Sunday, June 28, 2009
The business activity and demand for consulting services seems to be higher in Europe, judging from the number of meetings with high-level executives at large companies that I have set up here with an agenda for concrete potential engagements. I should mention that our firm focuses purely on the technology sector that is someone different from other industries. When I speak with our U.S. clients at their headquarters, there is a degree of paralysis, sort of a waiting posture: "We are waiting for the economy to get better before we start doing anything significant". The emphasis is on cost-cutting. In Europe, on the other hand, people are less pessimistic and much more interested in talking about investments, especially into marketing activities. Europe has been hit equally hard by the downturn, however, the system here (mainly higher regulation and more extensive social programs) make the economic situation seem less dire. Historically, this has been the case. While in the U.S. the market swings from irrational boom to irrational pessimism, Europe is a bit more constant. The highs aren't as high and the lows aren't as low as they are in the U.S. As a result, European business conditions today seem significantly less desolate. The problem in my specific situation, however, is that most European offices of large American corporations in Europe depend, to a large degree, on American funding. Thus, while they are in the mindset to invest in marketing initiatives to improve their business position, they are being somewhat stifled by their U.S. "parents".
This difference between European and American business mentality and their approach to responding to business cycles makes for an interesting conversation. What is a better approach over time? The U.S., slightly bi-polar one, or the more constant, measured one of the Old World? I must say that I am really enjoying being in Europe right now. It feels a lot less desperate here to talk to clients. Perhaps the U.S. business should learn from Europeans and realize that binge-drinking causes a painful hangover.
Friday, June 12, 2009
I though it beneficial to mention from time to time where the demand for consulting services appears to be. This is purely a reflection of our clients' inquiries but it is an indicator of sorts.
In the course of the past couple of weeks, we had a couple of large clients inquire about the Media and Entertainment sector. The inquiry was for a quick market assessment study (IT spending, major initiatives, trends, etc.). It seems to be one of the healthier sectors out there today. Here is a quick snapshot:
The greatest relative positive difference vs. other industries is in Telecom and network managed services spending and investments into upgrading security environments. Other areas of focus for M&E firms seem to be: defining a long-term strategy for IT risk and compliance, expanding IT business value, CRM implementations, investment into technologies enabling Web 2.0 and VOD, social computing.
Saturday, June 6, 2009
Today, things are different. Even the most prominent consulting firms are curtailing their expenses. But the changes of the last 15 years seem more fundamental. Management consulting seems to have been losing its luster among both the college grads and the clients. Here are some thoughts on this topic:
1.) The "product" has matured. Like any product, management consulting has entered the stage in the life cycle when it's no longer a hot item that everyone wants to buy. It is transforming from a cow to a dog, to use the most famous 2x2 consulting matrix. How are consulting firms responding to this situation?
2.) The customers have matured. The days of awing clients with fancy frameworks and extravagant graphics are over. Clients demand actionable recommendations that are grounded in reality.
3.) Availability of information has increased dramatically. Access to quality data and other information on the internet is much more prevalent than it was even 10 years ago. The value of the "knowledge network" that global consulting houses touted so proudly is no longer so awesome.
4.) Companies use consultants predominately as temp workers, as opposed to gurus determining strategic decisions. It is more cost-efficient for many companies to hire external help for their research and analysis, and focus their resources on core competencies. This is not to say that
So what do we do? How do we adjust? What works and what doesn't work today?
First, I think that the "generalist consultant" model is no longer viable. Consulting firms that want to succeed must offer subject matter expertise, not just visions. This presents a challenge to the traditional consulting model of hiring bright people and throwing them at projects as they come. Specialization is a difficult thing to obtain at large consulting houses that are obsessed with chargeability. On the other hand, boutique firms with deep expertise seem to be doing well, especially if they partner with other firms that fill in the gaps.
Pique Solutions (www.piquesolutions.com), a boutique marketing consulting and global market research firm based in San Francisco, is a good example of this. Pique Solutions assists exclusively large technology vendors in their B2B marketing and market research efforts. Pique has created a vast network of independent subject matter experts who are deployed on projects based on their expertise, not availability. In fact, constantly expanding this network is at core of Pique's business model. Under a traditional consulting model (where all the consultants are in-house), such perfect match of skills with project objectives is nearly impossible, as these companies have to adher to economies of scale and chargeability targets. In addition, Pique partners with several leading data collection and market intel houses to get the exact data that it needs for any given project. This hub-and-spoke model is proving to be extremely effective especially during economic downturns, as it affords providing top-level talent to the clients at very reasonable fees.
I would like to open this discussion to both management consultants and our clients. I look forward to your comments and contributions.