The transformational impact felt throughout the marketplace in the past year defies debate. It’s beyond being a different ballpark; it’s arguably a different game altogether.
In the midst of so much uncertainty and unpredictability, however, some professional services firms not only managed to survive -- they were able to excel. Several standouts grew more than three times as fast as their peers, posting enviable profits and defying the prevailing belief that settling for stability should replace expectations of success. The performance of these curve-breakers begs a couple of questions:
The performance of these curve-breakers begs a couple of questions:
- What did they do differently as the market reeled in response to the pandemic?
- What are they continuing to do as recovery gains momentum, and we watch the landscape take on its new appearance?
Findings from the 2021 Hinge High Growth Study: Consulting Firm Edition, reveal compelling findings about how consulting firms have adapted and adjusted operations in light of an unpredictable marketplace.
- Unpredictability jumped to the top of the list of business challenges being anticipated by firms in 2021, climbing more than ten percent over last year, to 48.9 percent.
- Changes in how buyers purchase services, also jumped appreciably over last year to 47.1 percent.
- Increased competition from new firms, held relatively steady up just .3 percent from 2019 to 42 percent, while the need for new skills dropped to the fourth.
Other key findings from the study show a big uptick in marketing budgets, which jumped by 43 percent compared to previous years. That’s a clear indication that marketing investment is filling a gap caused by the disruption of conferences and similar on-site and face-to-face outreach strategies. Similarly, findings show that social media usage among successful firms has soared as a means to amplify thought leadership and drive networking.
The Hallmarks of High Growth Consultancies
Companies that post a growth rate of 20 percent or higher over three years qualify as high growth. In this year’s study, 27 percent of the consulting firms met that mark, down from 2019’s mark of 39 percent. Still, those firms grew at an impressive 32.8 percent median rate, especially noteworthy when compared to average firms, which added revenue at 10.8 percent, and the no-growth group, which dropped by almost 9 percent. As confirmed by the study, high growth companies are, understandably, more likely to be highly profitable -- a convincing demonstration that companies can focus on both growth and profitability.
Until recently, high growth firms had marketing budgets comparable to slower growing firms. Today, high growth firms invest 6 percentage points more in marketing than their no growth peers. High growth companies are also shown to prioritize contending with increased competition from new rivals and addressing the need for top talent, while no-growth counterparts focus on marketplace unpredictability, the need for new skills, and remote workforce management. High growth consultancies are also much more likely to conduct research on their target audience. Close to 40 percent of high growth consultancies made that a priority compared to less than 27 percent for the no-growth firms.
Speaking of Growth
Anyone interested in a more detailed examination of the study’s findings should attend the upcoming roundtable featuring Hinge’s Kelly J. Waffle, Deltek's Kimberly Sack and HR Green's Ellen Swanson. They will discuss key findings from the 2021 Hinge High Growth Study, and reveal what those firms are doing differently as opposed to slow-growth competitors.
How High Growth Firms Grow When Others Don't
Industry Roundtable, Thursday, March 4th
- Agile Consulting
- Deltek Insight
- Financial Management Consulting
- Growth and Profitability
- Industry Trends Consulting
- KPIs and Benchmarking
- Management and IT Consulting
- Management Consulting
- Organization and Culture
- Project Management Consulting
- Reporting and Business Intelligence
- Resource Planning Consulting
- Talent Management Consulting
- Technology for Consulting Firms