It appears that consulting executives and firm leaders are finally—once and for all—moving on from the Great Recession. It's been a long time coming. The wounds were deep, and the scars remain but time marches on. And so does the profession.
Based on the results of our Executive Outlook survey, which measures what firm leaders are forecasting for 2014, it appears the consulting profession feels pretty good about where we are and where we're going. We have come out of the woods and see greener pastures and sunnier skies ahead. At least that's one of the major takeaways of our annual survey, which queried firm leaders about their business this year, and what they're expecting for next year.
There's simply no denying the executive outlook for 2014 is filled with optimism. As part of the survey, we again asked firm leaders about their businesses, including revenue, profits, opportunities and the challenges ahead. Consulting surveyed more than 200 Managing Directors, Partners and Vice Presidents in October and November of 2013.
First, let's compare last year's projections with this year's reality. For the year that just ended, 77 percent of executives said they actually experienced growth, not quite the 80 percent that predicted it, but a solid projection and result, nonetheless.
And 42 percent said that the growth was higher than 10 percent. Again, that number falls short of the 48 percent who predicted double-digit growth last year.
As for forecasting 2014, the numbers are downright rosy. If this survey is any indication of the optimism that abounds this year, then it looks like the profession's in for a fantastic 2014.
A whopping 92 percent of executives are predicting revenue growth for 2014 and 56 percent (up from 48 percent last year) expect that revenue growth to be in excess of 10 percent.
So, the forecasts and projections of top-line growth is significant, but does the anticipated rebound make it all the way to bottom line? It sure does. Some 65 percent of firm leaders reported improvements to their net profits in 2013. In 2014, a staggering 89 percent of firm leaders anticipate net profits will improve, while only 2 percent say they'll be down this year. The other 9 percent say they anticipate no change in net profits.
As part of the survey, we also asked participants to rate how concerned they are about certain internal and external issues. There the survey saw some dramatic shifts year on year.
For instance, pricing pressures and sales cycles were the biggest external issues facing executives last year. This time around, new client business development and client retention top the list. Results that certainly point to a recovery. Internally, the biggest concerns in 2014 are setting new strategic goals/direction, staff morale and voluntary retention. Again, those responses would point to problems more associated with a robust and healthy economy.
In 2013, firm leaders were more concerned with managing utilization rates and meeting compensation expectations. So, the survey is showing significant shifts in what's keeping firm leaders up at night, but those shifts point to good problems—these type of problems leaders have in an economy that's on the upswing.
Meanwhile, when we interviewed consulting firm leaders—24 firm leaders to be exact—about the next 12 months and asked them to give us a pulse check on the profession, every single one responded with optimism, with an occasional caveat or healthy dose of caution thrown in for good measure. In the interviews, executives were a bit more tempered with their optimism than our survey respondents, but still, it's pretty clear firm leaders are feeling pretty good about new prospects in the new year.
This special section is Consulting 's effort to bring some closure to another year, while also setting the stage for what lies ahead in 2014. If we have, indeed, settled into the new normal, firm leaders seem to like it a lot more than previous years. Or perhaps they're just more prepared to deal with the new realities.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.