Cover Story: Predictions – Pathfinders for the year ahead

As the sound of champagne corks popping and drunken renditions ofd how will EMU, Year 2000 and economic uncertainty affect their progress? Marc Ambasna-Jones talks to some prominent industry figures about their predictions for the way ahead. Auld Lang Syne underscore the sound of a nation at celebration, it’s very easy to look to the new year for renewal and prosperity. However, in the same way as New Year resolutions usually end in tatters, hopes for great things in the new year are usually short-lived.

We asked a number of leading industry figures to predict whether 1999 was going to be a golden year for consultants or a black one. What will the major issues be and are consultants equipped to deal with them? As we enter the final year of the millennium, are we really set to make a new start or making heavy work of closing the book on what has been?

Vic Luck

managing partner EMEA, Pricewaterhouse-Coopers

“The key challenges for the coming year will be to continue to anticipate and respond to increasingly complex client needs. This has to be achieved whilst operating in a fiercely competitive recruitment marketplace.

In spite of global economic uncertainty in 1999, the move toward globalisation will continue and this will drive market demand for board-level strategic advice as well as large-scale implementation work across functional and geographical boundaries.

For both our clients and ourselves, the mantra ‘A company’s most important asset is its people’, has never been as resonant. Companies who seek to successfully globalise their operations must also manage their workforce on this scale. Executive leadership styles are evolving from a ‘command and control’ approach to a style that focuses on a clear purpose, common values and innovation.

To successfully lead their organisations into the 21st century, executives need to instil a vision in their employees and give them the flexibility and autonomy to be able to make this vision a reality. This is key to retaining quality professionals in an environment where there is strong demand and competition for top talent.

Finally, any predictions for 1999 would be incomplete without a reference to the impact of the Euro. EMU is not limited to technical accounting questions or information technology problems. It will affect a wide range of strategic questions – which markets to be in? What prices to charge?

Location of manufacturing? Choice of distribution channels and rationalisation of supplier relationships?

The challenge will be to help our clients realise the long-term opportunities which EMU offers whilst managing the short-term compliance issues.”

Bruce Petter

executive director, Management Consultancies Association

“Thoughts of recession for next year are worrying. But are we talking ourselves into recession? Our members are still reporting healthy growth, quite substantial growth in fact, so what my members are telling me and what I read in the newspapers are not correlating.

There is a serious danger that we can talk down the economy and spread a fear factor. It is amazing considering that management consultancy income should be up by 25 to 30 percent this year. Next year, we are expecting 8 to 10 percent growth, yet people are still talking about recession.

Most management consultants are also reporting staffing problems. They are actively trying to recruit but cannot find the right people in quantity and quality. Some have even suggested that growth has been stifled as a result.

Where are the brightest brains? Perhaps there are not enough? Does this put a finite limit on the number of possible management consultants or does it mean that companies have to look harder and compete more for the better graduates?

There will of course be casualties next year, but these will probably happen anyway despite talk of recession. We won’t see the sort of scenario we experienced in the early ’90s as people have learnt from their mistakes.

There are, of course, things to look forward to as well. For example, I welcomed the announcement in the Queen’s Speech that there will be a Bill on e-commerce next year. It shows that the Government is aware of the importance of e-commerce and, clearly, management consultants have a major role to play. There is a fairly level playing field at the moment in that market and there will be plenty of opportunities.

In other areas there will be no major change. The Euro and Year 2000 issues appear to have been written off slightly but they will continue to be major issues next year. IT is so important to the industry and we will continue to see growth in outsourcing. It should be a good year really.”

Alan Buckle

head of UK consulting, KPMG

“We’re seeing another year of strong growth. There will be no major change in the market and people can say what they like about recession, the market has been strong and healthy this year and will continue to be strong and healthy next year. We’re preoccupied with looking for talent.

The market for hiring people has been better for us than it has been recently and that should continue into the New Year.

Internally, managing growth and sustaining growth will be quite a challenge, especially as new people come on board. We’ve grown about 50 percent year on year for the past three years and see next year as being no different.

Also we have an aggressive programme of integrating our business into a European and international model. This is also going to be a major challenge and we will be spending time on knowledge management systems.

In terms of the business, the Year 2000 issue will trail off next year because if you’re not on top of it now it is probably too late. But it will be the lull before the storm. There will be a second surge if you like when we are in the new Millennium. This will be a kind of backlog effect to patch-up systems.

Obviously Europe will be a major issue next year. It’s not just about Economic and Monetary Union either. Although EMU is very strong for management consultants and it will be important to implement strategies and integrate EMU with the back office, the whole European issue is much wider. The whole challenge of companies moving away from being UK organisations towards being European organisations will be massive. This type of work will accelerate next year and it will be the single biggest thing in dealing with European issues.

We may also see some leaner and meaner management consultancies next year. The talk of recession has encouraged people to sharpen their operations to be ready and robust if we do go into a recession.

In terms of IT we will see a major switch from traditional ERP systems to e-commerce. This will preoccupy management consultants next year and will be an interesting development to follow. It’s an exciting time.”

Octavius Black

director, Smythe Dorwood Lambert

“The key challenge for 1999 is to change the way we change. Organisations have tended to choose consultants, which in essence are like themselves.

But the time has come to wave a fond farewell to the grey suits and say hello to a more diverse and original group of advisors.

Clients are becoming much more sophisticated and this is a trend that will continue next year. As a result, management consultants have to ask themselves how they are going to differentiate from their clients.

It is a big challenge and one that will call for some radical thinking.

The kind of ‘change’ management consultancy programme that has been peddled for too long now will become intellectually moribund. Basically, the change programme hasn’t delivered the benefits in terms of imagination and spontaneity that the client has been looking to achieve.

The real strength of a management consultancy – and this is the big challenge for 1999 – is to effect change for the new world while still creating empowerment and local decision making skills.

Issues such as the Year 2000, e-commerce and EMU are by-products for the industry. The real issues are about people, empowering individuals and coming up with new ideas to enable people to grow within an organisation.

Management consultants have tended to tack themselves onto the issues first, such as the Year 2000, and miss the fundamental reasons behind being a management consultant today. However, it does depend on each business as to which direction is taken. There is no denying that the Year 2000 issue, or EMU or the increase in e-commerce will be good for peddling business and making money.

This will continue but it is also important for long-term gain for management consultants to rediscover the essential ingredients of being management consultants. Next year, it will be even more important for consultants to go into companies and try and release the entrepreneurial hostages and help them prepare for whatever comes along, like EMU, like the Year 2000 and like e-commerce.

It’s all about having fresh ideas and thinking outside of the box. All the rational and data analytical stuff is increasingly what businesses are not looking for.

Like the retail sector, a consultancy which continues to have fresh ideas and approaches to enabling companies achieve their goals will have a fantastic year in 1999. Those that peddle the same old story will catch a nasty cold.

It is hard to predict the future but we have had one of the busiest months ever and our forward book has never been so strong. We are very strict on recruitment and therefore unable to expand at the rate at which our business is dictating, although we have grown by 35 per cent this year.

We are creating a new kind of consultancy and as a result we are recruiting more unorthodox consultants, the kind that may not have made it at other firms because they didn’t play golf or have the right handicap.”

Marc Ambasna-Jones is a freelance journalist.

What do you think will be the major issues next year?


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