Consultant, heal thyself

It was over a decade ago that I first met Rod Aldridge.

By then he was already chairman of Capita but I didn’t recognise him as he
sat unassumingly among a patchy audience at a public sector conference. He
chatted amiably enough but clearly wanted to listen to the presentation ­ I
forget what it was on ­ so I left him to it.

Fast-forward to today and things could hardly be more different. Few
consultancy success stories can match that of Capita’s. From humble beginnings
(it’s hard to believe now that it was once the commercial arm of the smallest of
the UK’s main accountancy institutes), Capita has grown into the eighth biggest
business advisory consultancy in the country, according to our latest league
tables. More than 10% of Capita’s £1.4bn turnover comes from what we classify as
business advisory work.

Aldridge himself has suffered something of an unfortunate fall from grace,
choosing to fall on his own sword after becoming caught up in the recent Labour
loans scandal. As his finance director Gordon Hurst told our sister title
Accountancy Age this month: ‘It’s a shame. He was gutted the way his
personal decision came out’. You can, by the way, read the complete interview
with Hurst on our website,
www.managementconsultancy.co.uk
,this month.

BELOW THE STRATOSPHERE

But while Capita climbs our latest league table, its growth in the business
advisory market probably falls a little short of its ambitions. That’s certainly
the case for the market at large. The industry’s hopes of double-digit growth
failed to materialise in 2005 ­ and even failed to match the rate seen in 2004 ­
although it was still pretty healthy at 9.6%.

In this month’s issue we attempt to get to the bottom of just where the
growth for consultancy is coming from.

The financial services industry continues to perform strongly and spend
heavily on advice. More specifically, it’s the banks that are increasingly
turning to external advisers to help them confront what they once viewed as
business certainties. The public sector, as Aldridge or any of his soon-to-be
former colleagues will tell you, is playing its part too.

And where is the money going? Well, the multinationals may continue to rely
on the tried and tested blue-chip advisers, but elsewhere businesses are
increasingly turning to new players ­ boutique consultancies and, whisper it,
the big accountancy firms whose appetite for advisory contracts is increasing by
the day.

Is there anything that could derail the industry? Plenty. After all,
consultancies are businesses whose fortunes are linked inextricably to the
fortunes of the companies they advise and the industries and the economies in
which they operate. And then there is the small matter of people. Hiring the
right professionals has never been harder.

Can the consultancy industry cope with these challenges? It’s better equipped
than most other industries to do so. If you make your money from helping your
clients surmount their business obstacles, then tackling your own challenges
should really be a piece of cake.