Chapter on "Strategy From the Viewpoint of Management Consultants"

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[EXCERPT] . . . .

Strategy From the Viewpoint of Management Consultants

The role of management consulting firms continues to go through a transformation as clients to these firms face an entirely new series of challenges and complexities in keeping their businesses viable. The intent of this analysis is to evaluate the key consultancies and their four major areas they are actively selling to potential clients. Five of the leading management consultancies are included in this analysis including Accenture, Bain & Company, Boston Consulting Group, McKinsey & Company, and Monitor. Unifying the value propositions and services all of these services are offering is a common thread of growing businesses in stagnant and slow-growth markets, penetrating new global markets with China being mentioned most often, and aligning information technologies strategies to business goals. These three areas dominate the services offered by all five consulting firms listed. A secondary set of factors also emerge in the area of analytics, business intelligence and pricing, all critical areas for keeping an existing business on track to profitability during turbulent economic times.

Analyzing The Value Being Promised By Management Consultancies Today

Inherent in any services-based business is the promise of value being delivered in the future based on a consulting agreement put into place in the present. There are many references to this dynamic of management consulting firms. It is most often referred to as management consultancies aspiring to be trusted advisors for their clients (Visscher, Visscher-Voerman, 2010). All five of the management consultancies mentioned in this analysis concentrate on depth and breadth of industry expertise to underscore the trustworthiness of their services. How each packages these areas of expertise and presents them varies significantly, as each has a unique consulting and services model. Despite these differences in how they promote and sell their services, all share a common foundation of providing the greatest breadth and depth of customer success stories in the areas of growing businesses in stagnant and low-growth markets. This theme of guiding companies looking to gain market share profitably in small markets is so pervasive across all five management consultancies that individual practices have been designed in each of these firms around this area of strategic planning. The larger firms including Accenture, Boston Consulting Group, and McKinsey & Company have partners writing books on this topic, promoting frameworks and concepts to further underscore their potential to deliver value. All firms included in the analysis have extensive social media and social networking programs to promote all content produced, including videos from their conferences and programs. All of theses firms also rely on their senior partners to blog on their latest research to further promote the latest studies as well. The largest firms differentiate their content on social media into customer success stories vs. frameworks and insights from the latest empirically-derived research. All of the research content taken in aggregate is deliberately positioned to further strengthen the firms' role as a trusted advisor to potential clients. The approach each of the management consultancies take with regard to growing businesses in stagnant and slow-growth markets however varies based on their industry expertise, depth of implementation and strategic planning staff members, and previous results attained in all industries.

Management consulting firms including Accenture combine their core strengths in enterprise mobility strategies and IT planning and development to provide prospective clients with the assurance of new market development using their existing IT architectures. Bain & Company, Boston Consulting Group and Monitor also take this more synergistic approach to defining new business development strategies in stagnant and slow-growth markets. The focus on using IT strategies as the foundation for re-vamping selling strategies across multiple distribution channels is unique to Bain & Company within this first major attribute area all share of growing profitably in stagnant markets. McKinsey & Company attempts to show how their global expertise and depth of economic research insight are critically important for growing a business in challenging times. All of these varying approaches to selling management consultancy expertise in growing businesses in stagnant markets revolve around trust and proven execution. It is doubtful any CEO or board of directors would give such a daunting task as stabilizing the growth of their business to an unknown or unproven management consultancy., The continual development and publishing of content including thought leadership studies is critical for any management consultancy to continue growing. In the particularly daunting task of selling clients on helping them turn around their businesses in stagnant and low-growth markets, budget dollars for consultancies are also often at a premium.

A second strategic area all five share is promoting their ability to help clients [penetrate high growth markets including China. This is different than the first factor in that the focus is on foreign, difficult-to-reach, high growth markets throughout the Brazil, Russia, India & China (BRIC) block of nations. All five firms concentrate on providing evidence of how they have been able to transform their client's businesses, making them more innovative and able to address new market requirements. Of the five firms analyzed in this study, Monitor's approach to selling their capability to assist firms in innovating processes, products and strategies is the most grounded in measurable results. Innovation as a unique value proposition of management consultancies is highly valued, as the quantification and measurement of new product development processes can be used as a key differentiator in selling services (Mors, 2010). The focus on penetrating new markets is also often combined with the legacy expertise of a given consultancy. This is another approach to compete in the mainstream of popular areas of the industry while still retaining uniqueness regarding core competencies. Accenture continually stresses IT management and governance in conjunction with new growth in emerging markets for example. Boston Consulting Group combines the focus on innovation with the promise of being able to create effective frameworks for applying new developments to strategies aimed at emerging, high growth markets. The underlying value each of the management consultancies is selling however is consistent, all make the commitment they can guide their clients to be more innovative and profitable too.

A third strategic area all management consultancies concentrate on is in promoting their services for aligning information technologies to business goals. Accenture has depth of expertise in this area, as they have been acting as a system integrator for many of the world's leading technology companies for well over a decade, creating a successful consultancy as a result. Accenture also has the advantage of having customer success stories on their website and throughout all social media channels further underscoring their value delivered and the ongoing success of their clients. Bain & Company and Boston Consulting Group both take an industry-specific view of this aspect, brining in their industry-by-industry expertise with information technologies strategies aligned to business goals. The Boston Consulting Group has also been working to take their classical strategic frameworks including the BCG Matrix and Growth/Share Matrix and applying it to the needs of clients for IT systems and infrastructure transformation to support new business strategies. The use of classical frameworks to new challenges clients face is giving them credibility in their core 19 markets served, as evidenced by the wealth of content on this thought leadership initiative. McKinsey & Company takes the approach of beginning with business strategies first, and then showing how IT can be used to accomplish profitable results. Of the five consultancies included in the analysis, only McKinsey & Company begins with a process-based re-engineering focus and then works back from the actual strategies to the IT systems used to manage them. This is unique as all other consultancies included begin with IT and then map strategies on top of a technology infrastructure. The net result for McKinsey & Company can show how the selective use of technology contributes to more effective results for business strategies. No other consultancy takes this minimalist approach to technology integration to support business strategies. Accenture in fact takes the opposite approach of showing how technology is critical for business strategy development, as evidenced by the extensive focus on pricing management and metrics-driven re-engineering of business strategies.

While all five consultancies share the three common strategies mentioned, the differences between each are just as insightful as to how they intend to deliver value during engagements. McKinsey & Company and Monitor rely on their global economics insight in conjunction with entrepreneurship in emerging markets, with Monitor specifically mentioning Asia and China. All consultancies mention global expertise, yet only these two have practices specifically dedicated to econometrics and forecasting the impact of macroeconomic factors on strategies at the firm level. These economic studies are published for the general public ands used to further underscore thought leadership in this area of complex study and research only a few firms have the ability to provide. Ironically only one firm mentions sustainability and green initiatives, despite there being a myriad of regulations on this area today in Europe and about to become a major issue in the U.S. The focus on sustainability and green initiatives puts… READ MORE

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