Global consultancies such as Bain & Company, Boston Consulting Group, and McKinsey & Company have all had their share of exposure to recent controversy and scandal. Bain and BCG have both faced allegations for their ties to autocratic rulers and government corruption, and McKinsey was recently the subject of a new book exposing decades of questionable business practices. The new level of scrutiny and publicity has led all three firms to make a close examination of their practices and the future of the industry.
Responses to the revelations have varied, from making public apologies to introducing new layers of governance and whistleblower protections with an eye toward preventing future scandal. In spite of the recent negative publicity, the firms’ influence is far from diminished. In fact, between 2015 and 2020, the combined revenue of all three firms nearly doubled to $24 billion, according to an estimate by industry-watcher Kennedy Research Reports. As businesses struggled to adapt to the “new normal” of the COVID pandemic, it is likely that consulting revenues were boosted even further to a possible combined $30 billion, according to Consultancy.org.
Bain, BCG, and McKinsey have also seen a boost due to the explosion in Environmental, Social, and Governance (ESG) needs, which are seeing accelerated adoption and require highly specific expertise. Business’ efforts to decarbonize, improve diversity, and become better corporate citizens, along with digital transformation and process automation efforts, are responsible for a growing share of consulting revenue, further cementing the firms’ position in the market.
The major firms are beginning to see some threats to their dominance, but none of them are so pressing as to undermine their trajectory. Competition is increasing as the Big Four accounting firms (Deloitte, EY, KPMG, and PwC) consider plans to spin off their consulting arms from their audit practices, ESG is experiencing greater political pushback (especially in the U.S.), and engagements with controversial clients may eventually prove too lucrative to resist as businesses complete their digital transformations.
Despite public scandal and increased government scrutiny, the momentum of the top consulting firms is unlikely to slow down any time soon. With revenues up, demand for specialized advisory services increasing, and recruiting efforts bringing in a steady stream of new talent, major consultancies are poised to continue the upward trend in growth for the foreseeable future. Whether new safeguards put in place will prevent bad behavior from happening again or the firms will simply write off the resulting expenses as the cost of doing business, companies can expect to rely on their advice for years to come.