Top 5 Business Challenges for Management Consulting Firms
Anyone in the management consulting industry knows that today’s firms face a host of business challenges, some age-old and some brand new.
The forces driving change are many and various. Disruptive technology, the rise of new business models, and the pressures exerted by intense global competition are transforming the marketplace. At Hinge, we wanted to build a focused understanding of the top issues that are occupying firms – and what that means for the industry at large. So we got down to research.
Diving into the Research
In order to find the answers, the Hinge Research Institute surveyed 801 professional services firms. The study covered a range of firm sizes and industries.
Our respondents discussed not only their business challenges but how they planned to address them, identifying marketing techniques and implementation strategies, as well.
These insights allowed us to understand the current state of both the professional services landscape as a whole and the management consulting industry in particular. Ultimately, we were able to identify both broad trends and industry-specific issues.
In this post, our aim is to examine the business challenges and priorities of management consulting firms. So what are those priorities, and what do they mean for the industry?
The Top Business Challenges
The top five overall business priorities for management consulting firms paint a striking picture of the marketplace today.
Let’s go over these challenges one by one.
1. Attracting and developing new clients.
This concern tops the list at 79%, and it is a key point: while new business is the overriding priority of every industry we studied, it tops the list by a slightly higher percentage for management consulting firms. By comparison, 78% of all professional services firms cite generating new business as their number one challenge.78% of all professional services firms cite generating new business as their number one challenge Click To Tweet
In the world of management consulting, the need for new business was noted by nearly twice as many respondents than the second-highest challenge. This is a defining concern for firms of all sizes, and the struggle for new clients is likely to shape the future for many firms.
2. Attracting top talent/recruiting
A highly competitive marketplace means a highly competitive talent environment, as well. The research tells a clear story. Finding the best people will be a top agenda item for nearly half of management consulting firms (47%).
From the standpoint of setting marketing priorities, this is particularly notable. It may mean prioritizing a specific audience, potential recruits, over others.
Fighting for the best talent is always a business challenge. But this year, the competition will heat up as the talent war intensifies.
3. Effective Use of Technology
43% of respondents report that making the most of technology is a top challenge for their management consulting firm. This is best understood as the struggle to keep up with evolving technological needs and related client expectations.
Technology is being used to automate business functions, increasing efficiencies and streamlining processes. For example, firms that leverage the power of marketing automation and join it to distinctive expert insights have the opportunity to differentiate themselves. This is especially true given that nearly half of management consultants are struggling to use technology effectively.
4. Succession planning/retaining talent
Noted by more than 32% of respondents, this is a trend we’ve been tracking for some time. Generational change and cyclical labor shortages contribute to this challenge. As baby boomers retire, it’s increasingly urgent for firms to secure strong, long-term talent and groom the next wave of leaders.
A firm’s brand plays a crucial role in this process, and part of a firm’s brand is its reputation for employing and cultivating leaders. This sounds simple, but how do you put it into practice?
The answer lies in developing high-visibility experts. Perhaps you have such experts in your firm already — figures widely recognized in the industry for their knowledge and leadership. These high-profile professionals, whom we call Visible Experts®, can boost the perception of your overall brand among both clients and employees.
Visible Experts can be cultivated. Talented individuals that follow a proven path of thought leadership and promotion can begin raising their market visibility within a matter of months. Consider how a Visible Expert® program could help you develop the next generation of leadership — and attract top talent who want to build their reputation over time.
5. Maintaining a positive public image
As we’ve seen, management consulting firms face an array of diverse challenges. Given their urgent need to develop new clients, find and keep quality people, and continuously innovate, it’s not surprising that one in four (24%) cited maintaining a positive external perception as a key challenge. They can’t afford for their public image to suffer.
How do they meet this challenge? The most important thing they can do is pay attention to their brand. It is the single most important factor that influences prospective clients and hires. In addition, they need to communicate clearly how their firms are relevant to their clients — answering the question, “why you and not another firm?”
Turbulent times generate tremendous change, and this is precisely the reality that management consulting firms are facing today. To adapt to rising marketplace pressures, to get ahead and stay there, they will have to adopt an array of marketing techniques. But deep in the forge of adversity lies opportunity — to build resilient and robust brands.
- Discover what today’s most successful professional services firms are doing right in the research summary 2018 High Growth Study.
- Check out Hinge University, the premier place on the Web where professional services go to learn new marketing skills and grow their firms.
- Find out more on becoming a sought-after expert in your industry by downloading a free copy of The Visible Expert®book.
How Hinge Can Help:
Hinge is a global leader in helping professional services firms grow faster and become more profitable. Our research-based strategies are designed to be implemented. In fact, our groundbreaking Visible Firm® program combines strategy, implementation, training and more.
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