Does BCG need to get its hands dirty to beat McKinsey to the digital transformation prize?

Our recent report into digital transformation laid out some compelling reasons why strategy firms should be ideally positioned to win in this market. Clients say they want to use digital transformation to grow their businesses, and to do that, their investment is starting to shift away from using digital to facilitate and accelerate existing business priorities, and towards more fundamental change to their business model. This sort of existential, burning platform-type of issue is exactly what you’d want some of the world’s cleverest people working on; indeed, over half of respondents at the largest companies we surveyed* say they plan to use strategy firms for this type of work.

So, are strategy firms actually cleaning up? Some more than others. We estimate that McKinsey’s share of the digital transformation market is somewhere in the region of 50% larger than The Boston Consulting Group’s (hereafter referred to as BCG). Considering the two firms are often mentioned in the same breath by clients, and, anecdotally, seen as intellectual equals at the most premium end of the consulting market, it does seem strange that one is far bigger than the other.

What could be causing this? Looking at the data we gather from clients in our annual survey of their perceptions of consulting firms, we can see some differences in clients’ minds between the two firms that could be relevant.

Compared with McKinsey, clients tend to speak more positively about BCG’s account management, its culture, and its methodologies. Compared with BCG, McKinsey’s clients tend to speak more positively about its speed of delivery, its responsiveness and flexibility, and, most especially, its ability to implement.

It strikes me that the areas in which BCG is seen to have an advantage are very traditional: These are the sort of things you expect all the leading consulting firms to be pretty good at, regardless of what they’re working on, though it’s impressive that BCG is seen to be ahead of its arch rival in this respect. By contrast, the areas in which McKinsey is seen to have advantage have grown in importance as digital transformation has swept through the consulting market.

Digital is shrinking the size and length of engagements, and it’s raising clients’ expectations about what constitutes an output; the days of the 250 slide PowerPoint deck are fading, while the prototype and proof of concept are quickly becoming king. Strategy firms may be generally reluctant to get their hands dirty in the weeds of implementation, but the market is demanding that they do. Whether implementation is best delivered under the banner of the firm’s main brand or not may be open to debate (though McKinsey’s investment in its McKinsey Implement arm is a clear indication of how it plans to approach the issue); the key is that it has an answer to something clients are clearly demanding.

We’re not convinced the market knows BCG’s answer yet, and we suspect that for BCG’s sake it’s going to need to know fairly soon.

*Those with revenues of over $5bn.

A note on methodology: Every year we survey senior end-users of consulting services, asking them to tell us their perceptions of the world’s leading consulting firms. The data in this blog is based on our survey of 2,682 clients in November and December 2016. We ask each to tell us about three consulting firms of their choosing, giving us 8,046 responses in total. Six hundred and sixty-nine are about McKinsey, while 310 are about The Boston Consulting Group.