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Over the past year, we published over 350 roles for consultancies. In fact, we have posted 13 times more advisory roles than during the whole of 2020. At the same time, we’ve also found that 20% of ex-consultants now working in industry are looking to go back into consulting. In this instalment of our Market Trend series, we’re trying to find out why consultancies have been hiring so much more this year.

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Why is the demand for consultants on the rise?

Consultancies have always been eager to acquire new talents, but the pandemic has increased their need to get new people fast and in great numbers. Many businesses put their consulting projects on hold out of caution at the beginning of the pandemic in 2020. After lockdown, they were able to resume their various projects with consultancies as well as new projects. It's especially the case in high-growth areas such as supply chain, digital strategy and data analytics. These have been the most requested requirements from our consulting clients this year, given the digital shift for businesses and the global population that took place over the pandemic.

This is very logical but the situation that consulting firms are facing at the moment is quite unique. These firms are always cautious to have a perfect employee/project ratio. Therefore they are incredibly vulnerable to talent shortages if they experience a sudden surge in project demands. In just a few months, Movemeon’s work in the consulting space grew from 17% to 40%. This highlights the rapid need firms have for new talent to meet their clients’ demands in the risk of having to turn down work times and times again.

A global talent crisis

Another strain on firms, and a reason why consulting is in such high demand at the moment, is an overall talent shortage crisis. Many jobs are created and many people leave their current employment, but there aren't enough candidates to fill those vacant positions. Usually, businesses tend to resort to freelancers and/or consultants to quickly compensate for skill shortages. Consultancies can provide experts more readily than businesses can hire a full-time team member. This is especially true now since consulting fees were lowered in the past year. However, clients have high demand in terms of expertise and consultancies need to adapt to these demands. They can no longer sacrifice depth of expertise for readily available teams of generalist consultants. Instead, they need to provide readily available teams of actual experts with the appropriate capability.

A need for both Expertise and Flexibility

This can also explain why we have seen so many boutique consultancies getting in touch with us to hire for their team. They’re building up teams of experts that have the capacity to react swiftly to clients’ demands – whether they’re in a freelance capacity or joining the firm full-time. Over the 350 jobs posted this year in consultancies, nearly 75% were in boutique consultancies and the ratio between permanent and interim positions was roughly proportional. Interestingly, both boutiques and larger firms were mainly looking for Associates and Managers level – consultants ready to hit the ground running in terms of projects, with roughly between 3 to 8 years of previous consulting experience, these seniorities accounted for about 70% of the roles we helped consultancies to hire for in the past year.

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A quick Google search will show you that the existence of the cover letter or not is constantly put into question. Are cover notes still relevant? Do employers even care about them? In this article we explain why they are still relevant, although at Movemeon we prefer to speak of an elevator pitch, but how you can write an efficient and modern elevator pitch to secure your dream job. We also share some tips to write a perfect CV using consulting skills.

The importance of a cover note

Cover notes are sometimes considered optional. At Movemeon, we don’t think they are - but neither do we like the traditional cover note approach, that's why we speak of elevator pitch rather.

Your elevator pitch is what separates you and your skills from other candidates with basically the same CV. It’s a chance for you to show and tell where you have delivered. For instance, if you have worked on an interim project with a major client, your elevator pitch gives you the space to flesh out your achievements, and why they are relevant for this application.

The cover note is the main way of separating out the strengths of two people’s candidacy – you can use your elevator pitch to show exactly why this experience makes you the best for the role.

It is important to remember that Movemeon is a network of candidates with excellent skills and experience. As one of our members, you have a really strong professional and academic background. It’s also very likely that you have been through some form of consulting experience in your career – maybe you’re still working as a consultant as you read this. You belong to a great community of extremely skilled professionals on Movemeon, but this can also mean that your profile might be similar to other candidates’. The elevator pitch is the main way of separating out the strengths of two people’s candidacy – you can use your elevator pitch to show exactly why this experience makes you the best for the role.

How the Movemeon Client Success Team uses the elevator pitch

Cover notes help the Movemeon Client Success team to do two things. First of all, we can write a clear summary of your approach in your own words. If we only have a CV to look at, this is more difficult to do because we don’t have your experience, and don’t know how you would describe it and what else you would say about it. An elevator pitch really helps us to come with an initial shortlist of candidates to present to employers.

Second of all, your elevator pitch makes it much easier for us to get you, as a candidate, into the interview process. Think of the elevator pitch as a sales crib sheet, or a selling aid to the client. If a candidate has gone the extra mile for us as a Client Success team to help themselves to really stand out, then it makes our job of presenting that candidate to an employer a lot easier.

What you should put in your elevator pitch

• A CV can be a very limiting document because it is essentially a list of skills and achievements, your cover note gives you the opportunity to explain why you are applying to this specific role and what motivates you to get this job as an individual.
• You need to choose what you include carefully to fit with the role’s requirements and with your personal goals – this is the best way to show your own personal motivation for a job.

A CV can be a very limiting document because it is essentially a list of skills and achievements, so it can be difficult to build a bridge between this document and somebody’s personality.

• The elevator pitch is not about bringing your CV to life, but rather bringing your experience vis-à-vis the job requirements to life.
• Consulting is very impressive experience in and of itself, but it might not necessarily be particularly relevant for the position you’re applying for – focusing on a couple of missions in your elevator pitch can bring more relevance to your experience.
• Focus your experience on what the company has asked for and keep to the point so that you can communicate your motivation efficiently.
• If it helps, you can think of your elevator pitch as your own personal sales pitch.

Some methodology points

• Presentation has far less importance than the actual content. We often see that the best elevator pitches are the ones written in bullet points.
• Ask yourself why and how are you the best for this specific role in this particular company?
• There isn't a length guide, but the best ones our Client Success team has seen were about 150-200 words.

It really doesn’t need to be a long document for it to be great.

• The content of the pitch needs to be presenting your strengths in the most relevant manner.
• Always think of the reader as you write your elevator pitch. You need to present yourself in the best light possible, and ensure that your candidacy is very strong.
• As you write, take into account that you will be read by a hiring manager and the Movemeon Client Success team who will receive many more applications.

In summary, keep it concise, keep it to the point, keep it lively. And make sure that it's really accurately answering the question. We tend to recommend going for a bullet point model, but there’s nothing wrong with injecting a bit of flair into your writing. 

Mistakes to avoid

• Avoid classic copy paste errors. We've seen quite a few copy errors where people have mentioned the wrong company or forgot to remove their placeholders. This is the sort of thing that definitely needs to be avoided because it doesn't look like a particular level of care has been taken over applying to a specific brand or job.
• Just make sure that the covering note shows that you've invested in yourself and invested in the brand that you're potentially going to be working for.

In case of doubt, just focus on what the job wants and what you can bring to it and who you are.

• It’s really good to make sure to keep it grammatically tidy and run spell check through it. Good proofreading is essential.
• Avoid mis-researching what you're going to be writing. There's been a few cases where we’ve seen people present addressing the wrong stakeholder, the wrong hiring manager, or the wrong company. The advantage of the Movemeon elevator pitch is that it's a box that you fill, so it’s a very simple format which does not call for the traditional letter format. In case of doubt, just focus on what the job wants and what you can bring to it and who you are. You need to be absolutely sure of the facts you mention, and make sure that you've got a hundred percent confidence in that information.

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Tell us a little about your early career.

After completing my Bachelor degree in manufacturing engineering, I joined Hershey’s in India, who were also just setting up operations in the sub-continent. I started in candy manufacturing, moved to trade sales and distribution, and then stepped up to manage primary logistics and planning for multiple product categories. Given the early stage of the business, I was exposed to a number of different functions and was able to really get under the skin of the business.

I then pursued a two-year MBA degree at the Indian Institute of Management (IIM), which included a summer internship with Amazon in their customer experience and analytics team for North American markets. 

After my MBA, management consulting appealed to me as the next career move. I had developed a strong understanding of the FMCG sector, but I was keen to broaden my skills and experience. I joined Deloitte Consulting in their strategy and operations practice in India. The role was truly global, with consultants jetting off to every part of the globe - supporting US-based clients in their local and international operations (air miles and points galore!!).

I spent my first 2.5 years with Deloitte in the US, where I worked across multiple verticals in strategy, M&A and change management. I then spent another 3 years between Japan, Taiwan and India, with retail and consumer product clients. 

Then the final piece of the puzzle - moving to Australia! My wife wanted to do an MBA, and decided to study in Sydney at AGSM (UNSW). Again Deloitte supported my move and I worked in Australia on some great projects. 
After close to 7 years with Deloitte, I began to think about what my next career step would be. A client-side opportunity with a business in the consumer goods space felt ideal, considering my interest and experience… which is why the opportunity with Endeavour Group on Movemeon was definitely one to explore!

How have you enjoyed the first few weeks of your new role?

It’s been an incredibly busy time at the Group, but it’s been really enjoyable so far. Not only is the time of year busy, being in the middle of strategy formulation and cascades throughout the business, but we’re getting to the final stages for separation from Woolworths. The team is great, a mixture of ex-consultants and investment bankers, and I am very excited about the next few months, as we establish ourselves as a new entity. 

[Endeavour will officially separate from its parent Woolworths Group in July 2021, when it will be Australia's leading retail drinks and hospitality business and an ASX50 company.]

What’s your best piece of advice for consultants looking to move into client-side roles?

Ideally 3-4 years into consulting, and once you have fine-tuned your consulting 101 skills, it may be worth aligning to a smaller number of industries that you are most passionate about. In my personal experience, potential employers resonated more with experience in a similar industry, rather than functional expertise across multiple industries.

What’s your best piece of interview advice?

Make sure you work on your own personal “sell story” as part of the application process. Why are you a great fit, based on your skills and experience? Also give the interviewer the confidence that you can jump in and add value straight away. This can be anchored on your familiarity and past experience in a similar industry.

How did you find out about Movemeon?

Pete [Asia-Pacific General Manager at Movemeon] invited me to join - I’m glad he did!

Would you recommend looking for opportunities through Movemeon? Why or why not?

Yes. The key is that Movemeon offers a curated experience. The roles are so much more focused and relevant, you know you won’t be wasting time scrolling through a bunch of irrelevant opportunities. 

Also you can be confident that the Movemeon team will be supportive throughout the process, compared to a job board where you could apply and then never hear anything again...

At Movemeon, we connect (ex)consultants and freelancers with job opportunities, advice & events. Register now to view and apply to jobs, for insider advice & networking/industry events.

You’re coming to the end of a freelance consulting project, it’s been fun – great team, challenging work, key milestones reached. You found the project through a recruitment agency. The client pulls you aside one day and asks if you’d be willing to lower your day rate and extend for some follow-on work. You take a minute, consider the request and push back to say that you’re working at the lowest possible rate…

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You’re crunching the numbers in your head, trying to rationalize the request. Realizing the conversation has taken a slightly awkward turn – to date, it’s only been about project success and Friday beers; not about the money – you muster up the courage and ask the client why you can’t continue at your current day rate. After a brief pause, they say, ‘because every day I keep you on site it’s costing me X, you certainly don’t come cheap!’.

You’re now slightly embarrassed and taken aback by the figure and you suddenly realize what your total cost to the client really is. After a moment to collect your thoughts, you work out that a large portion of that total cost is going to the recruitment agency that placed you. Frankly, you feel a bit robbed.

What is the mark-up a recruitment agency is charging on me?

Unfortunately, the conversation above happens far too often too many of the freelancers I speak to. They often overlook one of the key questions that should be in every freelancer’s arsenal when negotiating day rate – ‘what is the mark-up a recruitment agency is charging on me’? The answer is often a surprise and a shock too many – to hear that a recruitment agency is taking anywhere up to 100% of the value of your day rate for each day you work is not only unfair, but it’s also plain wrong.

Naturally, there is an ongoing facilitation fee for the service a recruitment agent has provided – but, like with so many other areas of recruitment today, the lack of transparency around the total mark-up simply enhances the unease many candidates feel when working through an agency.

Transparency first

That’s why, here at Movemeon, we are insistent on providing full transparency around what our fees are, helping you avoid awkward conversations like the one above! Firstly, through Movemeon, you will negotiate and agree your day rate directly with the client.

There is no middle man involved and Movemeon has no influence. Movemeon then charges a commission which is paid by the employer, rather than being taken off the rate you agreed. So, you get a day rate you’ve negotiated and are happy with.

Everyone knows what’s going on. And the client saves up to 75% compared to the commission paid to recruitment agencies.

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Economically, a Movemeon subscription makes complete sense.

WHAT HAVE YOU LIKED ABOUT HIRING THROUGH MOVEMEON?

Working with Movemeon has further educated us on recruiting for the ex-consulting experience. They have helped refine our selection criteria and the consultancies or projects we should be looking for. We still have a lot of learning to do, but now we have learnt a lot more about what we are looking for and how to attract that skillset.

I give the support received from Movemeon 10/10 - there is nothing else I could have asked for or wanted.

Every CV on Movemeon has something to offer

Email us at info@movemeon.com if you'd like to find out more about our subscriptions

WHAT MAKES US DISTINCTIVE / STAND OUT FROM OTHERS?

The quality of candidates has been so much higher than we’ve seen after a general push into the market using something like LinkedIn. Movemeon has a bigger pool of relevant candidates; every CV on Movemeon has something to offer.

Also, working with Movemeon is not a selling-type relationship. Because we have an annual subscription, the financial discussion is out of the way. It’s now more about collaboration. Gaby (Client Success Manager for Liberty Global) especially has been incredible - she’s really proactive and always really quick to reply. I had some early trouble with the system, and she was really patient talking through it. Really appreciated!

WHY DID YOU CHOOSE OUR SUBSCRIPTION PRODUCT?

It’s a product that makes sense to companies that have hiring teams internally. 

We looked at what we would pay a recruitment consultant and reckoned if we filled 2-3 roles in 12 months, it’d already paid for itself. So economically, a Movemeon subscription makes complete sense.

OPERATIONALLY, IS THERE ANYTHING ELSE THAT WOULD HAVE BEEN HELPFUL?

When briefing on roles, there was a great blend of listening and asking relevant questions. Recruitment consultants usually either bombard you with yes/no questions or you can tell they aren’t listening because they already have candidates in mind. That doesn’t happen with Movemeon.

INTERESTED IN A MOVEMEON SUBSCRIPTION? CONTACT US TO FIND OUT MORE

Jumia ($824m), Monzo (£325m), Transferwise ($773m), Funding Circle ($746m), Zopa (£360m), Qonto ($151m), Gocardless (£95m), Jobteaser ($75m), Innovafeed (€55m). Just some of the most well-known and celebrated start-ups. Four have reached unicorn status; the others are hoping to. And they were all founded or co-founded by ex-consultants. 

In this article series, we look at why there are so many consultants founding successful businesses. We’d like to start by thanking the following for their time and great insights: Alexandre Prot (Ex-Mckinsey & Qonto founder), Aude Guo (Ex-Mckinsey & Innovafeed founder), Antoine Loron (Ex-Roland Berger & Hublo founder), Martin Pellet (ex-Kearney & LBF founder), Grégoire Schiller (ex-Roland Berger & Simundia founder), and Nick Patterson (ex-McKinsey & Movemeon co-founder).

The “consulting profile” and why some are driven to start companies

“Consultants that started with me at McKinsey had two things in common: firstly, they were some of the highest achievers I’ve met; secondly, they didn’t know what they wanted to do.” (Nick)

Consulting attracts high achievers as it is one of the most prestigious careers post-university. This is partly because the brands are so well-known across industries, but also because it is recognised as a career that opens doors.  

The combination of high achievement motive, and uncertainty around what you’re looking to do - not a single founder interviewed had entrepreneurship in mind when they joined consulting - means there are a lot of consultants who look to leave after a few years.

Turnover is extremely high in consulting, and whilst some of that is driven by “up or out” policies, the majority of the people leaving do so because they didn’t want to follow the track to Partner. And this is commonly accepted within the business. People can therefore talk openly about leaving, and in return receive great advice that gives you the confidence to launch businesses. Interestingly, both Nick and Alexandre mentioned that consulting gave them the confidence to launch businesses.

Finally, and that’s more an explanation of numbers rather than success, consultants know they have a strong employer brand to fall back on in case it goes wrong. This also means you have some very marketable short-terms skills - the option of  freelancing to supplement your income from a new business gives you more liberty to try and start something.

Consultants are great do-ers, despite what you may have heard!

The myth that consultants aren’t do-ers is regularly parroted. However, from what we’ve seen of peers and the consulting alumni community, quite the opposite is true.

In the early days of setting-up Movemeon, the most common challenge we’d hear from potential employers was that they didn’t want to hire consultants. They were concerned that, whilst they were very good at advising, they weren’t good at executing.

We couldn’t agree more on the importance of execution, but the common misconception about consultants not being good at delivery is just that - a misconception. Martin said that the high day rates charged by consultancies (especially strategy houses), and the high standards demanded by boards of large businesses, mean consultants have an obligation to deliver results and have to learn to deliver at pace.

On top of being good do-ers and dealing well with time pressure, consultants are also particularly good at multitasking. Alexandre, in the early days of Qonto, was able to work on strategy, finance, management, marketing and even office management. Antoine also highlighted that in a similar way to consulting, when you’re an early-stage founder you learn by doing.

Being good at multitasking, being good “do-ers”, and working with tight deadlines, it looks like early-stage start-ups have more in common with consulting than what we would have expected.

In the second part of this article - to be released in two weeks - we'll look at the key skills developed in consulting that help you launch and grow a start-up.

We’ve also published an in-depth interview with Innovafeed founder Aude Guo here.

At Movemeon, we connect (ex) consultants and freelancers with job opportunities, advice & events. Register now to view and apply to jobs, for insider advice & networking/industry events.

Jumia ($824m), Monzo (£325m), Transferwise ($773m), Funding Circle ($746m), Zopa (£360m), Qonto ($151m), Gocardless (£95m), Jobteaser ($75m), Innovafeed (€55m. Just some of the most well-known and celebrated start-ups. Four have reached unicorn status; the others are hoping to. And they were all founded or co-founded by ex-consultants. 

In part 2 of our article series, we look at the way some of the key skills developed as a consultants help with founding successful businesses. We’d like to start by thanking the following for their time and great insights: Alexandre Prot (Ex-Mckinsey & Qonto founder), Aude Guo (Ex-Mckinsey & Innovafeed founder), Antoine Loron (Ex-Roland Berger & Hublo founder), Martin Pellet (ex-Kearney & LBF founder), Grégoire Schiller (ex-Roland Berger & Simundia founder), and Nick Patterson (ex-McKinsey & Movemeon co-founder).

Problem solving and prioritization: key skills for founders

Movemeon was founded by two Mckinsey consultants, and therefore our work as a team has been influenced by strategy consulting. Problem solving and prioritisation are omnipresent in our day-to-day.

Those two skills are central to consulting work. Diagnosing issues (issue trees, driver trees) and using data to prioritise execution are the central aims of any consulting project.

Alexandre said that his consultant background helped him to structure his reasoning to tackle any complex problem. Aude and Martin agreed on this point: in an early-stage start-up you keep resolving problems, such as how am I gonna finance this project? What type of offices should we choose? More generally, how do you do things efficiently?

Grégoire highlighted that consulting gives you the structure to effectively prioritise using concepts like 80/20. Aude defined the ability to prioritise as hugely important. She said “It’s mostly about what you don’t do, not what you do. You need clear criteria to make decisions (not only for yourself but also understandable and acceptable to others; and something that is engaging).”

Networking and communication

If the network is a pretty obvious benefit of consulting, it's surprising how often effective communication has been described as a key skill learnt from consulting.

Consultancies have unparalleled alumni networks. There is a shared brand that means people are prepared to not only meet, but give you advice, too. This is invaluable in the early days, as you look to further develop your idea and, perhaps more importantly, make your first few sales (if your product is B2B). Grégoire remembers using Roland Berger’s network for closing first clients. Unlike business schools, consulting networks are usually more senior than you and therefore unlock way more opportunities when you’re an early-stage founder.

Working with senior people in consulting trains you in effective communication. Aude said “communication is key, as 80-90% of the time being a founder is about aligning people and getting to the point quickly. Our business has people of very different professional backgrounds and needs; you need to quickly understand and address what is important for each person in a way that is relevant for them to get them on board: how do you convey the real message (get to the point)? It’s about not spending one hour on a topic if it can require only 3 minutes.“

Related to communication, stakeholders management is a key skill developed in consulting. You need to be able to communicate in the right way with everyone: investors, clients, suppliers.

Consulting and entrepreneurship are still obviously two really different worlds. Grégoire empahsised that you have to unlearn consulting to do entrepreneurship as the way you make decisions can be very different. Nevertheless, consulting is undoubtedly a great training ground for entrepreneurship.

It trains you in many key skills needed by early-stage founders: communication, stakeholder management, prioritisation & problem solving. Having worked with 100+ start-ups, mostly founded by ex-consultant, in the last 2 years, and helping to fill roles like Director of Sales Operations for 360Learning, Country Manager for Hublo, Head of Partnerships for Luko, it's clear that consultants are a great fit for start-ups. Speaking to Alexandre, Aude, Antoine, Grégoire and Nick only reinforced that the transferable skills you get from consulting are essential for start-up success.

How does being a consultant naturally lead many to founding their own start-ups? We looked at this question in Part 1 of this series

We've also published an in-depth interview with Innovafeed founder Aude Guo here

Qonto founder Alexandre Prot spoke to us about Qonto & how he uses his consulting experience here

At Movemeon, we connect (ex) consultants and freelancers with job opportunities, advice & events. Register now to view and apply to jobs, for insider advice & networking/industry events.

Qonto offers the best current account for businesses, available online and on mobile with an appealing modern interface, a very responsive customer service and simple and transparent pricing.

Founded by Alexandre Prot and Steve Anavi, Qonto has raised €136m with Tencent, DST Global, Valar Ventures (launched by PayPal founder Peter Thiel), Alven (investor in Stripe, Algolia, Birchbox, Drivy) as well as the European Investment Bank.

Qonto are currently hiring for a Product Manager and a Head of Revenue Growth through Movemeon.

In your own words, please describe why you set up Qonto and what the business does

We created a first company with my business partner Steve Anavi, and we were very frustrated with our own banking experience. It was not only time-consuming and complex but also didn't include modern tools to suit modern companies. We decided to tackle these frustrations and to create the service we would have loved to use as entrepreneurs.

We offer a full-featured business finance management solution so SMEs can focus on what really matters.

Where do you see Qonto going over the next year? And over the next 5 years?

Next year, Qonto should get its own credit institution licence and become a bank in order to offer new services to its clients. 

In the next 5 years, our ambition is to be the leading Business Finance Management solution to allow all SMEs to focus on what truly matters.

Back in the early days of Qonto, how did your previous experience at McKinsey help you?

My consulting background helped me to structure my reasoning to tackle any complex problem.

What also really helped me was the multi-disciplinary experience that I acquired at McKinsey. I was able to work on strategy, finance, management and marketing for Qonto. And at the beginning, you really need to be a "multi-tasker" (I was even in charge of office management, and was actually enjoying it).

You went to McKinsey directly after school; did you already have entrepreneurship in mind at this time?

I was not really thinking of founding my company at the time, and thought I wanted to learn and discover lots of things in a "structured" world where you learn from your peers and managers.

My years in consulting definitely helped me acquire some skills and maybe most importantly the confidence to found a company myself. I also really used my MBA year at INSEAD to think about my "next step". I met with a few inspiring entrepreneurs and this also convinced me not to go back to consulting.

What is your day-to-day job like now, and is your McKinsey experience / network still helping?

When you are the CEO of a fast-growing company, no two days are the same!

I spend a lot of time with my team on different operational topics: sales and marketing, finance and compliance, international expansion. 

One of my top priorities is also hiring, so I meet a lot of candidates as we are planning to hire 100+ people in 2020, and having the right people is key. 

I'm also one of the spokespersons of the company, which means that I also spend a lot of time representing Qonto in events or interviews.

As an ex-McKinsey founder, do you like hiring the ex-consulting profile at Qonto, and why?

We do indeed like to hire ex-consultants because they tend to have transferable skills. They can structure / analyse a problem, and do a great project management job.

We have several consultants (from McKinsey and other firms) on the team. But the most important thing is really the fit in with our values (Ambition, Teamwork, Mastery, Integrity), and the energy to build an amazing service and team together, not necessarily the CV.

What would be your advice for a consultant looking to found their own start-up, or to transition into a start-up job?

Don't be afraid, if you have the right idea addressing the right problem, you have everything you need to make it a success! And do not feel like you have to wait a lot to "gain experience" - the sooner you get started, the better.

At Movemeon, we connect (ex) consultants and freelancers with job opportunities, advice & events. Register now to view and apply to jobs, for insider advice & networking/industry events.

In this article, we look through four trends that we’ve seen over the past few years:

- The changing needs of clients
- Increased hiring of consultants in-house
- The growth of large “one-stop-shop players”
- The rise of smaller, more flexible consulting boutiques.

Finally, we look at the immediate reactions from strategy firms, as well as what we think is going to be required for the industry to avoid Levitt’s “Marketing Myopia”. Strategy firms have clearly started to adapt, but in an increasingly digital world, they need to think of delivery models beyond just throwing smart people and industry experience at the problem. To do this, they must fully embrace technology.

Finally, we look at the immediate reactions from strategy firms, as well as what we think is going to be required for the industry to avoid Levitt’s “Marketing Myopia”. Strategy firms have clearly started to adapt, but in an increasingly digital world, they need to think of delivery models beyond just throwing smart people and industry experience at the problem. To do this, they must fully embrace technology.

“MARKETING MYOPIA”

On the first day of our consulting “mini-MBA”, we were taught about marketing myopia – a term coined by Theodore Levitt. It explains the pitfalls of focusing on marketing strictly from the standpoint of selling a specific product rather than from the standpoint of fulfilling customer needs.

At some point in its development, every industry can be considered a growth industry, based on the apparent superiority of its product. But in case after case, industries have fallen under the shadow of mismanagement. What usually gets emphasized is selling, not marketing. This is a mistake, since selling focuses on the needs of the seller, while marketing concentrates on the needs of the buyer.

As I re-read this paragraph now, I can’t help but feel it’s a message to be heeded by strategy consulting firms. Having helped their clients to overcome marketing myopia for years, there are some strong indicators that the early “disruption” we’ve seen in consulting, has only just begun.

THE CHANGING CLIENT NEEDS

As the world’s online interactions continue to grow, the needs of a large proportion of clients have changed.

• Firstly, the prevalence of data has changed clients’ needs. Previously, strategy consultancies were able to bring data from a market to a client. Insightful analysis of this would help identify trends and potential drivers of future change. Now, this data is not only far more readily available, but there are also far more internal data, which is often even more pertinent.

• Secondly, companies have built up more in-house skills and tools. They are becoming more effective in using their data. Products are now built around data, rather than seeing what data comes out as they sell their products/ services. This helps companies to constantly iterate and evolve. Fast-growing tech corporates are constantly iterating strategies, at all levels in the business, directly as a consequence of better data and insight.

• Thirdly, companies with a large online presence face very different challenges to more traditional industries. New worlds of UX, product management and Big Data are suddenly of critical focus.

• Finally, with the constant threat of recession and low levels of GDP growth, clients are more budget constrained than previously. In years gone by, the promise of 10x Return on Investment was sufficient to defend the large up-front fees. However, with more constraints, clients are starting to look for more flexible models that can be delivered at a lower price.

INCREASED HIRING OF CONSULTANTS IN-HOUSE

There’s always been a steady flow of consultants into the “strategy” teams of corporates. In fact, most graduates choose consultancy to “open doors” in industry. Traditionally, consultants would make their first step into a strategic role, and then look to move into a commercial role when they understand the business fully and had built up the necessary stakeholder network.

However, what’s starting to change is consultants are being hired into non-strategy roles. As the skills of consultants (analytics; insight; communication to senior-level stakeholders) become required in more areas of the business, consultants are increasingly being hired into commercial/ operational roles straight out of consulting. Equally, as consultancy becomes more functionally specialized (i.e., supply chain consultants; tech strategy consultants), there are more obvious entry points.

This is a self-fulfilling prophecy: as more consultants are in these teams, they look to hire “what they know” (i.e., more consultants). As numbers increase, not only is there less “need” for external consultants, there is also more competition for this talent.

THE GROWTH OF LARGE ONE-STOP-SHOP ADVISORS

The largest growing strategy firms over the past few years have been at the Big 4. Through the acquisition, and hiring senior partners, they are building strategy teams out of alumni from the familiar strategy brands (i.e., hiring from McKinsey, BCG, Bain, Oliver Wyman, LEK; acquisitions of Booz and Company (PWC) and Monitor (Deloitte)).

The Big Four are able to boast an impressive point of difference: these strong strategic minds are backed up with scale. On the functional side, they become a one-stop-shop: use them as a trusted advisor across accounting, tax, legal, strategy and operations/ implementation consulting. This scale is positioned as not only offering a more connected, end-to-end solution but also as providing large savings in cost.

On the people side, their immense size means they have more flexibility. They can offer smaller projects, and more flexible models – as capacity can be more easily managed.

THE SMALLER, MORE FLEXIBLE BOUTIQUES AND FREELANCERS

The other exciting development is the rise of freelancers and small two to three-person boutiques. This has become a popular career choice, offering more flexibility and independence. At one end you have boutiques, who staff whole teams and are positioned as direct competitors of the strategy firms. What’s less publicized is the smaller boutiques and freelancers.

At Movemeon, we are seeing a lot of interest in either a junior manager resource (stand-alone; good stakeholder management skills) or putting together small teams (manager and two analysts) to deliver strategic projects. Whilst the cost of these projects might appear very different to a traditional strategy consulting project, the set-up and delivery might not be all that different. While it’s unlikely these small boutiques/ freelancers will attack the core of strategy consulting work (i.e., critical Board decisions), the periphery of work that has slowly built up over the years is very much in danger from this more flexible, cost-effective model.

HOW ARE STRATEGY FIRMS ADAPTING

There are some notable reactions to the changes in the market. Not only are we seeing a new series of business innovation models, but consulting firms are also looking at new ways to have access to a larger, more flexible workforce.

The new innovation business models were well documented in the HBR article “Consulting on the cusp of disruption” in October 2013. This trend has continued, with new implementation, operations, analytics, benchmarking “arms” to the top strategy firms. Typically these are operating under the strategy brand name (i.e., McKinsey Solutions; McKinsey Implementation), but there are a few subsidiaries (i.e., Finalta is a subsidiary of McKinsey focused on benchmarking in FS). These are going to continue to develop, and am sure are a large part of the disruption we are going to see.

However more recently, another interesting trend has occurred. Consultancies are starting to respond to the requirement for more flexible delivery models. No longer is the “manager plus 2” model as relevant to some situations. Clients need longer-term engagements, typically for less intense periods. As the work becomes more functionally based, it also becomes more entrenched with the business. As such, things will move more slowly. No longer is delivery seen as buy-in from the excess – it’s delivering change to these functional areas, which will always take longer to embed.

We’ve noticed two interesting trends in consultancies looking to offer more flexibility:

• More flexible employment. The top-tier strategy firms are looking for innovative ways to keep talent. We’ve had a number of very interesting discussions around how consulting can become more flexible – this is to counteract losing great talent as a result of the lifestyle. Whether the 3-day working weeks or 7 months on 5 months off type models have more traction, will be interesting to see.

• Freelancer pools. We’ve seen the strategy firms look to introduce “surge capacity”. At Movemeon we are currently working with 7 strategy firms to help them build “freelance pools”. These are pools of strategy consulting alumni, who are now freelance. This not only allows these firms to better manage utilization, but it also allows them to provide more flexible models of delivery to clients (i.e., longer-term; lower touch). This has traditionally been very hard to offer unless you have the scale of the Big 4.

CUSP OF DISRUPTION – WHAT DOES THE FUTURE FOR STRATEGY CONSULTANCIES HOLD?

Consultancies grew rapidly over the past two decades. As a result, the share of work that is classic strategy has been steadily decreasing and is now about 20%, down from 60% to 70% some 30 years ago, according to Tom Rodenhauser, the managing director of advisory services at Kennedy Consulting Research & Advisory (Consulting on Cusp of Disruption, HBR). If strategy consultancies are going to keep their current scale, they need to innovate to keep this non “classic-strategy” periphery.

Consulting has been on the cusp of disruption for two years now. Whilst there are clearly changes afoot, we think this is just the beginning. We expect to see further hollowing of the centre, with more specialized firms/ freelancers and continued consolidation of larger firms. We are also expecting freelance to continue its growth, and will increasingly take the more peripheral work from the larger consultancies.

However, for us, the most important change that needs to happen is more flexibility in delivery. Clients needs have changed. Whilst steps are being made to offer more than just traditional consulting teams – there needs to be more innovation. Consulting needs to move away from smart people helping to solve problems and embrace more technology – the ability to provide products for their clients to provide them with solutions to their problems.

Strategy consultancies can keep the “periphery” (non-classic strategy work) they have grown over the past few decades, by providing “products” that serve their clients over the long-term. Strategic advice can then take the form of shorter projects focused on solving particularly thorny issues. Given the exciting innovation and number of startups in the space, expect some acquisitions in the not too far future. Consultancies will start to see innovative products not only as high-margin delivery lines but as critical to continuing to provide their high-end advice.

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