7 Selection Factors to Ensure a Good Fit and Outstanding Results
When it’s time to choose a growth strategy consulting firm, there are seven factors that make sense to consider. They are:
- Is growth strategy an important area of business focus and expertise for the consulting firm?
- Who is the consulting team that you are paying for? How meaningful is their experience with growth strategy?
- Does the proposed work approach align to spend more time and cost on the areas that are most important to you?
- What tools, if any, do they bring to developing the growth strategy?
- How good is the firm at enrolling the leadership team and getting alignment?
- How easy or difficult are they to work with?
- How geographically accessible is their team to your location?
Let’s look at each of these factors in turn, and consider why each is helpful, and how to gather the information needed to evaluate the factor.
Growth Strategy Consulting Selection Factor #1: Business Focus
The first factor to assess is if growth strategy is a business focus area for the consulting firm, and also for the consultants who will work with your team.
A greater focus means more time focused on growth strategy. This translates to a greater ability to bring diverse experiences from a range of other companies and industries to bear on your work.
Diverse experience is more likely to lead to innovative solutions. In comparison, a firm that exclusively focuses on just one industry may tend to reinforce existing industry thinking and duplicate the experience of your management team.
Some data sources for this information include data on service mix from Wimgo as well as the consulting firm’s website and its thought leadership materials. Wimgo methodology for service mix estimate is:
“An analysis of how specialized a company appears to be in a given industry based on an analysis of projects referenced on their website, portfolio, and reviews mentioning projects.”
The question is, how prominent, or not, is growth strategy?
As we’ve examined previously with growth strategy consulting, we refer to the top-tier strategy consulting firms as “MBB,” because their initials are known for strategy. The MBB firms are McKinsey, Bain, and Boston Consulting Group. They all have considerable experience in strategy. The area where growth strategy is found in their practice varies by firm.
McKinsey and Growth Strategy Consulting
While data on the service mix was not found for McKinsey, McKinsey’s website navigation starts with 22 industries and 12 functions. Growth, marketing and sales is a “function” where McKinsey identifies growth strategy literally in the name. Subtopics within the growth, marketing and sales function area include:
- consumer insights & analytics
- customer experience & loyalty
- digital marketing & multichannel
- marketing & brand strategy
- marketing organizations & operations
- pricing & sales
An expert McKinsey alumni estimates that as much as 40% of McKinsey’s work can be considered strategy. She explains,
“ McKinsey generously refers to everything they do as ‘strategy’ and focuses only on issues that are important to the c-suite – who typically are obsessed with profit and revenue growth because that’s how to increase shareholder value, i.e. the reason for being in business in the first place. So a claim that a huge percentage of their work is growth strategy could be justified. Also one needs to separate out profit growth from revenue growth, and I’m guessing that organic revenue growth is what’s captured under the Function tab. But I assume that they’d also include most, if not all, of the Strategy & Corporate Finance work as ‘growth strategy,’ too. And also a lot of the work under M&A. Viewed from that perspective, 40% doesn’t seem too high, actually.”
Since McKinsey is a large firm with an estimated 37,000 employees, offices in 130+ cities, and approximately 2,700 partners (based on applying the ratio from 2,000 reported partners in 2018 with 27,000 employees), there are many experts at McKinsey with focus and specialization in growth, marketing and sales. It stands to reason that these individuals spend most of their time on marketing, sales and growth strategies.
Examples of McKinsey’s experts are geographical partner leaders in the Marketing and Sales practice, including: Greg Kelly, (Global), Brian Gregg (North America), Aimee Kim (Asia), Eric Hazen (Europe co-lead), Dennis Spillecke (Europe co-lead) and Alexander Sukharevsky of Quantum Black.
Bain and Growth Strategy Consulting
In 2019, Bain reported that 24% of their revenue came from strategy work “measured in terms of capability.”
Bain’s 2022 service mix was reported at 18% business strategy by Wimgo. Of course, not all business strategy is growth strategy.
Other Bain services related to growth strategy include market research (25%), market entry (28%) and product launches (8%). The last two areas are other marketing (at an interesting 0%) and other finance (21%). Cumulatively, these total a maximum of 79% of Bain’s services in areas related to growth strategy (i.e., excluding other finance). Bain’s mix is much more market research heavy than the two other leaders considered (BCG and LEK).
In the top navigation bar, Bain’s website has 19 industries (with additional sub industries) and 16 consulting service areas. Scrolling down yields 13 consulting service areas that are not within the digital delivery platform. These are:
- cost transformation
- customer experience
- learning & development
- mergers & acquisitions
- private equity
- sales & marketing
Bain’s featured strategy service leaders are: Dunigan O’Keeffe (global), Nikhil Prasad Ohja (APAC), Asit Goel (Americas), Nicolas Bloch (Brussels), James Allen (London), Jenny Davis-Peccoud (Amsterdam) and Josef Ming (Zurich).
The sales and marketing consulting service area at Bain is further delineated into eight specializations: brand & customer strategy, marketing, product & portfolio management, pricing optimization, B2B go-to-market, consumer sales & ecosystem, customer experience, and sales management.
Boston Consulting Group and Growth Strategy Consulting
Of the three MBB firms, only Boston Consulting Group (BCG) chooses to classify itself with strategy, as “global management consulting: strategy consultants.” BCG has 25,000 employees, offices in 90+ cities and an estimated 1,875 partners (based on applying the ratio from the total reported partners of 1,200 in 2018 with 16,000 employees).
According to Wimgo, BCG’s service mix is dominated by product launches (35%) and other marketing (35%). Business strategy and market research are each 10%, while market entry is 1%. Excluding other finance, 90% of BCG’s service mix is related to growth strategy.
Expertise in 16 industries and 18 capabilities is featured on BCG’s website. While the word “growth” is not used in the capabilities’ area titles, there are several that directly touch on growth including:
- customer insights
- innovation strategy & delivery
- marketing and sales
The BCG website also provides information on their growth strategy background on other pages.
Other Growth Strategy Consulting Firms
In addition to these MBB firms, a number of other firms also are also noted by several sources for growth strategy consulting, including Deloitte, EY, IBM Global Services, KPMG, LEK, Oliver Wyman, and Strategy &/PWC.
This first factor is an “ante”—that is, all consulting firms that you are considering must demonstrate their experience in growth strategy. All of the MBB firms easily clear this requirement. The next factor is more about the team.
Growth Strategy Consulting Selection Factor #2: Consulting Team
As we’ve explored previously, the dominant model of leverage that large consulting firms use means that most of the work is done by less experienced consultants and analysts.
This means that in your project you are paying for much more analyst and consultant time (hours) than experienced partner, principal or manager time.
Fees in the MBB firms are around $500,000 per month for a six person team.
To examine the leverage model, we can look at the ratio of partners to non-partners. According to Management Consulted, McKinsey has 10,000 consultants, BCG has 7,000 and Bain has 4,000. Each of these firms also reports its total employees: McKinsey at 37,000, BCG at 25,000 and Bain at 12,000.
At McKinsey and BCG, the employee-to-partner ratio is around 13 to one, and Bain is at around 12 to one. The data on consultants appears less consistent, with Bain at seven consultants to one partner, McKinsey at four to one and BCG at two to one. As one source put it:
“In terms of staffing, you’ll find that Bain is more analyst heavy than both McKinsey and BCG. On a standard McKinsey or BCG team, there may be only 1 analyst. In contrast, a team from Bain will have 2 analysts and fewer people who are more senior.
“McKinsey, not surprisingly, leads the pack on depth of experience. They’ve been around for the longest, they have the largest number of consulting staff, and their reach is the most extensive. … When they come to the table to pitch to a client, McKinsey can usually point to 10 examples where they’ve done the same job successfully before.
On the other end of the spectrum, Bain relies on its ‘we’ll work hard for you’ mentality to win clients. The firm doesn’t have the decades of experience to draw from like its competitors, but it does have a card up its sleeve. Bain gives a lot more ideas away in the sales process than would McKinsey or BCG, relying heavily on its quantitative prowess and willingness to go the extra mile. A partner at Bain might give away what would normally be the first month of work to a potential client – a tactic that often sways clients in their favor.”
In our experience, most evaluators will focus heavily on the partner’s experience, and perhaps the project director’s experience, to assess the team. Some will also go the next step to ask how much of that senior time will be spent on their engagement.
If a more collaborative growth strategy development process is desired where your management team actively contributes to the recommendations, we suggest selecting a growth strategy consulting firm with a more experienced team that can engage with your leaders.
Growth Strategy Consulting Selection Factor #3: Approach Alignment with Prioritized Objectives and Deliverables
This factor will require more work on the part of you and your team to assess. It will also drive huge value to ensure you get the most value.
To answer this, it’s critical to prioritize the objectives and deliverables that you want to have coming out of the work. If you get the answer that everything is equally important, push back and ask for “A,” “B” and “C” priorities.
The more clarity you have around prioritized objectives and deliverables, the better fit you’re likely to get with the consulting engagement.
Broadly speaking, a strategy consulting engagement might have four phases:
- Phase A: Situation assessment
- Phase B: Growth strategy alternative creation (with or without customers)
- Phase C: Growth strategy selection
- Phase D: Evaluation and vetting of initiatives that deliver the strategy over the next 1, 3 and 5 years.
It’s almost never the case that 25% of your budget will be spent in each phase to total 100%. It’s more often the case that emphasis is placed in different parts of work where more help is needed, or where previous efforts have shown an alignment breakdown.
So, looking at the total budget and timeline for a growth strategy consulting effort, should 5%, 10%, 30%, 50% or 80% of the time be spent on the first phase of situation assessment activities?
Of course, it’s possible to do a quick situation assessment in as little as a week, and that may meet your firm’s needs. Alternatively, the market fact base may be so inadequate and the need for information so great that an investment of six months in a new customer segmentation can be essential. Or your organization may want to build the bench by having your analyst team lead some of the situation assessment, rather than the consultants.
Moving to the second phase, how much time will it take, and when will the growth strategy alternatives be created? Will these activities take up 5%, 10%, 30%, 50% or 80% of the budget? Going back to collaboration, how, if at all, will your leadership team participate in the growth strategy creation?
You can then repeat the thought process as you look at the proposed workplan and the budget that is associated with each phase. It may be the case that there are unnecessary steps that can be eliminated, or that more time should be spent on a particular phase to ensure organizational alignment.
Growth Strategy Consulting Selection Factor #4: Proven Tools
The large MBB firms have a wealth of tools to draw upon for each consulting engagement. A challenge is for the relatively inexperienced analyst and consulting team to find the right tools and apply them.
As the evaluator, it’s possible to assess how integral (or not) proven tools and frameworks are in the proposed work approach. How much of the consulting time and budget is spent to leverage proven approaches?
While things are undoubtedly better today, my experience at Booz Allen in the late 1980s and early 1990s was that we developed a custom solution for each engagement, rarely leveraging tools from prior engagements. This was unproductive and stressful, though we always came to a good solution in the end.
By comparison, my experience at The Cambridge Group was that we had the benefit of a portfolio of proven tools that worked, like Safari and Demand Segmentation. We regularly used these tools to become proficient in them. To the chagrin of some experienced consultants, mastery of the tools took several years. There is a big difference between following a cookbook and mastery. These tools were primary drivers of insight, and often consumed 50% of the total project budget.
Of course, I do not advocate the mindset of “when you only have a hammer, every problem looks like a nail.” If a firm has only one approach with one tool, that can also be a warning flag.
Growth Strategy Consulting Selection Factor #5: Leadership Team Enrollment and Alignment
Approximately 20 years ago at The Cambridge Group, a cable industry client candidly shared that they selected us because they thought we would be the best at working with them to arrive at the growth strategy and recommendations. This “soft” criteria may require digging a bit deeper beyond the written proposal.
Two areas to consider:
- Are there regular points of engagement with the leadership team throughout the work?
- What are the cultural values of the growth strategy consulting firm, and do they align with your firm’s values?
Most likely, you and your team will have a feel for this from the face-to-face conversations that you have with the consulting firm sales team. Another option is when checking the firm’s references, asking about the success of the engagement and team enrollment.
We had leadership in the analytics function of one of the nation’s largest firms tell us, “No outside firm’s models have ever succeeded in our environment.” Needless to say, we recognized that this client team was not open to working collaboratively, and was not a good fit for Insight to Action.
Growth Strategy Consulting Selection Factor #6: Ease of Working Together
This factor will be apparent from all the interactions that you have with the growth strategy consulting firm in the sales process. For instance:
- Do they meet the deadlines that your process sets with quality work?
- Do they take feedback to adapt their approach based on learning more about your organization’s needs, or do they stick with a “cookie cutter” process?
- Do they actively suggest ways to make it easier to work together?
Similar to the team engagement and enrollment, asking about this area may be helpful when checking references.
Growth Strategy Consulting Selection Factor #7: Geographic Access of Team
In a global digital world with access to the best resources available via Zoom and Microsoft Teams, this factor may be considered irrelevant. And perhaps it is irrelevant for companies who function with global teams who almost never meet in person.
We find, however, that it is practical to have a consulting team who can meet in person with your leadership team on a regular basis during the growth strategy consulting engagement. In the United States, we find that clients in California prefer to work with consulting firms in California rather than fly in teams from other states. We’re also seeing a trend towards leadership teams getting together to collaborate on growth strategy in person.
For many clients, local offices and geographic access make a difference. Most likely that’s one reason why McKinsey has offices in over 130 cities.
Choosing the right growth strategy consulting firm for your organization can be just as challenging as the growth strategy project itself. But evaluating consulting firms with these seven decision factors will set your organization up for success and contribute to sustained growth.