How to grow a management consulting business
Most mid sized management consulting/business consulting firms face several challenges soon after their inception. Its generally one or a few principals that start the company off and have an already established base of clients. Soon after the initial momentum runs out though the following issues arise:
- How do find new clients
- How do they retain them longer
- How do they execute projects they have access to
There are many ways to address these but perhaps one of the easiest is partnerships:
- Supplementary partnerships: This is where here firms look to each other for additional resources or spill over work from another firm doing the same thing. These work out nicely if there is a lot of trust between parties or if the two are in a geographically distinct market however the examples of this succeeding are few and far between. The key advantage here (other than increase in geographical reach) is a reduction in the bench costs/risks.
- Complimentary partnerships: Where firms look to companies that do something else that is closely related to what they do. The most popular here is perhaps Partnering with IT Consulting firms. This is likely because IT Consulting itself is a one of the fastest growing practices this year so the two can be enabling to each other. A few examples that we have seen succeeding:
- Supply Chain focused Management Consulting firms with Integration focused IT consulting firms. A lot of Supply chain optimization ultimately leads to systems integration. The partnerships provide an ability for the Management firms to be able to execute what they recommend (rather than just oversee its execution), which, in many cases adds significant value to their offering
- Change Management or Process Optimization firms partner with Workflow/Business Intelligence focused IT consulting firms. Large scale organizational change usually leads to automation and optimization of key processes and then monitoring the performance over time. There are a wide variety of tools available in the market and firms that specialize can compliment the management consulting offer very nicely.
- Merger and Acquisition focused Management consulting firms partnering with Systems Integration firms. This is one of the most obvious yet least explored ones. M&A firms usually come from financial or legal side backgrounds. Operational compatibility is usually reviewed with a passing view of IT. Any merger usually introduces a major impact on the IT portfolio of the firms merging. Existing portfolios need to either be merged or migrated, activities that can last for years. Most M&A consulting firms however limit themselves to the due-diligence prior to the M&A or management of the merger thereafter.