with Accenture losing last year’s top spot to Deloitte. McKinsey remain leaders in Strategy, and remain top overall in the management consulting world despite losing out in technology and certain industry domains.
General opinion is not an exact science, so is it anything of importance? Opinion is subjective, and on the recruiters side of the fence we get great insight into not only external opinion, but also proportionate internal opinion and the hard facts. Alix Partners for example, do not figure highly on the overall league table based on the mean market opinion. However, if you take a look at the internal perception, how their own employees see their standing, they would be much higher up the league, something that cannot be said of many of the top 5 based on cross market opinion. Alix Partners are currently booming, it could be said outperforming many of their rivals. According to Alix employees, they are outperforming rivals, delivering greater results in less time at a punchy yet market-appropriate price-point. All senior staff are delivery focussed, with much of their business being repeat client-requested. The same surely cannot be said of the Big 4, many of whom stand tall in terms of general perception, but have a sometimes dissatisfied workforce, rigid process, and rely on profitable ERP engagements and winning business with aggressively low rates.
So who is top dog? And does it really matter? Perhaps there is room for everyone, an employer and business partner for all, with room even for smaller consultancies to thrive in a competitive landscape. Or will the market become even more homogenised, as clients demand a more comprehensive and overarching solution to all their business issues at a competitive price? Will we see more acquisitions such as the PWC / Booz engagement, with even the likes of McKinsey, BCG and Bain in the future merging with Big 4 players and Accountancy firms? If the last 100 years are anything to go by, there are interesting times ahead, and the future top dog may be a very different mongrel-breed.
By: Oliver Smith