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08/01/2016 Back

Generalization vs. Specialization: The “problem” with diversified consulting services

When hiring consultants, clients look for deep specialist know-how. Clients’ rating of the quality of consulting work is very influenced by whether they see the firm concerned as a specialist. The more specialized a firm is seen to be, the higher the quality of its work is rated («Counting the cost of generalization», sourceforconsulting.com).

The more consulting firms diversify their skills and service portfolio (i.e. are associated with an increasingly wide range of services), clients find it increasingly difficult to distinct their key services and capacities. Inevitably clients’ perception of a firm’s core business and services deteriorates. Also clients will also be likely to be more negative about the quality of the work of a (diversified) consulting firm, believing that the firm is distracted, taking its eye off its core business («Counting the cost of generalization», sourceforconsulting.com).

What’s better: To be a generalist (one stop shop) or a specialist

Consulting firms tend to diversify their services and/ or markets either because they want to launch new services as the foundation for future growth or to expand their services and client base in order to reduce concentration risks. The more numerous or the more detached from the core business these new services are, it is increasingly difficult for outsiders to distinguish the “genuine” market positioning of a consulting firm. If consulting firms diversify it should be done cautiously, i.e. by building new services which are not too far away from the original “DNA” of the firm and which do not conceal the perception of what a consulting firm stands for (i.e. what the core services, markets and clients are which the consulting firm is able to serve).

To be or the become a high-quality multi-specialist (in the eyes of clients) implies that a wider range of services always has to come along with a deep specialist know-how of the newly built competency areas. Clients expect and demand from one stop shops mutually broad and deep expertise (i.e. “true” multi-specialist know-how, in effect) – only then they perceive a consulting firm to be able to deliver value-added (study: Consulting Market Trends 2014, Cardea/ consultingsearcher).

The «true» multi-specialists

There is no such thing as the jack-of-all-trades. Consulting companies that compete in that way end up blurring their distinct positioning, becoming all things to all customers. But also as a multi-specialist it is possible to establish creditability with customers.

However, one (customers or consultants) has always to keep in mind the “core” around which strong new and diversified capabilities are built. McKinsey always will remain a strategy consultant with profound analytical skills and strengths – that is where McKinsey comes from (i.e. is McKinsey’s “heritage”) and what makes up its unique value proposition, although they have widened their range of services to encompass operational and implementation consulting. On the other hand, Accenture (to take another typical example) will never be able to disclaim its technical foundation, although it reaches out for the stars of strategy consulting work.

Quality means focus

Each positioning of a consulting firm is based on a clear focus about the «what» and the «how» of their business and its respective value proposition. This is both true for boutique as well as large, international consulting firms.

When evaluating and selecting consulting firms for your own specific projects it is therefore essential to know and assess the distinct focus and positioning of consulting firms which are potentially apt to deliver the required services and skills.