Bob Cliff's seen a thing or two in his day. Bob is the founder and CEO of Oakland, Calif.-based Cliff Consulting. He founded the firm way back in 1972 and quickly grew it to about 15 billable consultants. And that's pretty much where it is today. Since he's owned and operated a small firm since the days Richard Nixon was president, I think Bob more than qualifies to offer up his perspective on the current state of the small consulting firm. "I suspect that there are more small firms than ever before, and I think they're—well we're—having a bigger impact than we've ever had," Bob told me a few weeks ago. I think Bob's right—they are having a bigger impact. Every time a consultant leaves a legacy firm to either start his own firm or to join the ranks of a smaller firm, the industry sits up and takes notice. With the war for talent still raging, the legacy firms can't afford to have a big crop of smaller firms promising a lot less travel for just a little less pay. But that's what is happening in the industry right now. But why now?
The boom of Smallville in the consulting industry probably can be traced back to a single event—the breakup of Arthur Andersen in 2002. That one event set off a chain reaction that has brought us to where we are today. In a matter of weeks, thousands of consultants were suddenly on the sidelines, figuring out what they wanted to do next. Some were scooped up by other firms—Michael Travis is now president and CEO of Hitachi Consulting—while others circled the wagons, secured some capital and launched their own firms.
Indeed, three of this year's Seven Small Jewels—Cary McMillan's True Partners Consulting, Steve Sestak's MarketSphere Consulting and Venanzio Arquilla and George Hensen's The Claro Group—were founded by ex-Andersen folks. (Cliff Consulting, of course, was not.) And the industry is full of former Andersen consultants now running their own firms. The biggest ex-Andersen success story to date has to be Gary Holdren's Huron Consulting Group, which topped $500 million in revenue in 2007, not bad for a firm that's barely five years old.
Collectively, the 2008 Seven Small Jewels represent the very best of the entrepreneurial spirit in consulting. All firms, of course, say they are heavily focused on their clients and committed to their own people. But the small firms have to be; for them it's a matter of survival.
This year's Seven Small Jewels begins on Page 14. As always, let us know what you think. Consulting magazine welcomes your thoughts and values your feedback.
Editor-in-Chief
jkornik@consultingmag.com
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