Top 5 Business Challenges for Management Consulting Firms

1. Attracting and developing new clients.

This concern tops the list at 81%, and it is a key point: while new business is the overriding priority of every industry we studied, it tops the list by a considerably higher percentage for management consulting firms. For comparison, 72% of all professional services firms cite generating new business as their number one challenge.

In the world of management consulting, the need for new business is noted by over three times more respondents than the second-highest challenge. This is a defining concern for firms of all sizes, and the struggle for new clients is likely to shape the future for many firms.

1. Dealing with a difficult economy/competitive marketplace.

The signs of competitive pressure are echoed in the second business challenge, named by just over 25% of respondents in the management consulting industry.

This is an active, increasingly global marketplace. Competition is heating up as multiple international players intensify their efforts. As economic sluggishness prevails in some markets, many firms are looking and will continue to look to others for opportunity.

1. Finding and keeping good people.

A highly competitive marketplace means a highly competitive talent environment as well. The research tells the story clearly. Finding and retaining the best people will be a top agenda for about one in four management consulting firms (24%).

From the standpoint of setting marketing priorities, this is particularly notable. It may mean prioritizing the consideration of a specific audience, potential recruits.

Fighting for the best talent is always a business challenge. But this year, the competition will heat up as the talent war intensifies.

1. Innovation/new ideas.

In addition to its strong focus on generating new business, this was another distinguishing feature for the management consulting industry in our study. Respondents were focused on innovation at a higher rate than in most other industries, with about a quarter of management consultants citing it as a top concern.

SEE ALSO: Top 5 Management Consulting Marketing Priorities

In order to face this challenge, firms will have to find ways to not only generate those new ideas but share them effectively with their audiences. Those audiences will include both prospective clients and industry influencers.

To stay competitive in today’s marketplace, you can’t simply build a reputation on the claim or idea of innovation. Firms must showcase their expertise, thought processes, and results. The winners will be the organizations that show the world how they innovate.

1. Strategy/planning issues.

As we’ve seen, management consulting firms face an array of diverse challenges. Given the urgent need to develop new clients, find and keep quality people, and continuously innovate, it’s not surprising that coordinating all of these activities is a key concern among our respondents (24%).

In order to contend with these many different pressures, organizations will have to identify sophisticated and efficient strategic approaches. They will have to continue to find ways to use time and resources more effectively as they work to counter new competitors and find new clients – all while competition encroaches.

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