2014 has proven a record breaking year for Simon-Kucher & Partners. The consultancy’s revenue grew yet again with double digits, to €172 million, making it one of the most remarkable growth stories in the global consulting industry. Compared to a decade ago, the strategy and sales & marketing specialist has more than tripled in size.
With 760 employees working across 29 offices in 22 countries, Simon-Kucher & Partners is one of the largest global consulting firms that focuses purely on commercial excellence. In recent years the firm has structurally outperformed the market, steaming ahead against the prevailing tide. Ten years ago the Germany-based consultancy – Simon-Kucher & Partners was founded in 1985 in Bonn* – had a revenue of €53 million, and since it has despite the backdrop of the crisis years more than tripled in size to the current €172 million. “Not all industry players can claim such great results," says Georg Tacke, who together with Klaus Hilleke leads the firm as co-CEO.
The success of the firm is according to Tacke based on a number of factors, highlighting “good decisions and a pinch of luck” as the most noteworthy aspects. “Since our founding we have concentrated on what we know we're good at. Pricing! Nevertheless, no one could predict at the time, that our core area of expertise would become so important to the market. This ‘luck’ played into our hands”. What started off as a niche market has nowadays grown into a multi-billion dollar industry, with sales and marketing executives across the globe actively trying to boost their bottom line results through among others profitability management, pricing optimisation and commercial excellence – all areas for which Simon-Kucher has an established track record. In for instance 2007, 2011 and 2014 the firm was named the best Sales, Marketing and Pricing advisory in the DACH region (ahead of rivals as BCG and McKinsey), a feat that has bolstered its reputation, testimony of its now structural presence in Europe’s ranking of most prestigious management consulting firms.
Yet as in all cases, in the light of fierce competition a growing market is by no means a guarantee for success. In Simon-Kucher’s case, the firm has consistently remained close to its DNA and heritage, and for analysts within the industry the decision to remain faithful to the original corporate strategy is regarded as one of the key differentiators that now sets the firm apart. In the past decade or so, several massive factors have impacted the consulting industry – such as globalisation, competition, the rise of freelancers, democratisation of knowledge, digitisation and more – bringing consultancies with a ambiguous positioning into dangerous waters. For many with no distinct and differentiated offering – either in terms of global reach, breadth and depth of service offerings or approach – the crisis years even meant the end of the line. Not only the case for the small and those ‘stuck in the middle’, even illustrious firms found themselves living on a thin line (e.g. Roland Berger**) while others even collapsed, such as Monitor (acquired by Deloitte) and LECG.
“Over the years, we have remained true to our original positioning and have resisted the temptation to branch out into other areas of consulting. Only by maintaining such a clear focus is it possible to get a place at the table with the best in the world”, acknowledges Tacke. Combined with a focussed strategy, Simon-Kucher was also relatively early in pursuing international expansion. Eleven years after its establishment the consultancy opened its first foreign office in Boston, Massachusetts (USA), and following the opening of twenty five other offices outside its home base, the firm currently boasts a truly international footprint. Today, the firm generates approximately 45% of its revenues in the DACH countries, and the rest from its global operations. Looking back at 2014, Tacke says he is “pleased with the firm's business development”. Key growth areas were the banking, health and consumer goods/retail industries, which performed “significantly” better than the average.
Asked for the future, Tacke unveils that the firm’s management team has agreed bold plans. In the coming five years the business advisory aims at doubling its current business, to €400 million by 2020. To do so, the consultancy plans to accelerate its international expansion strategy, and further capitalise on major developments. According to Tacke, the firm is well placed to take advantage of the potential in the marketplace. “Basically all of the major current trends such as big data, cloud technology, Industry 4.0, Internet of Things, etc. play to our strengths”, he states, confidently adding: “Generally speaking, such developments lead to fundamental changes in business models. Companies must ask themselves: How am I going to make money and stay competitive in the future? And exactly this is our home turf. Nobody knows better than we do how to answer their questions."
With a partner team of 73 in place – recently Simon-Kucher added four new partners in North America and four in Europe – Tacke is convinced the firm has the right management in place, capable of advancing the consultancy to the next stage of its growth trajectory. In the coming months the first steps of the ambitious plan will set the stage, including the opening of a new office in Stockholm and a recruitment drive aimed at hiring 200 new employees, of which 120 outside of Germany. With solid financials, a recovering global economy and a service portfolio that increasingly hits the sweet spot of executives, in the year when it celebrates its 30th anniversary, Tacke and Hilleke may have wished for no brighter outlook.
* Simon-Kucher & Partners was founded by Hermann Simon, Eckhard Kucher and Karl-Heinz Sebastian. In 2009 Simon stepped down as CEO of the firm, he currently serves as Chairman of the firm.
** In 2010 Roland Berger was on the brink of being acquired by Deloitte Consulting, a last minute capital injection of €80 million by Roland Berger himself and the partner team meant the deal fell through on the last day. In 2013 the firm once again went through a strategic reorientation process, and despite receiving bids from all of the Big Four, of which EY came the closest to a deal, the strategy consultancy decided to remain independent. The firm has since reorganised and re-optimised its footprint, and has set its sight towards an ambitious growth strategy.