Why professional services firms don’t win work

We know a lot about why firms win work. Clients need to associate a firm with the type of project they’re looking to commission: This isn’t just about brand permission, but also whether a firm’s price point is reasonable given the work involved. Firms that pass that initial test need to demonstrate that their ability to do the work—their expertise, the way they work, and how they convert that raw expertise into something of use and value to a client—is better than their competitors’.

So, it’s tempting to think that when a firm loses work, it’s because clients think it lacks the skills required and/or they aren’t convinced it will deliver the outcome clients need. But our research shows it’s not that simple.

The major strategy firms make much of their relationships with senior executives, arguing that this makes it easier for them to by-pass procurement teams: They’re right to some extent, but not entirely. One in 10 clients say that when a firm loses, it’s because it doesn’t have as strong a relationship with the client organisation as the firm that won. But the number one reason why any type of firm doesn’t win work they might have been considered for is that they’re not on a clients’ preferred supplier list. In straightened economic times, there is inevitably far more scrutiny of expenditure, but even when a project has been signed off at the top, the length of time it can take to register a firm that’s not already on a client’s preferred supplier list can significantly delay the start of a project. One senior executive we interview recently said:

“It’s just too much hassle…especially if a project is urgent—and most are—we’ll simply go with a firm that can start the next week.”