I remember having an animated discussion with the CEO of a professional services firm once about their right to take a market-leading position in problem solving. His resistance was based on the fact that, statistically, such work constituted a relatively small part of what they did, even though it was the work that the whole firm loved, and that they had built their reputation on.
How can we claim for that work to exemplify what we do when it is a smaller proportion of our fees?, he asked me. Unless you want that trend to accelerate, how can you not make a stand in the market as the strategist of choice?, I replied.
What do you want to be known for vs what you actually do the most.
Or as Rolling Stone put it so brilliantly: Perception vs reality.
This review of the state of strategy consulting suggests the dilemma was not his firm’s alone. Strategy is still the poster-activity for the smart set, but more and more firms are finding that strategy, while still the activité du jour of a thought leader, increasingly represents less and less of the money in the door. Strategy may be what they’re known for, but the real money it seems gets made much more prosaically. Consider this: “behemoths such as McKinsey and BCG, to maintain their above-industry-average growth rates and keep their global office networks humming, have broadened what they do and moved down the food chain.” In fact, according to the article, pure strategy is on the way to becoming the loss leader that firms ‘invest’ in, in order to win the bankrolling work.
You can read this a couple of ways. If you’re an optimist, it’s a sign of the convergence of thinking and execution into a seamless whole. If you’re a cynic, you’ll see it as one more step towards action at the expense of direction. Either way, if strategy is to avoid commoditising, it’s going to have to reassert its value or risk steady deterioration.
Does strategy consulting itself need a new strategy?