The need for greater sustainability is driving many conversations between professional services firms and their clients, but just talking won’t be enough.
Professional services firms were never meant to be high-profile. First appearing almost a hundred years ago, in response to regulatory changes in the aftermath of the Wall Street Crash, the primary purpose of these firms was to advise. Working with senior leaders, they were sounding boards, not executive boards; their mission was to make their clients look better, not themselves. Time and technology have changed that: These firms are now among some of the biggest organisations in the world and have some of the most iconic brands; they regularly top lists of the best places to work. Visibility and responsibility are closely linked. Professional services firms don’t just whisper in their clients’ ears or position themselves behind the powerful thrones. They’ve increasingly taken over responsibility for delivering much of what client organisations used to do for themselves. And, our research shows, they are likely to do so even more in the future—around 41% of clients think their organisations will outsource more work in the next one to two years. Fiercer regulation in some professional fields and larger projects in almost all have exacerbated this: Look at the media attention focus on audit failures, McKinsey’s $547m settlement to settle opioid claims, and so on.
And now there’s a chance to turn all this change into opportunity. Just under a third of clients we’ve surveyed in the last year say that ensuring sustainability in everything they do is, post-crisis, one of their top three priorities. A similar proportion say that greater awareness of risk in all its forms is likely to be one of the most enduring legacies of the pandemic. Around two-thirds of client organisations say they’ll need the support of professional services firms to help them develop, implement, and report on their ESG approach. Professional services firms therefore have a choice: They can sit in their well-appointed home offices waiting for the call from clients, asking for help. Be in no doubt, there’s going to be plenty of money made from doing what they’ve always done: reacting to a client need and providing advice and some level of practical help to resolve it. But this will inevitably cast them as advisors when they could do more. Rather than waiting for the call, they could make it. They could respond to requests for proposals in other areas by proactively including a sustainability element; they could refuse to work with clients who aren’t prepared to include sustainability-related components in every project; they could identify the clients who face the biggest issues in the sustainability space and go to them with a strategy for dealing with them. They could, in short, become advocates of change.
This may challenge some firms’ reluctance to be in the limelight, but it’s actually what clients would like to see more of. In research we completed at the end of last year, 82% of US clients said they expect the consulting firm they work with to have some sort of a commitment to purpose. More importantly, 66% told us that a firm’s sense of purpose should be demonstrated through its core profit-making activities.
Moreover, in making the shift from advice to advocacy, they’ll genuinely make change happen. The financial muscle of the major firms is enormous. Even a fraction of that—deployed to educate clients and to ensure that, as the pandemic (hopefully) recedes, the urgency of fixing some of the underlying, existential problems we face as a species doesn’t disappear as well–could have a material impact on the pace of change.