The largest management consultancies are facing an existential crisis. While it was once a truism that ‘no one got fired for hiring McKinsey’, now buyers are far more reluctant. The UK Government even made it a manifesto pledge to slash spending on consultants. It has already cut spending by £550m last financial year and aims for total cuts of £1.2bn by 2026.
It is not alone. Corporate clients are also cutting spending on consultants, and as a result, the leading firms are making severe cuts to headcount and spending. Most recently the Big Four – PwC, Deloitte, EY and KPMG – posted 44% fewer jobs for graduates this year compared with 2023.
Yet the consultancy sector is far more than those four plus the Big Three pure play management consultants: McKinsey, Bain and BCG. Just behind them is a large group of challengers – the firms that typically miss out because ‘no one ever got fired for hiring McKinsey’ – and this is a moment of opportunity for them.
At its heart, this is about trust. Consultants have long been seen as oxymoronic expensive cost cutters, but mounting suspicion that much of the work they’re so well paid to deliver is done by AI has further eroded trust. And viral stories, like the recent one about McKinsey getting paid $4m to tell New York City Council that bins are better than no bins, are delivering a profound blow to people’s trust in their competence.
Many of the larger consultancies have responded with superficial changes to their identities. PwC launched a new identity this year and EY rolled out a new tagline and visual identity in 2024. But neither, so far, has shifted how people view the consultancy model.
The issue is that an identity reboot on its own rarely shifts perception. Unless the business itself changes, the new identity risks looking like a fresh coat of paint on the same house. The real opportunity is when brand and business transformation move in lockstep. That’s when the reboot becomes more than cosmetic — it becomes proof of change.
This is hard for the largest firms to do. While the ambition might be there, the reality of driving change through multinational organisations is hard. The challengers in the market will find it far easier to deliver that fundamental brand and business transformation, and so gain the trust of potential clients.
The opportunity is there for the challenger consultancies to move swiftly and become the trusted advisers. It’s not easy to get right. Here’s how they do it.
For decades the leading firms have used their size to win the largest contracts with governments and global corporates. Now is the moment for challenger firms to learn from judo and use that size against their opponents. It is a prime opportunity to be what they aren’t.
Think of the Avis ‘We try harder’ campaign. It made a virtue of the fact Avis was number two in the market. If the leading consultancy firms are losing trust because of a reputation for excessive fees, lack of transparency and a reputation for breezing in and leaving disruption and confusion in their wake, challengers should think about how to present themselves as different to that.
For example, larger consultancies often have a methodology or framework through which they deliver their consultancy services. It’s carefully honed, proprietary and ultimately impersonal. Challenger firms can show how they’re different simply by listening. They can co-create solutions, and offer training and coaching to build capability within client organisations so clients own the solution, not just the invoice.
However, success here will come from more than showing what you are not. You also need to put a stake in the ground, show who you are, why you exist and what you stand for.
Look at how smaller consultancies like Newton and Frontier are leading the way here. But also, Deloitte. Consistently the strongest professional services brand, it has since 2007 positioned itself not around what it does or how it does it, but on the outcomes it achieves with its clients. While others push a methodology, Deloitte highlights the impact it has.
For each firm, it needs to be different. Whatever it is – an ethos, a way of working, a commitment to something other than the fee – clients will be attracted to businesses that offer a clear vision as well as more creative, bespoke and partnership-led business models.
Then there is AI. Much of the conversation in this sector right now is about the impact of AI. The successful consultancies will be those that contextualise innovation in a more human way. While everyone talks about efficiency gains from AI, there is an opportunity for differentiation and brand growth by highlighting partnership, listening, empathy, authenticity and creativity.
This is a moment of upheaval in the consultancy market. The customer base is more questioning than ever before. They’re demanding more transparency, more accountability, more skin in the game from consultancy partners.
As old models fall away, so new ones emerge. We will see more fractional roles, embedding of expert consultants for training, capability building and leadership coaching. Firms will focus on temporary but highly engaged expertise helping organisations through periods of change.
And bigger is no longer better. The major players will soon realise this, and start spinning off more agile, less bureaucratic, niche firms. But for now, there is a rare moment of opportunity for challenger firms to step up. The firms that spot the opportunity and act now will reap the rewards in the years to come.
Tara Cloak is strategy director at creative agency HB.
Image credit: vm via Getty Images
