Anyone in the management consulting industry knows that today’s firms face a host of business challenges, some age-old and some brand new.
The forces driving change are many and various. Disruptive technology, the rise of new business models, and the pressures exerted by intense global competition are transforming the marketplace. At Hinge, we wanted to build a focused understanding of the top issues that are occupying firms in 2015 – and what that means for the industry at large. So we got down to research.
Diving into the Research
In order to find the answers, the Hinge Research Institute conducted a study of over 530 professional services firms. Respondents were senior management figures within the firms, and the study covered a range of firm sizes and industries.
Our respondents discussed not only their business challenges but how they planned to address them, identifying marketing techniques and implementation strategies.
This allowed us to build a picture of both the professional services landscape as a whole and the management consulting industry specifically. Ultimately, we were able to identify both broad trends and industry-specific data-points. For those seeking the full, multi-industry story, we’ve made the complete research report available for free online.
In this post, our aim is to examine the business challenges and priorities of management consulting firms. So what are those priorities, and what do they mean for the industry?
The Top Business Challenges
The top five overall business priorities for management consulting firms paint a striking picture of the marketplace today.
Let’s go over these challenges one by one.
1. Attracting and developing new clients.
This concern tops the list at 81%, and it is a key point: while new business is the overriding priority of every industry we studied, it tops the list by a considerably higher percentage for management consulting firms. For comparison, 72% of all professional services firms cite generating new business as their number one challenge.
In the world of management consulting, the need for new business is noted by over three times more respondents than the second-highest challenge. This is a defining concern for firms of all sizes, and the struggle for new clients is likely to shape the future for many firms.
2. Dealing with a difficult economy/competitive marketplace.
The signs of competitive pressure are echoed in the second business challenge, named by just over 25% of respondents in the management consulting industry.
This is an active, increasingly global marketplace. Competition is heating up as multiple international players intensify their efforts. As economic sluggishness prevails in some markets, many firms are looking and will continue to look to others for opportunity.
3.Finding and keeping good people.
A highly competitive marketplace means a highly competitive talent environment as well. The research tells the story clearly. Finding and retaining the best people will be a top agenda for about one in four management consulting firms (24%).
From the standpoint of setting marketing priorities, this is particularly notable. It may mean prioritizing the consideration of a specific audience, potential recruits.
Fighting for the best talent is always a business challenge. But this year, the competition will heat up as the talent war intensifies.
4. Innovation/new ideas.
In addition to its strong focus on generating new business, this was another distinguishing feature for the management consulting industry in our study. Respondents were focused on innovation at a higher rate than in most other industries, with about a quarter of management consultants citing it as a top concern.
In order to face this challenge, in 2015 firms will have to find ways to not only generate those new ideas but share them effectively with their audiences. Those audiences will include both prospective clients and industry influencers.
To stay competitive in today’s marketplace, you can’t simply build a reputation on the claim or idea of innovation. Firms must showcase their expertise, thought processes, and results. The winners will be the organizations that show the world how they innovate.
5. Strategy/planning issues.
As we’ve seen, management consulting firms face an array of diverse challenges. Given the urgent need to develop new clients, find and keep quality people, and continuously innovate, it’s not surprising that coordinating all of these activities is a key concern among our respondents (24%).
In order to contend with these many different pressures, organizations will have to identify sophisticated and efficient strategic approaches. They will have to continue to find ways to use time and resources more effectively as they work to counter new competitors and find new clients – all while competition encroaches.
Turbulent times foster tremendous change, and this is precisely the reality that management consulting firms are facing. To adapt to rising marketplace pressures, to get and stay ahead, they will have to adopt a variety of marketing techniques. But by using those tools successfully, they have the opportunity to build robust brands.