MSFs and Illusions of Consulting Greatness
I was talking with a colleague recently concerning a theory that has been bandied about for the better part of my 25 years covering consulting – professional service firms that merge multiple and disparate PS businesses into an ultimate “one stop shop.” The goal is that clients, of course, will flock to the Walmart/Amazon/Google of professional services.
Accounting was the concept’s originator, when they launched their consulting practices eons ago. Now we’re seeing this touted across multiple fronts: the Big 4’s emergence in the legal industry; “digital agencies” in advertising; engineering companies extending into cybersecurity. Everybody has services that bleed over into another form of advisory, which then sparks interest in expanding one’s footprint to usurp other providers in that space.
Following this path to its destination, you have a market filled with milquetoast multi-service providers (MSFs). And the competitive landscape has larger players in each segment cannibalizing adjacent providers to stay alive. Reminds me of Charlton Heston’s awful realization at the end of Soylent Green – “Soylent Green is people!!”
The fallacy with “broad and deep” across a wide swath of professional services lies with any particular firm’s capacity to credibly populate both axes. The Big 4 firms come closest to achieving this based on their extensive member-firm networks (breadth) and long-standing connections to financial ledgers that translate directly to business operations and technology (depth). Save for McKinsey and BCG, most other consulting providers opt for depth over breadth to differentiate value.
We evaluate consulting providers along 34 distinct service areas that, admittedly, constitute a slice of a slice of the whole consulting and advisory pie. Our evaluations include broader service firms along with specialists. But by applying our criteria within a narrow service band, we’re assuring that the “best” are just that, irrespective of size.
It’s definitely possible to be big and good in a variety of service areas. But it’s illogical – not impossible, but illogical — to be all-encompassing and great in every service area. After all, would you go to a taxidermist for dental work?
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