Where will 2010 take management consulting?

Well, the New Year has come and theoretically it’s time to look ahead at 2010. But I don’t want to be found dead next to my crystal ball, my face a frozen mask of horror like the victim in some Victorian detective story.

So, how can I tell you what 2010 holds for the consultancy industry? Fortunately, I have in my hands a handy guide to next year, a slim volume called Management Consultancy 2010: The Global Outlook for an Industry in Transition. Of course, it’s from the past, dating from an innocent age when every forward-looking document wasn’t based on the “2020 vision” pun/cliché. In fact I wrote it myself, putting the finishing touches to it on my 40th birthday in 2000, just in time to rush across London and shove it through the publisher’s letter box to meet the deadline.

The reason for all his last-minute haste wasn’t just disorganisation, but the fact that I kept having to rewrite the thing as more and more cogs flew out of a rapidly imploding consultancy industry. By the end of the writing process I was so pessimistic about my predictions standing the test of time that I’d started referring to the project as Management Consultancy: Ten-past-eight this evening.

Nevertheless it’s interesting to look back at what I thought was going to happen, aided by the fact that I probably own the last surviving copy of this opus and can leave out anything really embarrassing.

Like, “In its broadest sense as a combined accountancy and consulting firm, the ‘big N’ formulation would seem to be on its way out.”

How was I to know that they would all come back again? But then I did say that “the unhappiest of the Big Five firms, Arthur Andersen, may be the last to exist on the traditional model” and that Andersen had shed its “staid image” (although I was then referring to its abandonment of formal business dress rather than its handling of the Enron account).

The buzz at the time was about e-business, and I’m glad to see I noted that the “only cloud on the horizon” of the long bull market was the “massive overvaluation of internet shares.” The main threat to consultancies, as I saw it then, was the drain of consultancy talent into e-business startups, creating what I described as “useless e-lumni.” How was I to know that the consultancy industry would go on to destroy huge amounts of its own wealth in the dot com frenzy, only to welcome back with open arms anyone who’d made a cods of their own start-up?

Many perfectly sensible things haven’t happened (yet). I foresaw a massive entry into consultancy from law firms on the back of all that compliance work, also strong plays from insurance companies and actuaries who were “well-positioned to exploit the growing emphasis on the management of risk.” I even wondered if banks might not counter consultancies’ steps into venture capital: “why shouldn’t banks become mega consultancies and take a more active role in ensuring they get their money back?” Again that seems a better idea now than it did then. Instead, private equity became a sort of alternative transformation industry, sadly more concerned with short-term financial engineering than the disciplines of lasting change. Another pretty good idea of mine was that HR consultancies would break out of their niche. “Once companies have wrung every ounce of benefit from their technology operations and supply chain, there will be little to work on but the staff.” Let’s post that one for 2020.

Some things I was sort of right about. I felt the imminent break up of PwC marked “the end of the size matters era of consultancy” and it’s true that this is less of an issue nowadays. But I also doubted whether a global professional services firm could usefully gr