8 Things Top Consulting Firms Do Differently
Each year, Vault.com releases its ranking of the Top Consulting Firms, known as the Vault Consulting 50. This annual ranking asks current consultants to rate their perceptions of industry peers as well as their own firm on various metrics such as prestige, culture, and work-life balance. Major swings occur in rankings from year to year, but as a firm climbs to the very top of the list, the change becomes relatively stable.
Beyond the metrics, several nuances set these elite firms apart from the pack. Other firms can take note of these practices in order to boost their prestige and expand their client reach. We’ve found eight particular things that the best consulting firms do differently from their competitors:
Source:Vault.com
1. Recruiting & Talent
Elite firms attract the most high-profile candidates, such as fresh crops of MBA grads from elite programs. In fact, certain prestigious consulting firms recruit almost exclusively at the top 25 Global MBA programs, with few exceptions.
Not all hires have a background in business, however. Top consulting firms often recruit graduates and PhDs in various other fields, including psychology, engineering, and law. Certainly recruiting the best of the best helps these consulting firms excel at their projects and engagements and remain at the top of the ladder.
2. Compensation
Top consulting firms charge their clients top dollar and are capable of providing their consultants outsized pay packages. At the very highest tier of consultancies, some of the most prestigious firms are capable of paying slightly less for talent because they know that their prestige carries more weight than pay. Slightly less prestigious firms have taken to providing higher compensation than more elite firms in an attempt to lure top talent.
Most consultants from these top firms also enjoy major benefits, including extensive healthcare packages, career counseling, and education. Consistent benefits emphasize the value these firms place in their consultants both inside and outside their operations and projects.
3. Training & Development
Top-tier consulting firms recognize that their consultants are their best asset. These firms hire consultants after already establishing the candidates’ various strengths and weaknesses throughout their interview process. Not content to plateau, however, these firms employ rigorous training for all employees and ensure that the consultants expand their talents and fine-tune their specialties. Not only does this extensive training improve the quality of the work, but it also indicates that the firms truly value their employees.
4. Thought-Leadership
The most prestigious firms do not limit their work to client engagements. In addition to these client-oriented projects, top firms also compile research on various topics. The research generated by top consulting firms is impressive in volume and quality. It serves not only to educate and inform readers, but also to generate leads to expand their client bases. At some firms this thought leadership takes center stage. McKinsey, for example, has created the McKinsey Global Institute and the McKinsey Quarterly to drive thought leadership in the industry.
At many consulting firms, in addition to managing client engagements consultants must contribute to the firm’s intellectual capital in order to get promoted. Thus these larger consulting firms create an environment where information is constantly created and curated.
5. Client Work
Since top firms have firmly established their credibility and prestige, they have the flexibility and advantage to be selective about their client engagements. Elite firms are so highly regarded that they will turn down client work that is less lucrative, non-core, or doesn’t contribute to brand building. By turning down clients who may not support their brand, these firms instead allocate their time to client engagements that build long-term rapport. Many of these firms have committed clients whom they have retained through years of partnership. Successful delivery to these clients allows top firms to justify turning down proposals from unlikely prospects.
6. Global reach
Modern business operates under the expansive umbrella of globalization. Top consulting firms have embraced this reality, allowing them to expand their client base overseas. Many of these firms have extended their reach abroad to every continent. For example, Vault’s top firm Bain & Company currently boasts over 50 offices in over 30 countries, and in second, McKinsey & Company has over 100 offices in over 60 countries.
Obviously, successful expansion abroad requires an understanding of each country’s culture and legal requirements. Despite these hurdles, the top consulting firms have maintained a successful track record as their consultants tackle projects overseas.
In addition to expanding their client bases, global consulting firms have the ability to allocate their consultants globally. A consultant from Berlin could be flown to a project in Washington DC if his specific expertise was required.
7. Knowledge Management
Isaac Newton stated he made his discoveries only “by standing on the shoulders of giants.” While Newton was referring to knowledge shared from great thinkers who came before him, the same principle occurs in the workplace. Knowledge management emphasizes the need for firms to share information between stakeholders in order to expand knowledge, experience, and skills.
Within top consulting firms, consultants emphasize a culture of information sharing and collaboration by uploading sanitized information from past consulting projects into knowledge management platforms. This allows consultants to pull from the database in order to have a more solid understanding of industries and specialties when entering into new engagements.
Knowledge management is key in this high-churn industry because it allows firms to retain knowledge instead of losing it when any key employee leaves the firm. Given the size of these firms, consultants have an expansive amount of data available at their fingertips, giving them a cutting edge when entering into new engagements.
8. Client Discovery
Most firms earn their prestige by impressing their clients with their deliverables. Since most information is collected in the client discovery process, consultants must employ advanced tools and techniques to ensure they gather meaningful insights around the company functions. In many instances, consultants use visual analytics platforms in order to speed up the client discovery process and compile information more efficiently and effectively than traditional means can. This process allows for more data-based decisions and creates more client buy-in.
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Smaller firms with fewer resources and perceived prestige can and do compete with the top consulting firms. Oftentimes, they succeed by mastering a niche in the market, pricing their offerings lower, or a combination of the two. In order to effectively compete with these elite brands, however, smaller firms need to take note of top-tier strategies. For example, smaller firms can build thought leadership by generating content for whitepapers.
Consultants can drive increased efficiency and better insights for their clients using advanced analytics software such as 9Lenses. The 9Lenses platform collects input from an unlimited number of stakeholders. The data then is compiled, analyzed, and quantified in a manner that allows consultants to make the most effective recommendations to their clients. The data confirms qualitative insights and ensures the most effective strategies are followed.
There is little doubt that the strategies the elite firms use have served to build them into the giants they are today. Hopefully, these eight principles will not only give insights into the strategies of these companies, but will also spark ideas around how small consulting firms can flourish.