How smaller consulting firms can compete with the Big Three

Boutique firms generally can’t beat McKinsey, Bain, and BCG (MBB) on scale, networks, or reputation. But they can outflank the MBB firms by delivering services the major strategy players can’t or don’t offer, according to a recent Forbes article from strategy expert Christian Stadler.

Stadler, who teaches strategy at the Warwick School of Business in England, notes that the MBB firms dominate the field of strategy consulting because of several advantages. They have a strong alumni network from which to source contracts, with many industry executives starting their careers at the Big Three. They can also bank on reputation, enabling executive clients to say they’ve called in the “best” – and most expensive – consulting experts. The Big Three also invest heavily in idea generation, reinforcing their brand as thought leaders through bestselling business books and frequent articles in the Harvard Business Review.

Boutique firms, however, can still compete with the big strategy firms on avenues other than “lower fees.”

One way, according to Stadler, is to be laser-focused on a particular area of expertise. For example, German firm Consus Clinicmanagement specializes in advising hospitals; three of its partners have practiced as doctors and the fourth was an executive in Europe’s largest hospital group. With 70 industry specialists, the firm also offers the sort of scale that even the MBB firms may struggle to match in the German market.

Outside of industry focus, boutique firms can zoom in on a particular topic, Stadler says. D-fine, an analytics specialist, has a 900-strong team where 90% of its consultants have a background in sciences such as physics, math, or IT. Hakluyt, a British firm, is headed by a team of former Mi6 intelligence officers. The market intelligence consultancy uses networks and relationships – rather than, presumably, corporate espionage – to gather information on what corporate rivals are thinking.

Smaller firms can also offer a more intimate, collaborative approach that uses boots-on-the-ground senior experts. MBB firms will usually staff client sites with green MBA graduates, while partners are usually occupied with finding new projects and client management. According to Stadler, large strategy firms will deliver a solution rather than working it out with the client – though those solutions are often excellent and delivered rapidly.

For clients that prefer being in charge of the whole process, a boutique firm could be a better fit. In smaller consultancies, the partners will spend most of their time on client engagements, working alongside senior executives for months at a time and functioning as their “sounding board.”

Another avenue, Stadler says, is to potentially pursue a technology-heavy approach. Though strategy consulting is more resistant to digital disruption than other industries, some companies are pioneering a digital approach. Strategyzer, for example, has developed online tools that help clients build their own business model. While smaller firms might pick such virtual assistants, it isn’t currently upending the traditional consulting approach. However, such technology might improve and expand in the future.

“McKinsey, BCG, and Bain are great at what they do so trying to beat them at their own game is almost foolish,” Stadler said. “Success will come through positions that are deliberately distinct.”