Burkhard Schwenker on the future of Strategy Consulting

09 May 2014 Consultancy.uk

An article from Burkhard Schwenker, CEO of Roland Berger Strategy Consultants.

"We have to define what we mean by strategy consulting - this is currently the biggest challenge facing consulting firms. US author Thomas Friedman once said the world is flat, meaning that the same concepts work anywhere in the world. Some people in our industry believe this applies to strategy consulting, too, thus turning it into a commodity and putting it under considerable price pressure. To survive at all, they conclude, a management consultancy needs annual sales of two $2 billion to achieve adequate economies of scale.

I certainly don't believe the world is becoming more homogeneous. On the contrary, local differences are becoming more pronounced. So there's still a need for good advice - and it's not interchangeable. How could it be? The demands placed on corporate management have become a lot tougher in recent years. The business environment is characterized by volatility, uncertainty, complexity and ambiguity, or VUCA for short. So managers need good advice. They need scenarios that consider what the world might look like. They need a strategy that integrates this type of scenario - and an answer to the question of what structure is right for their organization in each particular region. After all, in my view there's not simply one approach you can apply successfully to the whole world.

Strategy Consulting

In addition, many people are reconsidering the issue of growth from a new perspective. In the past, corporate development was driven strongly by growth in the BRICs and emerging markets. Now is the time to once again design profitable business models in highly advanced economies. What's the best way to set up my company to do this? Do I need different strategic approaches for the different markets?

That's what our clients are currently asking us. And we can answer their questions using our know-how. We have decided to remain independent because we believe we can provide better advice in a diverse, VUCA world by ourselves than in association with an audit firm, for instance. Time will tell whether we are right or wrong.

Of course business has changed a lot. Markets are driven by technology. But you don't have to be an IT firm to be able to think strategically and assess the effects of technology. We recently set up a network of experts we can draw on when we want in-depth, client-specific operational expertise. We management consultants are also facing an uncertain future. At times like this, you need well-founded convictions. And we believe that strategy consulting as we do it will still be around tomorrow.

Burkhard Schwenker - Roland Berger

This is also broadly the opinion of Kennedy Research, which forecasts a sales increase of around 8% in our industry over the next few years. That may not seem like much compared with the double-digit growth rates of the 1990s. But since the turn of the century, we have all learned that it's possible to thrive despite lower growth."