Consulting is an enormous industry. Depending on who you ask, it's between $250B and $900B globally, of which more than half is management and strategy consulting. In the US, there are nearly a million management consultants. Why do companies large and small keep hiring strategy consultants?
Often, leaders turn to strategy consultancies when they find themselves asking these sorts of questions:
- Am I struggling to execute a long list of identified initiatives and growth opportunities?
- Do I have the time to step back and plan around long-term growth goals?
- Does my team have the bandwidth and skillset for ideating and driving forward key new initiatives?
Strategy consultants have the skillset and cross-industry experience to collaboratively construct strategic plans to achieve challenging objectives, both in the long-term and the short-term. If an organization is having trouble growing revenue, or understanding its customers, a consultant can bring an outside-in, bird's eye view to the situation to help find the right path through the forest.
This article will help you understand how a strategy consultancy provides various benefits to your organization in five major areas.
1. Fill Any Project Skill Gaps
When you hire a strategy consultant, you are bringing various areas of expertise to the table. Often, the reason you’d seek out a consultant is that they have particular expertise in areas where you and your team do not. They are third-party experts that come with actionable knowledge about your industry or your pain points. A consultancy acts as a problem finder in addition to a problem solver. Once they understand your team and processes, they can offer insights into your pain points—including those you might not have even realized existed.
If your business has a new investment opportunity or is modernizing its processes, it’s critical to bring in a specialist. Your in-house employees might not have the hands-on skills to work through a particular project. And instead of hiring a new employee, you can save the budget and time by hiring a consultancy.
They offer a reasonable way to help drive a project forward with specialized skills and promote business growth. A consultant also has the flexibility to work full-time or part-time as you see fit.
If your team has their hands full of important tasks, then a consultancy can bring in the talent and free-time needed to complete a project.
Some modern strategy consulting groups, such as our own group, Gaussian Consulting, specialize in the following skills:
- Strategic market/competitor research
- Growth opportunity identification and assessment
- Financial strategy and tactics, including fundraising
- Strategy planning processes, board-style accountability and advisorship
- Organizational restructuring and efficiencies
- Understanding customers and product discovery processes
- Profit-centric operational process design (and redesign)
- Project management (including tech/product), roadmapping, and internal communication
2. Support Employees With An Extra Pair of Hands
Leaders might already have the ideal in-house person for a growth project have in mind, but they might be too busy with their own work to give it their dedicated attention. Instead of overloading your team or changing their job responsibilities, you can hire a strategy consultant to support or even off-load those tasks.
This way, your organization retains a consultancy that will not become a permanent part of the team. You get years of expertise for as much time as you deem necessary. This fits specific and short-to-medium duration projects better, for example if you want to revamp your market research, than hiring an entirely new employee.
While a strategy consultancy takes on the strategy tasks no one has time for, they also bring in a fresh set of eyes to a company’s long term direction.
3. Provide an External Perspective
Measuring and innovating your company’s ongoing strategies is like climbing a mountain while calculating how tall it is. It’s not easy for most companies to do both at the same time. A consultant acts as the guide in a helicopter; they provide a 360-degree view of the company’s goals and give you clear directions.
Without doing the proper legwork and research, making company-wide decisions can feel like a grey area. You might feel confident about your strategic analysis and know the best course of action, but your instinct can be hard to trust. There could be a range of biases that affect your ability to make a large decision.
The biggest problem that often plagues companies making key decisions is that their existing biases cause them to make a suboptimal choice, or look at the incomplete picture. A consultancy brings a fresh set of eyes, without these biases, enabling them to help you make the best strategic decisions.
“The essence of strategy is choosing what not to do.” (Michael Porter, Professor and Director of the Institute for Strategy and Competitiveness at Harvard Business School)
That’s why companies that hire a strategy consultant gain an independent view of their operational efficiency, and receive advice on how to tackle their inefficiencies. Day-to-day tasks can bog down your objective decision-making process. A consultancy can pull your view back from the minute details to the master plan.
A consultant also provides a safe environment for employees to suggest solutions when they are discussing a project or strategic initiative. A consultancy can give them an unbiased response and help them lay down a framework of their plan for management. Plus, some employees are more comfortable sharing their insights and feelings with a consultant than with their manager.
Your company’s industry, and business needs, will determine what type of consultant will work best.
4. Provide A Cross-Industry Perspective On Best Practices
Another advantage to a strategy consultant is that they may have even experienced your particular pain point before with a different client, and can immediately offer the best approach. They have years of experience in different industries and team sizes, and can explain how they have helped organization’s develop proven successful methods to overcome your problems.
You might have one idea in your head that could fix your organization's biggest strategic issues, or maybe you are trying to figure out how one project can be executed. A consultant can look over the process and comment how several clients of theirs, across multiple industries, had the same complication and then solved it in X, Y, or Z way.
Bringing more solutions to your business processes with cross-industry perspectives is only one other benefit to having a strategy consultant on your team.
5. Ramp Up Quickly (without Quitting)
Once a project starts, nimble strategy consultants are often delivering project objectives after just a few days of "getting smart" about the client. In contrast, hiring an employee to tackle a project faces several time and budget hurdles:
- Challenge 1: Pre-hire: deciding what new employee is needed for this unique strategic project
- Challenge 2: Hiring: posting the job and interviewing candidates thoroughly, before making an offer
- Challenge 3: Onboarding: expensive training and apprenticeship to the new hire, during which they are not yet adding value
- Challenge 4: Time-to-productivity: it can take half a year or more for a new hire to get fully productive
- Challenge 5: Retention: ~30% turnover means you may lose the new hire after just 2-4 years, not long after they've reached full productivity (and that's pre-pandemic)
Benefits to a Strategy Consultant
There’s a reason why so many companies hire strategy consultants, through thick and thin. They offer a flexible resource to help companies make informed decisions about their key strategic initiatives and projects. And they enable you to improve performance and bring innovation to your company by supporting the process while providing an outside perspective.
Countless businesses and departments are in the middle of their own digital transformation, many due to the COVID-19 pandemic. A strategy consultancy can help bridge the gap with companies navigate the best path to growth.
If you have a particular project that needs a team member with years of experience, or if your company-wide strategy approach needs validation, then a strategy consultant might be exactly what you need. An outside perspective can help your company see all of the options available, and leverage any precise skills your team might be lacking.
Does your organization need strategy consulting services, but is unsure where to start looking? Learn how Gaussian solves your company’s strategic challenges.
Photo by Vlado Paunovic.