The Economist asked recently, ‘Have McKinsey and its consulting rivals got too big?’

The Economist asked recently, ‘Have McKinsey and its consulting rivals got too big? (

As a smaller, specialist consulting firm focused on hospitality leisure and business travel, I found this article in The Economist hugely validating for us. I have great admiration for McKinsey and other large consulting firms, and as we’ve grown at PACE, have always had the broader landscape of consulting firms in mind, monitoring their position, offer and business success.

Scale and breadth can mean slower to act

The large consulting firms have always found ways to right-size their business according to market demand, particularly as companies and governments have grappled with rapid innovations (e.g. Ai), geopolitical events (e.g. East-West relations), and inflexion points in longer-term trends (e.g. ESG, Economic growth).

The challenge they have is that these macro changes create short-term opportunities for consulting growth and even shorter ones for profitability. The result is a stagnation of opportunity for larger firms as their client’s understanding of the drivers of macro changes becomes more fluent over time.  The short-term need for insight, data and guidance for bigger firms drops off over time, as the factors driving downside risks and the upside opportunities become more understood and established, or because the fundamentals in the environment change.

“Trying to lead on the back of the biggest macro changes and as a consequence, floating with the tide of opportunity” often distracts the largest consulting firms from building a more sustainable growth and profitability model. Fleet of foot and depth of sector experience delivers more. Very often we are called in directly following an assignment conducted by one of the triumvirates of strategy advisers (Bain, BCG, and McKinsey) to validate and translate their findings into something management can execute.

Experience can still win over youth

Not so for all consulting companies. The major consulting firms often invest in hiring young and very bright analysts, building macro data, generating insight through analysis and innovating methodologies to solve the latest macro-driven changes. This can be useful to provide a company with strategic focus, particularly when the latest macro changes have a direct impact on operating performance. But for many companies who are focused on executing operations well, tackling the micro challenges of direct and indirect competition, and shifting customer needs and behaviour, they look for strategic advice that can be readily applied and management can adopt and adapt to easily.

This often requires deep industry insight, experience, fluency and discipline in executing change. Unlike the largest consulting firms, smaller consulting firms often invest in hiring highly skilled practitioners with a history of success, developing deep industry insight in a particular sector, and focusing on solving fundamental problems that all businesses continually need to solve for decades.

David and Goliath 

I asked a Senior Partner at McKinsey once who he thought his biggest source of competition is, to my surprise, he replied, “your firm.”  He continued to say that, “depth of industry understanding, and practical experience is precisely why some clients chose smaller specialist firms instead of ours.”

PACE Dimensions is a specialised consulting firm that focuses on the travel, leisure, and hospitality sectors, and helps clients improve their performance and competitive edge. Despite being small, we help some of the largest brands, management companies, operators, and investors in the sector.

So David can and does compete with Goliath on a very regular basis. Despite the macro changes, which we continually monitor, it is our honed methodologies, executed many times by team members who have functioned as consultants and practitioners and have built a growing depth of industry understanding that gives us a sustainable and an ever growing competitive edge.

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