Who's afraid of the march of the management consul
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Who's afraid of the march of the management consul

Paul Holmes

This year’s AMEC conference in Dublin was as interesting and informative as usual, but perhaps the most interesting and informative thing about it was the presence of management consulting firm Booz Allen Hamilton, not as a client but as a provider of public relations services. Booz Allen was represented by vice president Grant McLaughlin, a leader in the firm’s “human capital, learning and communications center of excellence,” and principal Chris Foster (the former head of Burson-Marsteller’s US healthcare practice), who presented research the firm had conducted exploring global attitudes to measurement and evaluation, and discussed the disconnect between PR people and the C-suite. McLaughlin and Foster are just two of a staggering 600 consultants at Booz Allen Hamilton who are providing communications counsel to clients. That means that if BAH decided to participate in our global ranking of PR firms, it would be—based on headcount alone—a top 20 firm. Assuming that most of those 600 people are providing high-value, high-margin services, and that BAH therefore has an above industry-average revenue-per-head, it’s conceivable that Booz Allen is a top 10 global PR firm. It is now more than 25 years since I gave my first speech warning PR consultancies of the impending threat of competition from the management consulting world. Back then, I suggested that consulting firms would focus on a handful of choice markets—change management was an obvious one, but public policy, crisis management, and sustainability were others—and essentially skim off the most lucrative and most interesting assignments. I suggested then that consulting firms could hire the smartest young people away from Burson-Marsteller (for example), pay them 20 percent more, and bill them out at double their existing rate—on the theory that a bright consultant could charge twice as much for the same advice simply because of the words McKinsey or Bain or Booz Allen on his or her business card. I am not suggesting that my vision of 25 years ago has come to pass—as far as I can tell, PR agency principals are still more concerned about competition from ad agencies than from management consultancies—but I do think this is a trend that bears watching. These are smart businesses, and they hire smart people, and if they hire enough of them, sooner or later they’re going to become a major factor in the public relations business. And even if they don’t, all the things PR firms need to do to prepare to compete with Booz Allen and McKinsey and others are things they should be doing anyway.
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