Almost every client we speak to at the moment talks about transformation. In our most recent data, 52% of clients say that they’re either already making a significant investment in digital transformation or planning to do so in the next 18 months, and 41% say they’ll be investing in target operating model transformation. ESG-related concerns are playing a role here—46% of organisations say they’re still investing heavily in this space—but so, too, is the need reduce costs, with 42% of clients are in the process of restructuring their supply chains. 

Transformation is, of course, nothing new. It’s been the key driver of growth in the consulting industry in the last seven years. Its staying power now, at a time of uncertainty, is a testimony to two things. To more ambitious leadership teams, whose skills have been honed during the pandemic and who are not prepared to see their long-term goals derailed by comparatively short-term issues, such as inflation. And to the widening gap between those goals and the ability of organisations to get things done at scale and speed. 

But transformation is important for another reason: the profound impact it’s having on the competitive landscape. Truly transformational projects are voracious. They involve change across multiple functional areas and eat into conventional consulting services, picking off specific capabilities and reconfiguring them to deal with new, often unexpected challenges. This means that clients are looking for firms with a broad range of services. They want firms, as one client memorably explained to us, to be like public libraries, stocked with millions of books on different subjects, all of which can be accessed quickly and easily. A hybrid working world has made this a reality: The fact that it’s possible for clients to chat promptly to a specific expert—to pick up the book they want to read, in effect—is the main reason why they don’t want a return to pre-pandemic consulting. But transformation also raises the bar, challenging the assumption that if a firm isn’t a master of a small number of trades, then it’s a jack of all of them and a master of none.  

“The fact that it’s possible for clients to chat promptly to a specific expert—to pick up the book they want to read, in effect—is the main reason why they don’t want a return to pre-pandemic consulting.”

Generally, when we interview clients, three firms come up unprompted most often: Accenture, Deloitte, and McKinsey (we’ve labelled them super-competitors). McKinsey is probably a special case. Despite decades of quiet diversification, it still represents the model for a certain type of consulting work that’s focused on board-level problem solving. But why Accenture and Deloitte? There will be many reasons, but the one that stands out in our research is that both firms are more likely than any other to be rated #1 or #2 in a wide range of services. Other firms may come top sometimes, but none does so as consistently as these two. This suggests that both firms are getting closer to breaking the industry’s self-imposed mould to be seen as masters of all trades, not just some.  

Data based on client surveys conducted in 12 markets from January to July 2022. In total, 1222 clients were surveyed.

Let’s pause there for a second. Perceptions and reality are always different, but perceptions have a huge impact on how clients buy consulting services. Some years ago, carrying out a client feedback project for a strategy firm, we kept hearing that said firm was brilliant at everything: “There’s nothing they can’t do,” said one client. Yet later in the interview, some of those clients referred to times when they’d had problems with the firm, especially around quality of staff. So they weren’t brilliant at everything—no firm could be—but they were brilliant at enough things enough of the time to create the impression among their clients that they could indeed do everything. In other words, there’s a tipping point here: When a firm reaches the point where more than 85% (that’s a working hypothesis) of their clients think they do high– or very high-quality work, then the clients start to assume that the firm excels everywhere.  

Because of the range of capabilities potentially required by a transformation project, a firm that is assumed to be brilliant at everything is more likely to be chosen by clients for transformation work. Accenture and Deloitte are on most clients’ shortlists because they’re perceived to be good at everything. And this creates a virtuous cycle for these firms. The reason why they keep coming up in our interviews is that, once they’re on almost every shortlist, the amount and range of opportunities they can convert into work increases. They then have more chances to broaden their ranges of skills and can use this newfound expertise to be considered for more work in the future.  

It’s a virtuous circle that other firms need to get on to, too.