Key priorities to unlock professional services growth in 2024.
Despite what felt like a thousand interest rate hikes and 10x more economists’ predictions of a recession, we spent 2023 riding another tech-fueled stock market cocktail party. What will 2024 bring us? A little more market stability? A lot more political uncertainty? Hopefully yes to the former. And, well, probably yes too for the latter.
Regardless what does come, what you can control now is how you prioritize your firm’s resources. Without further ado, these are what I see as the five most pressing priorities for consulting firms in the year ahead:
#1 – Shift from Thinking About to Acting on AI
The explosion of AI is reshaping how a lot of firms and their clients are operating. Beyond buzzwords, AI is proving useful in executing routine tasks … at least, with the right prompts. At Rattleback, we’re leveraging AI in the thought leadership development process in a few limited areas: to help us classify and group topics, to identify conventional wisdom on a topic, to develop ancillary social content, and to occasionally do a light edit of a final content draft. Other firms are using AI to do much more including code development, trend-spotting in data, developing documentation, and testing existing code.
Clients are already harnessing AI for tasks traditionally handled by junior staff. As a result, moving from a cautious “wait and see” approach to a proactive “test and learn” mindset this year is imperative. Pretty much every professional services firm requires a clear POV on how AI can be leveraged to solve the problems your firm is best suited to solve. This is largely because just about every client is thinking about it right now. Offering a perspective on how they should be thinking about it will be critical to client attraction. For a lot of firms this will likely require commissioning some new original primary research.
#2 – STAY PROACTIVE IN Client Acquisition
Sustaining growth this year may feel a little more difficult than it has the last few years. In fact, we’re fully expecting client acquisition in 2024 to look more like it did in the second half of 2023 than it did the 30 months prior. Translation – it may feel a bit more like spinning your tires up a gravel hill in a rear-wheel drive pickup than cruising down an open highway in a red-hot sports car.
Don’t sit and wait for things to get easier as they probably won’t (at least for a little while). Firms need to be very purposeful about the types of clients they work with. Focus on working with clients that allow you to “show up as your best selves.” Get very specific about the problems you’re best able to solve and crystallize strong, thought leadership around those problems. The ability to develop a clear and unique POV on critical issues that deeply matter to clients will be a critical capability now more than ever.
#3 – Diversify Client Acquisition Models
Over-reliance on a single client acquisition channel poses undue risk. Yet, a lot of firms rely too much on a single channel for new business. At Rattleback, we rely heavily on inbound leads via organic search. Other firms rely heavily on referrals or conference presentations.
Regardless of what your firm’s most effective channel is, meeting 2024 revenue growth goals will require diversifying that approach. This is not a luxury; it’s a necessity. That said, simply tacking on new tactics is insufficient; new strategies need to be purposefully aligned with existing ones. Opening up a new acquisition lane requires a long-term commitment, and should not be thought of as a last-minute remedy to a slipping revenue target.
#4 – Embrace the Activator Model for Business Development
Traditional approaches to business development are proving less effective than they once did. For decades, many partners operated under the assumption that close, personal connections led to business relationships. While this was true for decades, the pandemic accelerated a trend toward digital buying that’s shaking the model up for good.
The latest research on business development points to an Activator model as the most effective approach. Activators emphasize building a robust client network (up, down, and across the client organization), proactively educating clients on industry trends, and fostering collaboration (in the firm and with the client). Check out our interview with the co-authors of the study.
In this transformed landscape, a two-pronged model, involving both Experts and Activators, will emerge as the most effective business development approach. Experts play a crucial role in crafting compelling points of view and developing original thinking for the firm. Their work serves as the foundation for client conversations. On the other hand, Activators excel at integrating these perspectives into the broader stream of information reaching clients. By being collaborative and proactive, Activators build relationships across the client organization and help internal leaders build the resolve to move forward.
#5 – Over-Invest in People and Client Relationships
Firms are simultaneously proclaiming large AI investments (uh, $1.4B at EY) while cutting their workforce (whoops, EY laying off 3k US workers). This sounds good on paper, but success in the AI era hinges not just on technology but on having great people who know what to do with the it. Looking ahead, striking a balance between technological acumen and soft skills will be critical to the success of all firms. Now is a great time to over-invest in building the skills of your teams. It’s also a good time to remind ourselves of the most accurate and over-used meme of 2023: “AI won’t take your job. But someone who knows how to use AI will.”
At the same time, as market conditions become a bit tighter, deepening relationships with existing clients shifts from simply being part of the day-to-day ebb and flow of the business to being a critical, strategic imperative. Following the Activator model, firms need to recommit to enhancing relationships across their clients’ organizations. This involves proactively creating value beyond traditional functions and buyers. It may also involve being open to solving new client problems you’ve never solved before or seeking out better ways to ones you’ve solved a thousand times previous.
Look for the best of both worlds. Find ways to invest in your people and your clients at the same time. Your key differentiator in the face of AI-driven disruption may just be …. the human interactions you create. Consider programs like prospect/client roundtables, key client offsites, etc. Look for new and better ways to connect the humans in your firm with the humans at your client organizations.
Recommended First Steps
As we all chart our course for the year ahead, choosing between these priorities may seem heavy. To pick your poison conduct an assessment of your firm’s current state and contrast it with your desired future state 4-5 years hence. Place weight on the initiatives that seem most critical to achieving your most important long-term business priorities. If all else fails, consider your future self. What will “2029 you” thank “2024 you” for prioritizing right now?