Will agility help smaller firms survive the COVID-19 crisis?

Since the beginning of the COVID-19 crisis, we have consistently made the case that scale will be one of the key factors in determining whether a firm is likely to survive. Firms with expansive footprints and globally recognisable brands—the types of brands buyers instinctively flock to in a time of crisis—will be, on average, the ones that emerge the other side of this pandemic having sustained the least amount of damage to their overall institutional health.

Sometimes, however, focusing on the overly simplistic, high-level picture can lead us to overlook important elements of nuance, particularly when we try to assess the impact on, and opportunities for, individual firms. There are, of course, certain advantages that smaller firms have over their larger competitors when it comes to responding effectively and efficiently to COVID-19. While many firms may fail to make full use of those advantages, some won’t. And those that do make use of them might just find that they come out of this crisis in a better position, relatively speaking, than even the most resilient of the bigger players.

More specifically, smaller firms generally have one quality often lacking in the lumbering behemoths that dominate the consulting landscape: agility. Large firms—particularly those that are structured as partnerships—have sometimes struggled in the past when forced to make rapid and far-reaching changes within their organisations. Every decision has the possibility to become a tortuous, drawn-out process where input needs to be sought from countless different senior partners spread across any number of countries.

Smaller firms don’t typically have this problem. Without the challenge of having to manage the expectations of dizzying numbers of stakeholders, and free from the burden of complex ownership structures, these firms can implement change at a much faster pace. And in the long history of the industry, there has probably never been a moment where that ability was more in demand. Even now, many months into this pandemic, it can still feel as if the global economic and social landscape is shifting day by day and hour by hour; the constant new developments sometimes mean that strategies signed off on a Friday afternoon are rendered largely obsolete come Monday morning. Smaller firms can take advantage of their structural flexibility to respond to this far more effectively than their larger counterparts can.

A similar story has already played itself out in many other industries. Often, it’s been smaller, privately held companies that have been able to reinvent themselves in response to COVID or pivot into new business models most effectively. For example, BrewDog—a UK-based drinks manufacturer—announced at an early stage of the pandemic that they would be retrofitting their distilleries to produce hand sanitiser instead of beer; within just 14 days, they had become a fully approved NHS supplier. At the same time, larger rivals like Diageo were having to shut down production facilities entirely in order to comply with social distancing requirements. One assumes that they either lacked the singular vision and strong leadership necessary to conceive of a retrofitting scheme like BrewDog’s, or the institutional nimbleness needed to make such a scheme a success.

Small consulting firms probably aren’t going to put their employees to work making hand sanitiser. But they might decide to overhaul their service portfolio, or reconfigure the capabilities that exist within their organisation into wholly new customer propositions. Some may even go so far as to create new business models that simply couldn’t have existed prior to the pandemic.

Ultimately though, smaller firms are still at a disadvantage right now; agility alone just isn’t enough to compensate for all of the benefits of scale possessed by the KPMGs of the world. But it does represent something of a lifeline for these organisations: No matter how bad things get, if you have the ability to reinvent yourself, and do it quickly, you likely have the ability to survive. When we look back on this period in years to come, we will no doubt be praising those firms that put the notion of agility at the heart of their response to COVID-19.