Phoebe Hennell, one of our summer analysts at Evolution Partners, looked into the uniqueness of boutique consultancies and our model in particular. She explains why many multinational firms are opting for boutique consultancies and offers extensive insight into how you can go about choosing the right one.
What is a boutique consulting firm?
Before we dive into the various benefits of boutique consultancies, it’s important to understand what a boutique actually is. The French word ‘boutique’ entered the English language in the 1960s and meant ‘a small store that sold stylish clothing, jewellery, magnets or other luxury goods’. I wish I could share screenshots of all the consultants at Evolution Partners tuning into Wednesday’s Global meetings wearing Parisian designer chic, but I’m afraid we are another variant of boutique. We are new and small, and wear joggers when working from home but we certainly fit the ‘luxury’ bill, minus the price tag. A boutique consultancy is typically a group of 5-20 specialists who pool their expertise to form an independent syndicate. While established global consultancies can be useful for achieving transformational change, engaging a boutique firm provides even more advantages which we will look at below. The days of the prestigious big firms monopolising the consultancy market are drawing to a close, and larger firms have good reason to worry about the rise of boutiques. One study showed that in terms of growing competition, management consulting firms fear boutiques the most – and 45% reported already losing business to boutiques.
What makes small, new, and local boutique firms so attractive to major multinational firms?
Small means bespoke and personalised
Unlike larger consultancies, whose framework requires a consistently standardised service, boutiques have the freedom and flexibility to tailor their services to a client’s specific needs. Free from the corporate chain, they can spread their wings to be more flexible and agile. Especially if they are new, they are not constrained by concrete processes and procedures. Their client list is small and selective, so they will not prioritise the needs of some clients over others, and your email is unlikely to get lost in the mix. The result is a more personalised service which revolves around the client’s needs instead of the consultancy’s.
What you buy is what you get
The person who sells you the service will likely be the one who will actually walk into your office the following Monday. In boutiques, consultants are often responsible for their own sales pipeline, unlike at larger firms which have a separate sales team. This means greater transparency with what you are buying so you can have more faith in the results.
Local entails relevancy
There's something about buying fruit from a local greengrocer that makes it taste sweeter than from a supermarket. The same goes for boutiques over larger firms: you’re directly supporting the local economic ecosystem. Whilst Evolution Partners has rapidly scaled up an international presence, we remain embedded in our local markets because we understand that it’s crucial to know the environments in which our clients operate in.
You’ll be hiring a specialist with practical expertise
The consulting market is large, varied and expansive, with a global worth of $250 billion. An edge of boutiques is having market focus, allowing consultants to deep dive into their niche. This contrasts with larger firms where consultants might rotate around multiple departments before they settle for their favourite. Hiring a generalist, overlooking a syndicate of specialists, is like asking a GP to perform open-heart surgery. A boutique in this instance is comparable to a small circle of veteran cardiologists with a proven track record of success in exactly the surgery you need. The consultants approach each case afresh and individually, without treating them with a cookie cutter but still benefiting from years of expertise.
Consultants effectively run the business themselves
Unlike at bigger firms, every individual has a real say in the direction of a boutique. It feels more like their own business and as a result, they are more aware of all areas of the business including recruitment and marketing to accounting and management – the partners themselves get hands-on rather than hiring additional administrative staff. The company culture is often more like a start-up. Every member is listened to and valued for the unique entrepreneurial skills they bring to the table. They do not speak merely from textbooks, but from first-hand experience. And this brings us to the next point…
Consultants are more passionate about their firm
Being a key driver – rather than a cog in a machine – team members are highly invested in the firm’s success. When it succeeds, they feel more fulfilled in the knowledge that their personal contribution made a tangible impact. You can trust that the very consultant who delivered results to you will be more rewarded for the revenue that they generated, with a greater pay-out ratio than larger firms. When they believe in what they are doing, their enthusiasm translates into results for their clients.
Strong, long-term relationships are built
Consultants often join boutiques with a long-term plan: they want to grow with the firm, are usually more experienced, and the pathway to partnership or ownership is clearer. They do not simply use the boutique as a training ground before bidding farewell to pursue other projects: their clients are their projects.
Boutiques are like a village community – everyone always pokes their head over the garden fence to offer help. This means that you can benefit from a web of expertise from every ‘villager’. If you switch consultants project-to-project, you can trust that the handover will be thorough. Everyone in the office should know your name and face, and the broad picture of your project. The bond formed with clients is unparalleled, and these clients are never forgotten. This means that the client receives a far more personalised service, and they feel more special because they are more special.
Consultants get superior exposure
A study showed that boutique strategy consultancies open doors to 20% more industries. This is partly down to the higher fees charged by larger firms, which skyrocket as the firm grows because of the additions of other departments. The exposure happens internally too. Consultants get to work alongside the Senior Management Team which gives them great opportunity to contribute above and beyond: they get to make things happen. Decision-making usually reserved only for the top 1% is influenced by the more junior team members. Feedback is always taken into consideration, and it is not a shout into the dark because they have the autonomy to implement change.
The bottom line – lower cost without compromising quality
As a traditional consulting firm grows, so does the gap between the base and the peak of the pyramid (and not always in the interest of the client). It becomes more bureaucratic, with far greater overhead costs. If the pyramid is inverted – as it is at Evolution Partners – then the Partners deliver as well as sell. At a boutique, there is no need for an office manager, for example, and co-working spaces are often utilised. This establishes a more client-centric business with a minimalist cost model. Overhead costs are lower for the following reasons:
- Outsourcing of business functions externally
- Lower turnover means more stability
- Smaller retainer fees
- No minimum threshold for billable hours
Choosing the right boutique consultancy for you
Given how highly saturated consultancy markets are, especially in places like Hong Kong, it can be tricky to find the right fit for your firm. Choosing the right boutique can be the difference between months of miraculous improvement and months of undoing your hard work. The qualities below are high up on the list of things to consider:
The right expertise
Boutiques rarely spread themselves thin, but instead have a niche that they know inside out. This could be by industry, or by project type (i.e. digital transformation). This expertise comes from experience, so it is crucial to find out your consultant’s background. Ask the right questions: where have they done a similar project before, and how did the client benefit?
The right values
Sharing the same values is a key indicator that two organisations will work together synergistically. This ranges from their approach to their clients, the community they operate in, the environment, and their consultants. Do they support and invest in local charities and social enterprises through pro bono work? Do they minimise their carbon footprint? Do they nurture a supportive culture to encourage their consultants’ development? Do their clients’ interests come before their own, and how transparent are they?
The right Senior Management Team
Due to the small nature of a boutique, you will have the opportunity to be acquainted with the Senior Management Team. This means you can verify that the way they work from the ground up aligns with your vision for your own firm. They might even be the one working on your project!
The right price point
One of the biggest mistakes clients make is paying a large premium purely for brand. Make sure you get quotes from a variety of firms and know what your money is getting spent on. Due to the lower running costs of a boutique, a higher proportion of the price is spent directly on the consultant who is helping you, without any hidden costs.
They put you first and trust the process
The right consultancy will not only drive your business forward, but nurture confidence and improvement in you as a professional, making it less likely that you’ll need consultancy moving forward. Evolution Partners was established because the traditional consulting model is set up to deliver greater benefits to the firm as opposed to its clients. Our belief is that clients come first and if they are successful, we in turn will be successful too. We aim to be the lowest-cost provider in the sector, keeping our overheads low and ensuring all savings are passed on to our clients.