Are smaller professional service firms primed for success?

The consulting world has undergone a seismic shift over the past decade.

Traditionally, consulting firms were built on the pillars of professionalism, selective client engagement, and deep expertise. Growth was not the end goal but a natural byproduct of providing top-level strategic counsel. Consulting pioneers like Marvin Bower of McKinsey and Bill Bain of Bain & Company championed a philosophy where firms prioritised advising senior executives on their most pressing challenges to maintain credibility and trust.

The pursuit of growth
However, the modern consulting industry has moved away from this model in the pursuit of growth. To get a bigger slice of the pie, firms have expanded their services across a vast array of industries and functions.

For many consultancy firms, having a broad service offering has been mistakenly seen as increasing their competitive advantage. In reality, this spread of services can dilute their core offering. And as the leaders direct the market, other consultancies rush to broaden their offerings, creating commoditisation; and with commoditisation comes pricing pressures, and undifferentiated positionings that fail to communicate a coherent understanding on what real value they bring.

How growth changes the teams within
The route to expanding products and service lines has often been through the rapid acquisition of smaller specialist firms.

And, while many consultancies may offer M&A change management services, many face the challenges in orchestrating and integrating clashing cultures, teams and processes. This, in turn, delivers disjointed client experiences, and loss of depth of understanding as projects move from strategy to execution.

What’s more, as tends to happen with rapid acquisitions, the founders and executive team can get managed out, deleting the experience, connections and skillsets of the visionaries that created the acquired company’s value. And, this can set off a chain reaction in staff defections as cultures and processes are absorbed and lost into the buyer’s culture and processes. That loss of vision and talent that is the driving force of generating revenue morphs your acquisition from a revenue driver into a cost item on your balance sheets.

The financials of growth
Speaking of financials, there are other impacts to the bottom line when it comes to the prioritisation of growth for consultancies. Many consultancies have moved away from their typical fee structures. In a traditional consulting model, the onus of risk often falls solely on the client. Clients pay hefty consulting fees upfront, with no guarantee of achieving desired outcomes.

Ideally, the move to performance-based fees would mitigate this risk by sharing the financial burden with the client. By structuring their fees to be contingent upon the client's success, these firms essentially become stakeholders in the client's business outcomes.

However, due to the scale of the programmes of work, the reality is, for a lot of clients, they have to take on multi-functional teams, in multi-month programmes.

How growth translates to clients
The reality for enterprise scale clients is an often ironic one. A reality where consultancies talk about collaboration, agility and transformative outcomes, where the truth can be more costly, slower, with low quality execution from poorly co-ordinated multi-functional teams that still behave in a hierarchical consultant>client relationship.

And, as for mid-sized clients, many are, at best, under-served or, at worst, completely ignored.

This environment can create a narrative that drives the perception of the industry as a whole, creating a problem for smaller firms that lack the marketing spend to make their voices heard.

However, being a smaller consultancy can provide an advantage, and an opportunity to really connect and grow with the clients that really matter.

Refocusing to reclaim your ground.
Smaller firms have the agility and structure to tackle this opportunity head-on.

They can ensure that outcomes, not service breadth, are central to the core value proposition, by positioning themselves as results providers, knowledge leaders and specialists. This means reframing their offerings into what clients actually want to hear.

And, ironically, this specialisation and narrowing of focus can help with conversions, attracting the clients that really value your services while giving those clients who don’t the opportunity to opt out early on. This also helps in defining your ideal client. By being laser-focussed with your proposition, you have greater clarity on who you can help, what problems you can solve for them, and how.

And, in understanding that, you can better define the ideal client experience, across all touchpoints, from initial query through to final delivery, which, in turn, allows you to refine your marketing spend and focus your sales activity.

Now, you're on the way to improving the effectiveness of your marketing spend and delivering higher ROI while meeting your clients eye-to-eye as peers and partners.

In short, by beginning with a really clear value-based proposition at the start, you can reframe not only how your firm is perceived, but how it performs.

So what does this look like in practice?

1. One central idea, many outcomes. A single focus will help tie all activity together, unify your teams, create momentum, drive synergy between departments and elevate your marketing.
   
   

2. Think about experiences. Every touchpoint matters during relationship building, even buying experiences. Try to understand where along the buyer journey your clients are experiencing friction, and work towards removing them. Show your level of service through every touchpoint, your website, your social channels, your documentation, your ways of working, your meetings.
   
   

3. Get sales in the room. Creating demand is a team sport. Your sales team needs to be bought into the idea and approach. Involve sales early in the planning process, share common objectives, know your key targets and go after them.

It's time to reclaim the narrative around consultancy services, focus on outcomes, communicate value and emerge stronger.

Look inside TheTin
That’s what TheTin does best. Just like our namesake, we locate and preserve the best of your company, and clearly label them for easy consumption.

We work with you to understand your reality, cut through the complexity and turn them into actionable strategies that deliver measurable results.

How we can help

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