Risks and opportunities of the pandemic for the consulting industry
Kai Anderson, Member of the Mercer | Promerit Executive Board, gives an overview of the industry’s prospects during and after the crisis.
Germany is one of the largest consulting markets worldwide – with an annual growth rate of around 8 percent. Consulting as a success factor for the flexible acquisition of resources and know-how allows for the division of labor and reduction of vertical integration. This network structure is both a strength and a weakness, as the current situation clearly shows.
Onshoring as an opportunity
If a consequence of the corona crisis is foreseeable, then onshoring, i.e. the relocation of parts of the value added (back) to the domestic market.
This is the first good news for the consulting industry – at least for supply chain specialists. Unbundling complex supply chains requires their know-how and will keep manufacturing companies busy for the next two to four years. Further topics will follow, such as substitution and cost optimization.
This brings us to the crisis consulting topic par excellence – restructuring. And that is the second piece of good news for the consulting world. If one thing is certain in a crisis, it is the need to reduce costs, streamline structures and accelerate processes.
Good times, then, for strategy consultants who know this trade. This also applies to the diametrically opposed discipline of M&A consulting. Well-positioned, solvent companies are already identifying less well-positioned takeover candidates. The number of transactions will increase significantly in the coming months, to the delight of consultants and financial institutions specializing in this field.
The wheat separates from the chaff
The same applies to the consulting industry as a whole as to all other industries: In the crisis, winners are made. Now the wheat is being separated from the chaff, what counts now is steadfastness, foresight and the right services and products.
The consulting market will shrink this year and probably also next year. However, some consulting companies will continue to grow against the trend during this period. They will generate added value for their clients that will justify the cost of specialized temporary resources even in difficult times.
The wheat is also being separated from the chaff among company executives: Leadership weaknesses quickly become clearly visible in the crisis. No favourable business development covers up more obvious weaknesses in management. The sometimes very rigid hierarchies of traditional companies in particular will start to move.
This brings us to the last (and not quite “pure”) category of consultants, which should benefit more than average from the crisis. Many personnel consultants are already looking very closely at their portfolios in order to be able to provide their clients with suitable replacements for leadership positions that have been filled incorrectly towards the end of the year.
Don’t let this scare you: every crisis is an opportunity. An opportunity to prove yourself, to make the difference. For your team, for your company and not least for yourself.
You can read the entire article here (in German).