David A. Fields Consulting Group Small consulting firms offer numerous rationale in order to persuade clients to turn to them rather than one of the well-known consulting behemoths. In truth, most of those reasons don’t hold water.
There are, however, (at least) five arguments that legitimately elevate your consulting firm above your outsized competition.
Before you, your fellow readers and I collectively engage in a rousing game of throwing big firms under the bus, let’s acknowledge our admiration and respect for the consultants in giant, brand-name organizations.
Seriously. They are smart, dedicated, well-trained and generally well-intentioned. And more of them should leave the nest and lead small consulting firms like yours and mine.
While we’re at it, we should also admit that many “benefits” touted by small consulting firms aren’t actually differentiating vs. the large firms.
For instance, while we say we’re very smart and lovely to work with, they’re smart and generally lovely people too.
We’re responsive; their project teams are responsive.
We’re experienced; they’re experienced.
We drink steins of beer at Oktoberfest; they drink kegs of beer at Oktoberfest. (Maybe. I’m not 100% sure about this one.)
So, are there any legitimate reasons a client should eschew large consultancies?
Yes! Let the game begin…
5 Defenses Against Large Consulting Firms
Economies of Scale are Illusory
In a production economy, “economies of scale” were a key driver of success. In today’s knowledge economy bigger doesn’t mean better.
Five hundred mediocre strategists do not have better ideas than a solo strategic genius. They just reach more people with their mediocre ideas.
Plus, large firms are slower to adopt new ideas and best practices than boutique consultancies. It takes far longer to migrate an essential learning or a breakthrough approach to 5,000 consultants than to your team.
The Smartest of the Smart Are in Small Firms
The biggest names in innovative thinking regularly leave the confines of the large firms to form their own groups. Famous examples include Tom Peters and Clayton Christensen.
Other gurus who have reshaped the business environment never joined large consulting companies at all: Peter Drucker, Michael Hammer, and Stephen Covey, to name just a few.
While researching my first book a dozen years ago, I reviewed a year’s worth of Harvard Business Review articles to find out where thought leadership comes from.
Over 70% of the contributors hailed from small, independent consulting firms. Only 18% of the contributors came from big name mega-consultancies.
Maybe an updated repeat of the analysis would show that thought leadership is now dominated by big firms. I doubt it.
Great Talent Isn’t Difficult to Reach
Back in great-grandpa’s time folks depended on human telephone operators to dial for them. “Connect me to Burnsterberry 549 please.”
Thanks to modern technology, you can connect with anyone, anywhere in the world by clicking a link on your laptop or by inadvertently swiping your phone screen. (Oops.) Operators would just be in the way.
Similarly, before the turn of the century, clients would struggle to find the most talented experts in a particular problem. Hence, they relied on big firms to find brainiacs, train them and house them under one brand.
Now a client can locate a specialist consultant anywhere in the world with a quick Google search. Or, they can turn to staffing platforms like Umbrex, Catalant and TopTal or other platforms to quickly, easily locate top-notch talent.
Like old-time telephone operators, big firms are no longer a useful conduit. They’re just in the way.
Customer Conflict
Clients who hire your small consulting firm will probably engage directly with you or, perhaps, another partner-level person at your firm.
Your client’s opinion is the sole determinant of your success on the project and it’s darn clear who the customer is: your client.
Clients who engage a team from a large firm are frequently working with analysts, consultants, managers and perhaps a director or junior partner. All of those people have bosses inside the consulting firm who are totally disconnected from the client.
That disconnected boss inside the large firm determines the consultant’s career trajectory and financial rewards. Hmm, whom does the consultant view as their customer?
Your Defense Against Large Firms
The four “defenses” above were adapted from The Executive’s Guide to Consultants.
In the years since that book and The Irresistible Consultant’s Guide to Winning Clients were written, I’ve encountered quite a few other good defenses. (None of which are lower fees.) But rather than detail them, I’d rather hear your ideas.
Why else should a client choose your firm rather than turning to a giant consulting powerhouse?
Text and images are © 2024 David A. Fields, all rights reserved.
Several reasons: Flexibility and a Burger King mentality ! Have it your way… we can modify and customize our proposal and services quickly, easily with minimal time delay. Direct to source decider. No middle fluff. No one to succeed with you but me!
Outstanding, Alison. The ability to make decisions about client requests and alterations to approach rapidly fits under the umbrella of responsiveness, which is a key driver of client satisfaction.
Great job kicking off the discussion, Alison!
My business model is that of a Fractional Chief Marketing Officer. I work permanently for a client, often for several years, on a part-time basis, typically one day per week. The huge difference between me and a big consulting firm or agency is that I literally become a part of my client’s executive team, and act as a fiduciary with budgetary responsibility and accountability, just as a full-time employee would. A big firm may be trusted, but will always be an outsider.
That’s an interesting perspective, Ken. Good on you for highlighting the upsides and benefits of the fractional model compared to large consultancies. The degree to which a consultant is perceived as part of the family or an essential part of a client’s operations is a worth all consultants’ attention. While many firms aspire to (and achieve) multi-year relationships with clients, I don’t have data on whether the ability to achieve that goal varies by size of firm–it would be fascinating to find out.
Thanks for highlighting the aspects of trust and long-term relationships, Ken!
I have to be careful how I tell people this, but having been at the big firms I know it’s true. The quality of their output depends very much on the Manager they assign to a project, and that factor is unknown until an engagement starts. The Partner doesn’t get very involved, and the junior people are trained to follow the Manager’s lead. Some Managers are excellent, but well under half of them will eventually make the grade to become Partner. So your project’s fate is the ball spinning on the roulette wheel
That’s excellent insight from someone who’s been there, seen that, Steve. Reliability and predictability of project/personnel quality is a distinct advantage of small firms.
I’m glad you shared your perspective from years in the trenches, Steve!
I hear over and over again from clients their frustrations with working with the large consultancies, driven by expensive deliverables that are not pragmatic or easy to implement. ‘Useless’ is the term I have heard more than once, and yet because there are few alternatives they are inevitably rehired, but it does sully the reputation of the consultancies and the common refrain ‘our company does not like to use consultants”
Yes, an unconscionable amount of money is spent on consulting firms whose “deliverables” are quickly forgotten and make no real, practical difference. Virtually every executive has had at least one bad experience with a consulting engagement like that, which is why Trust-building is such a critical part of the consulting business development process.
As a leader of a small firm, you get to decide whether your work is going to be practical, tactical and valuable.
Great job highlighting that difference, Matt!
The defenses noted above are all true but may in fact be irrelevant, depending on who is tasked with hiring the talent. Smaller entities where there will be a single “point person” are more likely to consider using a “boutique” provider, especially when there is i) a niche talent or qualification that the consultant brings to the table, ii) a sense of commitment communicated by the consultant (“we” rather than “you” (the client) and “me” (the consultant).
The flip side to the defenses is when the point person is in a larger organization and is interested in protecting themselves by hiring the large, “brand-name” consulting firm as the low- or no-risk alternative.
I’ve been through the larger firms in my field and bring “big-firm expertise and boutique relationship management” meaning I will always answer the phone, respond to the email, etc. Sure it can make the job more time-intensive, but the client knows they are getting the understanding, insights, and services they need, and who is responsible for meeting those needs.
David, you’re absolutely right that in some cases a prospect is only interested in a boutique or only interested in a brand name firm. Fortunately, neither of those cases require you to talk about the advantages of small vs. big. The decision on whether to only consider one size firm doesn’t generally have a lot to do with the size of the client. As many readers will confirm, small firms are able to win projects from the biggest companies on the planet all the way down to pre-startups.
Your combination of big-firm training and small firm flexibility can serve you very well. Good on you for bringing the best of both worlds together on behalf of your clients, David!