The consulting industry is not immune to the crisis. Businesses are tightening their budgets, prioritising near-term cashflow and cancelling expensive projects, especially those focused on revenue and growth. Consulting firms are taking a hit. According to research done by Consultancy.org, the global consulting industry could lose up to $30 billion in revenue in 2020.
The good news are that consulting firms tend to be highly adaptive by nature, have demonstrated their resilience and flexibility in previous crises, and industry experts expect a fast recovery after the crisis.
Once we are back to “normal”, large businesses are likely to require a lot of support in cost cutting, supply chain redesign and restructuring. Private equity firms will be “hunting” for bargains among the thousands of distressed businesses, and public sector organisations, many of which were “caught with their pants down”, will need help in preparing for the next wave of COVID-19 or the next pandemic.
One crisis example to learn from is the Russian default in 1998. Bain and BCG have left Moscow during the crisis, while McKinsey stayed and captured the post-crisis recovery work and clients. Bain and BCG returned since, but had to discount heavily to get any business. They will not repeat the same mistake.