“If you knew a way to become a high-performing consultancy, would you adopt it?” This is the first thing prospects see when they come across my website.
I dedicate a lot of time to sharing my knowledge and the lessons I’ve learned along the way. Much of that content revolves around helping boutique consultancies achieve the ‘high-performing’ status.
However, what is a high-performing consultancy?
I decided to address this question after a call with a prospect a few weeks ago – a founder and managing partner of a boutique consultancy. “Luk, I know you focus on helping consultancies become high-performing, but I think we’re already there. We just need an outside perspective on a new service we plan to launch.”
Sure, no problem. I can do that. I’ve acted as an independent outside party to provide an objective opinion on requests like this dozens of times. It's a piece of cake, I thought.
Boy, was I wrong!
The next step was to set up a discovery process where I would first gain a deeper understanding of what the consultancy does, how it does it, what problems it solves, who it caters to, and what the unique selling points are. This foundational information was crucial for me to be able to advise on the new service launch.
Unfortunately, once I started digging, I discovered that ‘high-performing’ was used interchangeably with ‘overworked’, ‘overextended’, and ‘aggressively yet unsustainably growing’.
None of the criteria that I typically use to determine a consultancy's level of performance were met to qualify it for the ‘high-performing’ status.
That’s why, in this post, I’d like to clarify what I mean by high-performing boutique consultancies and what, in my opinion, doesn’t cut it.
While I've noticed about a dozen characteristics high-performing boutique consultancies share, I can narrow them down to four large categories. Now, this is not based on scientific research or data analysis. Instead, it’s based on my observations working in the trenches of consulting for many years.
Let’s go over these one by one.
The first indicator that signals that a consultancy is an HPBC is how it acquires its clients. Prospects come knocking on their door. This is usually the case because this consultancy has built up a reputation for delivering exceptional results in a specific area for a narrow audience.
As a result, prospects seek the HPBC for its differentiating expertise and crystal clear value proposition: issue-led, outcome-driven, and ICP-based.
This allows the consultancy to achieve the following:
Recommended reading: (Case Study) Replicate the Secret of This Highly Profitable Consultancy
The HPBC never hits 'The Project Wall'—completing one-off, smaller projects requires constantly competing for new clients. Instead, it retains and develops existing clients over an extended period with the help of its strategic service design and key account management at the C-level.
The outcomes of such dedication to client development and retention are typically the following:
Recommended reading: Moving Beyond One-Off Projects in a Boutique Consultancy
I’ve seen such stark differences between HPBCs and average consultancies that I sometimes couldn’t believe they cater to the same audience!
The industry average for gross margins seems to be around 20-30%. HPBCs achieve >50% gross margin. I’ve worked with consultancies with >60-70% gross margins consistently!
HPBCs can achieve such outstanding results because:
Consulting is a people business. People are the main asset and a crucial contributor to success. I found that a strong client value proposition is also a strong employee value proposition. Consultants want to work for businesses that have excellent market reputations, that have prospects coming knocking on their door, and that value each team member's contribution and reward it accordingly.
Consultancies compete in two markets: the client market and the employee market. These two are directly linked. I’ve observed on numerous occasions that when a consultancy struggles in one market, the other one suffers. The inability to recruit top talent will impact the quality of client results. Similarly, the failure to recruit the “ideal” clients and the inability to build a predictable pipeline of work and revenue results in high turnovers, poor reputation among job seekers, and poor recruitment results.
Now that I have covered the foundational elements that make a consultancy high-performing, I’d like to address some common misconceptions about the concept.
Recommended reading: The 12 Characteristics of a High-Performing Boutique Consultancy
Achieving the status of a high-performing boutique consultancy is about more than just impressive revenue growth or a broad range of services. It involves a strategic focus on inbound client acquisition, retaining and developing existing clients, and maintaining high gross margins.
HPBCs create a sustainable and profitable business model by specialising and honing their expertise. They build strong, long-term client relationships, ensure stable revenue streams, and foster a healthy work environment where employees can thrive without being overextended.
This allows consultancies to deliver exceptional value consistently, justifying premium fees and fueling continued growth.
HPBCs don’t struggle recruiting consultants – top talent wants to work for such businesses.
Consultancies that are still chasing clients, struggling to retain them, and operating on thin margins still have a way to go.
It's time to rethink its strategy, redefine its value proposition, and stop playing small with one-off projects at low/average pricing and no chance to develop a repeatable methodology, and instead invest in the expertise, reputation, and visibility.
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