The COVID-19 pandemic has left its impact across industries, including the global management consulting industry, which is heavily hit. Recent research reveals that the global management consulting industry could witness a 19% loss in market value, amounting to lost revenue worth $30 billion in 2020. To recover from the impact, consultants are now devising different work opportunities and new business strategies to adapt to the post-pandemic reality.
The consulting industry’s post-pandemic reality
The impending impact of the pandemic on the global economy may provide some interesting opportunities to management consulting firms. However, it is likely that most organizations will try to invest the available resources into current operations that need the most attention, without seeing value in allocating resources to consultants at this time.
For instance, the travel and leisure industry, which is largely impacted, may not be willing to invest in consultants at the moment. On the contrary, the healthcare industry that is experiencing heavy load during the pandemic may be more forthcoming to seek consulting expertise to better handle such future situations.
The impact would also vary across regions. For instance, in Europe, where many countries have been severely affected, consulting assignments are put on hold as compared to regions like Africa and the Middle East that are relatively less impacted by the virus outbreak.
Typically, management consulting firms depend heavily on travel and in-person meetings with clients. They also work on very stringent timelines for their engagements. However, traditional ways of operating will have to align to the post-pandemic reality.
With COVID-19 showing little signs of abating, new and more stringent social distancing and quarantine measures are being put in place by global government and regulatory bodies. This pandemic is globally causing dramatic shifts in customer demand, behavior, and expectations in the consulting management area.
Most consultants usually spend 80% of their working lives away from home, as they travel across the globe to assist their clients with a variety of advisory matters and are more likely to be victims of virus spread. The economic slowdown due to the pandemic has largely impacted consulting firms’ revenues. Projects have also been delayed with their scope reduced or terminated altogether, which have hit revenue.
Reshaping business strategy: four best practices
As businesses adapt to the new post COVID-19 reality, here are some steps management consulting firms can take to realign their business strategies:
#1 Enable better crisis management
Companies that minimize the business impact in the aftermath of COVID-19 would emerge winners. Some businesses may want to deviate from widespread rules and methods to handle the crisis. For instance, companies have had to change their remote work and travel policies as part of their crisis management response to the pandemic.
#2 Embrace agility in inspection and adaptation
The new reality calls for companies to be agile in adapting their business strategies to the changing market and customer needs. Many industries are likely to turn away from globalization and favor a more local approach to drive business growth, including the consulting industry.
#3 Accelerate the pace of digitalization
With many industries switching to remote working with reduced or no travel, consultants, believed to be the pioneers of remote working, have a distinct advantage. They can help clients adapt to the changing needs of work, increasing their adoption of digitalization to boost engagement, and establish a digital-first culture with the clients.
#4 Leverage innovation to revamp strategies
Historically, crises have bred innovation. But the pandemic will change how companies become successful, as they will struggle to get resources to drive innovation in an organic manner. Those that encourage innovative approaches by identifying new opportunities, building a foundation for growth, and acting on those recommendations in the post-crisis environment will thrive.
Unlocking new opportunities for consultants
Although the pandemic has negatively impacted many industries, it can also present consulting firms with opportunities. For instance, clients are seeking the guidance and expertise of consultants to map out future strategies and business scenarios. They are also reaching out to consultants to restructure their operations to become digital-first, ensure business continuity, and build resiliency for any future disruptions. Consultants are aided in these opportunities by technologies, which have brought them closer to their clients.
Similar to 2009 after the global recession, the revenue of consulting firms increased from 2010 onward, with more companies turning to them to reshape their business strategies. Clearly, the next crop of winners will comprise organizations that take the lead now to prepare for the reality that lies ahead.