Planning for Growth in an Uncertain Market – What is your plan?

February 29th, 2012 by Sarah Green Leave a reply »

Dr Amanda Potter wanted to me (Ruth Sweetman) to share a recent podcast by Fiona Czerniawska which looks at planning for growth in an uncertain market. Zircon recognises Fiona’s pointers for growth and that consultancies have to be careful within an uncertain market.

The current turmoil in the financial markets has reinforced a message clients have been trying to communicate for some time, that this remains a challenging market for consulting firms. Until recently, surging demand in the financial services sector, driven by regulation and restructuring, has been offsetting shrinking public sector consulting budgets in most major markets, masking relatively weak demand elsewhere in the private sector. It is now vital to plan for growth in an uncertain market and the following blog explores the benefits and potential dangers of consultancies merging or expanding into new areas in the current climate.

Strategy 1: Specialisation and Innovation

In 2012, specialists will still be able to charge their premium rates even when junior consultants salaries are under threat, therefore the future will be more successful for specialists. Fiona suggested that companies should focus on being experts and having a narrow field of specialism. Growth will come from being seen as a specialist and by bringing world class expertise.

Strategy 2: Diversification

In 2012 clients may expect us to move into new areas. However, Fiona explains that this can be positively dangerous if you are a small to mid-sized firm. The key is not to get too big to fast and lose sight of the core offering. When consultancies reach around 100-200 people, they expand and move into different areas which can lose focus. Source for Consulting have found that it is actually unnecessary to diversity to grow, they have found that the specialist firms with a core offering grow further than diverse ones. For example, within Zircon we are conducting the talent management research with 100 HR Directors to become thought leaders and understand how we need to shape our talent management offering in the future.

Strategy 3: Cross- Selling

In this climate, day by day smaller firms are being absorbed by bigger firms, when this happens there is the opportunity to sell to external as well as internal clients. Consultancies offer many different services and can provide to audit, finance etc. This can be a big source of growth especially if you look at technology firms, as they will do well. If you are a consultancy firm linked to a technology firm, you can leverage that with mixed resources. But it depends how the firm links in to, for example, outsourcing.

Strategy 4: Responding to Globalisation

Over the last 12 months one area that consultancies have been able to grow is in international markets. We expect this to be true in 2012. Clients who are trying to build in different emerging economies will be looking for consultancies to help them do that. One of the big opportunities in 2012 will undoubtedly be to bring that global mindset to bear with clients who are themselves taking their first steps into globalisation.

Strategy 5: Redefining Consulting

How you redefine consulting is going to be a big area in 2012. So you can do what you have always done, or you can look at redefining what it means to be a consultant. Some consultancy firms come up with quite creative ideas as to how they deliver services whether it is offering people a distinct consultancy group, for example Graduates, ring fencing one part of the business, offering different prices, or being able to offer people just the partner time.

Pyramid or diamond shape consultancy firm? They suspect now there will be a call for the hour glass shape, there will be more demand at the top of the pyramid and some demand at the bottom of the pyramid, but the part in the middle will get squeezed. That of course creates its’ own challenges around career development, and how people create consultants in the future. How consultancies respond to that is another potential area of growth, one can say we accept it is happening and we don’t know what to do or you find more creative ways of delivering and configuring consulting services.

In Conclusion

Fiona explains that the key thing is to look closely at your business and to try and work out which of these five options is the most applicable to you, some are mutually exclusive and some will work better than others. The key thing of 2012 is to have some serious consideration into which of these strategies will work. In a very uncertain market next year the one thing that we can be sure about is that we need to have a plan, being able to assume that there is going to be growth won’t be enough to grow in that market. Not everybody will be able to grow, you will only be able to grow by taking market share from somebody else and therefore how are you going to do that?

Going into 2012 without a plan strikes me as being one of the single most dangerous things you can do.

Written by Ruth Sweetman, Trainee Psychologist.

Source: Fiona Czerniawska http://www.sourceforconsulting.com/news/82

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