Two long-established independent consulting firms each credit their focused, and very different, approaches as to why they continue to win work despite the global strategy houses expanding the range of services on offer to clients.

One firm, Partners in Performance, helps clients with strategy, execution and up-skilling client staff in the skills needed to operate without further external help, while another firm, Port Jackson Partners, has steadfastly remained focused on purely independent strategic advice.

Both firms count ASX 50 companies and major privately held firms among their clients.

Playing catch-up

The managing director, Skipp Williamson, feels that the big strategy houses are playing catch-up with their moves into implementation and value-based pricing.

"I would say traditional consulting is just what the word says, 'consult' – i.e. a report or ideas on paper," Ms Williamson, a former McKinsey consultant who founded Partners in Performance in 1996, said.

"Given ideas are already largely existing in the organisation when the consultant arrives, I don't think that is solving the root cause of the problem. Whether you help clients generate ideas or help them to execute, there's still a dependency model which means they have to keep hiring consultants. We're actually trying to solve a far more fundamental problem, which is what is missing in this organisation that you need to bring external help in to help improve, and if you can solve that we have eliminated the consulting industry."

Value-based pricing

Ms Williamson said the firm had used a value-based pricing model for 20 years, where fees were tied to results as opposed to time-based charging. Her firm's first major piece of work, turning around UK Paper, famously delivered the client $100 million in cash with a percentage of the savings going to Partners in Performance. They employ about 500 staff globally with 30 partners and has revenue in the hundreds of millions. 

She added: "Twenty years ago we identified that the need for strategy or ideas was only a very small part of what clients needed, which was when we built our business around helping clients not only execute but helping them to build businesses that were easy to manage and transferring skills on how to manage. The fact that the strategy firms are now aiming to emulate this would suggest our strategy was right."

Independent advice

Port Jackson Partners, a firm founded in 1991 by McKinsey alumni, has remained purely strategy focused.

"To provide great strategy you need two, increasingly rare, capacities to be simultaneously present: experienced rigorous, fact-based thinkers and fierce independence," Byron Pirola, the managing director of Port Jackson Partners, said.

"CEOs and other leaders continue to need independent, insightful advice, but this is becoming harder to find. More and more 'consulting' is becoming process-based services, rather than true insight-based independent advice."

The firm is also based in Sydney and has nine directors, 25 professionals and nine support staff. Dr Pirola, also a McKinsey alumnus, said his firm could be independent in its advice as it did not have other services it was trying to on-sell to clients.

"The great benefit for us in being an Australian-based strategy-only boutique firm is that our advice is unencumbered by inevitable incentives and even pressures to sell other process-based services or products," he said.

"We exist to give independent advice to the CEOs and other leaders on their toughest problems, when they need it most. Sometimes they do need those other services and sometimes they don't. We help them sort that out too but it's always independent of us and clients increasingly value that."

Source: www.afr.com