I help the owners of boutique consulting firms scale the equity value of those firms. As a Professor of Consulting, I've spent 23 years studying 'what works' when it comes to scaling mid-market professional service firms and applying this to helping de-risk the growth journey of hundreds of firms.

I have joined forces with several other experts on the growth, scaling and sale of consulting firms in order to launch Equity Sherpa, a strategy consultancy dedicated to identifying and enabling the levers of equity growth for professional service firms.

Outside of Equity Sherpa, I'm a (part-time) Professor of Consulting at Cardiff University and have published several award-winning books and journal articles on the consulting industry.

www.equitysherpa.com

I'm suspicious of any boutique with more than 27% EBITDA.

Prof. Joe O'Mahoney

Joe helpings founders and partners successfully grow their consultancies. He is a Professor of Consulting at Cardiff University and NED or Advisory Board Member at several fast-growth firms.

Joe has published his award-winning research on the consulting industry with several of the world's top business journals. He has published three books, two with Oxford University Press, and one with Routledge. 

Joe has worked as a senior corporate consultant, a Head of internal consultancy, and a solo consultant. He has spent 20 years advising and coaching consultancies about growth, several of whom have sold their firms. 

Joe has also provided consultancy for many of the large firms, including McKinsey & Co., IBM, Deloitte and Bain & Co, and trained and coached over 2000 consulting executives and MBA students. He has delivered projects for all the major consulting institutes, including the MCA, ICMCI, IMCUSA and Institute of Consulting.

https://joeomahoney.com/

Maximising the Equity Value of Consulting Firms I M&A and Growth Expert I Board Advisor

Picture sent to me by my developer when I asked why my site was so slow.

It reminded me of some firms that “scaled” by bolting things on. A new system here, a half-baked service there, a pricing haircut there. Maybe even a couple of aquisitions.

It works, until it doesn’t – then one big client win or senior departure trips the fuse and everything starts to smoke. Often these firms are the ones that grow and then shrink.

Most boutiques grow by improvisation: spreadsheets as systems, point solutions for CRM and resourcing, policies living in people’s heads. Whilst it works at £1–2m, it makes it harder to scale because complexity compounds faster than revenue. You feel it in rework, slow decisions, patchy data and evenings spent stitching reports together.

The time to design a scalable firm is before it feels urgent: a simple, integrated tech stack; clear governance and delegated authority; consistent delivery processes; a basic operating rhythm with proper management information. Unsexy, but it turns a fragile tangle into a platform that can handle growth and, eventually, a clean exit.

One of the consultancies I'm currently helping is in CX, but (as ever!) I've been learning off them too. Has your boutique yet mapped out its Client Experience touch points to ensure they generate maximum value?


1. Understand Your Client's Journey: First, map out the journey a client takes when interacting with your firm. Use tools like the "Customer Journey Map" to visualize this process and identify all points of client engagement.

2. Identify Client Needs and Expectations: Client needs vary. Conduct client interviews, surveys, or use feedback from past engagements to understand what clients expect from your services. Remember, your goal is to exceed these expectations.

3. Define the new Journey: Define what an excellent client experience looks like at each stage of the journey. For example, in the proposal stage, a good client experience might involve clear, customized proposals delivered promptly. During project execution, frequent updates and transparent communication might be key elements.

4. Implement Standards where needed: you'll need to establish standards and processes such as communication guidelines, service level agreements (SLAs), client onboarding procedures, and other processes. 

5. Leverage Technology: CRM systems, RPA, project management tools, and communication platforms can automate a great experience. 

6. Measure and Improve: Measure the effectiveness of your client experience plan using appropriate metrics, such as Net Promoter Score (NPS), Customer Satisfaction (CSAT), or Client Effort Score (CES). Collect feedback regularly and use it to continuously improve your CX plan.

7. Employee Training and Culture: The client experience is largely dependent on the behaviour and attitudes of your staff. Make sure your team understands the importance of client experience and is trained to deliver it. 

8. Integrate: Integrate your CX journey with your referral, testimonial and business development processes. Aim to be a trusted advisor rather than just a service provider.

Remember, creating a great client experience is not a one-time effort but a continuous process. It's about creating a culture that puts the client at the centre of everything your firm does.

#boutiques #managementconsulting #professionalservicefirms

I asked my Boutique Leaders' Club for their experiences using third-party lead generators. 13 CEOs answered, and their (combined) responses were as follows:

A common sentiment was that these agencies often fall short of demonstrating the depth of expertise needed to sell consultancy services, particularly to high-level, C-suite executives. 

Consultancies inherently sell expertise, and it's challenging for third parties to replicate that level of knowledge and credibility. Several CEOs noted that direct interactions with their potential clients were far more effective, leveraging their consultants' skills and knowledge to open doors and secure projects.

The cold approach, a common method of these agencies, was generally deemed ineffective. Despite being delivered with sophistication and adequate briefing, cold-calling and email marketing failed to resonate with the client base, especially for those consultancies targeting C-suite buyers. 

The value proposition offered by a consultancy is typically discovered through networks or word of mouth, paths that outsourced agencies can't easily navigate.

In terms of leads, several CEOs observed that their most productive sources were not outsourced agencies but direct email marketing through a well-managed CRM system, word-of-mouth, referrals, competitive tenders, and developing their own solutions to problems. 

The benefits of having an organized, in-house system for managing customer relationships were also emphasized, with one CEO noting a significant 400% growth in five years after implementing such a strategy.

However, the picture was not universally bleak. The experience with outsourced agencies varied based on the individual assigned to the task, with the specific skill set and experience playing a crucial role in achieving success. 

When the right person was involved, even outsourced efforts could generate valuable leads that could convert to clients. This speaks to the variability in the quality of service that these agencies can offer, suggesting a 'hit or miss' experience.

The key takeaway seems to be that while outsourced agencies may have a small role in expanding contact bases and generating leads, the unique nature of consultancy services often necessitates a more direct, personal, and knowledgeable approach to sales. 

In-house sales teams or experienced Business Development professionals were frequently cited as superior alternatives, with some CEOs even stating they wouldn't outsource this task again. 

This serves as a cautionary tale for consultancies considering similar outsourced services and underscores the value of leveraging in-house expertise for business growth. 

#businessdevelopment #consultingsales #salesforconsultants #B2Bconsulting

Anthropic just ran a fascinating experiment: they let their model, Claude, interview 1,250 professionals about how AI is changing their work. Not a survey. Actual structured conversations, at scale.

Whatever you think about AI, that methodology should make professional service firms (and Universities!) sit up. Qualitative research is no longer constrained by human interview capacity. For consulting, law, accountancy and other PSFs, you can:

- Interview every employee in a 500-person firm about culture, burnout, or AI fears – in a week.

- Run deep-dive “client interview programmes” with dozens of stakeholders, not just the safe five the sponsor suggests.

- Ask alumni, candidates, associates and partners the same set of probing questions, and compare patterns across groups.

AI interviewers won’t replace good consultants. But they do change the economics of listening. If your firm sells “insight”, the ability to generate richer, more representative qualitative data is strategically important.

But there are some awkward questions too. Before we all plug an “AI interviewer” into our next org review or client feedback project, there are tensions to acknowledge:

Bias is still there: Human interviewers have biases; AI models do too. If you use the outputs to influence hiring, promotion or performance decisions, you inherit the model’s blind spots as well as your own.

Trust is part of the product: In a lot of PSF work, the interview isn’t just about data collection. It’s part of how you build relationships, spot politics, read the room. Hand too much of that over to a bot and you risk losing signal that never shows up in the transcript.

De-skilling is real: If juniors never learn how to conduct difficult, open-ended conversations because “the AI does the interviews”, you weaken one of the core human skills the firm is supposed to develop.

So what should firms actually do? My take:

- Use AI interviews as an amplifier, not a substitute: Let the model do first-pass interviews to map themes and hotspots. Then send experienced consultants into the areas that look politically or emotionally charged.

- Be transparent: Tell people when they’re talking to an AI system, what will happen to the data, and how it will (and won’t) be used.

- Keep humans in charge of meaning: The value isn’t the raw transcript. It’s the synthesis, interpretation and story you build around it - I personally wouldn't trust AI with that - at least initially.

What becomes possible in a firm that can listen this widely, this cheaply, and this often?


https://lnkd.in/ePuTVkMn

PS - IMHO, Dave Bayless has a better solution to this than Anthropic's!

"If the purpose of  a company is to create a customer, the responsibility for this can't rest with marketing". 

Matt Davies ⚡️just gave an OUTSTANDING talk about brand strategy for consultancies to Marketing Directors in the The Consultancy Leaders Club.

❓ Isn't it interesting that good boutiques spend so much time defining a niche value proposition, but when it comes to their brand, it's often SO vanilla and safe?

But if boutiques want to distinguish themselves from the Big4 and the other behemoths, why would we stick with the boring images and values?

A few firms that I think have cracked the brand leadership are Project One, Elixirr, Visku, and Curtins.

If clients are putting pricing pressure on you, it's sometimes a good idea to ask for 3x the money.

Let me explain. With many clients, there is a natural tendency to cut consulting costs. This is usually due to a failure of their mindset. They don't realise that for every £Z spent, they receive 4 x £Z in value.

Whether this is your fault or their fault, we can leave for another time.

However, cost-cutting by clients will usually mean that you end up delivering less and less value. This is your point to step back and see the bigger picture: what is the big end goal for them?

You should explore that end goal and its value and go back to the client with an investment case for you to achieve that goal for a specific cost in a specific time-box. 

Otherwise clients will either get someone else in who can achieve that goal OR begin seeing you as a cost rather than a benefit.

It pays to be a disruptive small consultancy. Are you doing anything different?

Large consultancies, try as they might, just can't resist the dark suit and tie. When they Deloitte tries baseball caps, or EY tries a song (Oh happy day/Oh happy day/When Ernst & Young/Showed me a better way) they look as cool as a Tory in a power pose.

More seriously, when the behemoths buy innovative consultancies (something I've advised on), 90% of the time after the earn-out, the acquisition slowly morphs into the borg, and the cool kids leave.

Yet clients are crying out for innovation (ranked top in their unmet needs). The suit and tie of McKinseyites is there because it matched the CXO-suite of yesteryear. Now, it only does so partially. This means there is a huge chunk of clients that don't 'fit' with the large corporates and are prepared to look elsewhere. This is one reason why small consultancies are growing at 4 times the rate of large ones.

My point? Be brave, be different! Those consultancies I've interviewed and helped who have been most innovative and bold in their culture and brand are those that have been the most successful. If you want some examples, look at Corporate Rebels, Elixirr, NewtonX, HUMANTIFIC.

#managementconsulting #innovation

I'm currently helping some partners boost their account development skills. Here's my favourite stats from various research sources about the consulting sales process:

B2B Sellers that seek to educate clients are 30% more successful
71% of clients want to hear from advisors earlier
65% of clients are ignorant of their current consultancies’ offerings
85% of clients’ service wish-list were already available from current providers
Clients are 40% more likely to provide a referral with a personal request
72% of clients didn’t refer consultants because they hadn’t been asked 

#businessdevelopment #managementconsulting

“Everyone has the right to travel at their own speed.”

I didn't mean to do a PhD. I was suffering with depression pretty badly during my degree and Masters , and thought a funded PhD place would give me time to recover. I never thought I'd finish it, but believed it would provide respite.

I was certainly not a natural academic. As someone who has dyslexia, I found reading pretty hard (not to mention boring), and I struggled with many of the ideas. 

At the time, my University was ranked the top in the world for business PhDs, and so I was also surrounded by very bright, hard-working, studious types, which I very much wasn't.

I was planning on leaving, but one morning came into my office to see this lovely card from my office mate, Bitten Brigham. I decided to stay, and realised there's different routes to whatever we define success as. 

I kept the card for 29 years, and found it recently whilst moving office. 

So what?

- kindness can have huge consequences that no-one realises at the time
- there's different routes to achieving whatever you define as success
- everyone has the right to go at their own speed!

Thanks Bitten :)

Keynote Speaker & Trainer, Visualization & Graphics Geek, Sales & Marcom Expert, Solution Architect, Proposal Nerd

🥴NOT good... Director of Procurement at one of (the) world's largest employers: "In six years, I've had maybe two proposals that quantified value for me. Obviously, I bought from both of them. And then the other companies complain to me that I bought on price. It's the only useful number you put in your entire proposal. What the hell else was I supposed to buy on?"

This is from 2017. Did solution providers get better? 🤔

Your People Are Your Worst Asset. 
 
"Our people are our greatest asset" is a phrase regurgitated by consultancies (and other firms) across the globe. Whilst it’s a jolly (if trite) marketing slogan for recruits, actually believing and acting on this can do your firm serious damage.

Great people are the lifeblood of a start-up. During the growth (working out what you do) phase of a firm, you need entrepreneurs with creativity, energy and vision. These will help the firm find its niche, establish its clients, and deliver great – if varied – work.
 
However, in order to move from the growth to the scaling phase, you should move away from relying on these people and actively move towards systems and processes that can generate the forms of talent that deliver value in your company. 

If your cornerstone can, metaphorically, pack its bags and depart, how robust is your building?
 
Indeed, whilst even a scaling firm needs to still innovate and explore, too many entrepreneurial ‘geniuses’ will actively harm your firm. At a senior level, they will discourage and deflate those who are trying to do the firm’s bread and butter word. 

At a junior level, they will create inconsistent delivery, too diverse service offerings, and reduce the margins that are delivered by consistent systems. 

These types also tend to demand the types of work, higher salaries and fast-track promotions that not all boutiques can afford.
 
Michael Gerber’s "E-Myth," offers a strong critique of over-dependence on key personnel. If you're fortunate to have a prodigious talent who performs at 150% of her peers, often you don’t feel the need to constrain that person with systems, templates and processes which might even reduce her productivity.
 
However, in the long term, what you are doing is becoming dependent on that person, failing to turn the knowledge and experience of that person into an organisational asset, and giving them the ability to hold your firm hostage in future.

If we agree that relying too much on individuals can be a mistake, the smart move is to focus on the systems that develop and manage these talents. 

Recruitment, training, promotion, and company culture are the foundation. When set up right, these systems consistently bring in and develop the right people, ensuring stability, predictability, and growth.

Compared to individual employees, systems don't quit or ask for raises. Their performance isn't based on daily feelings or personal issues. They're the backbone of a business that's built to last.

Star employees are great, don’t get me wrong. There will always be great performers and weak performers. However, contrary to what McKinsey & Co. promoted in The War for Talent, a scaling firm should not seek to give these individuals free rein in the firm. 

Instead, we should focus on getting them to help us build systems and IP that will allow others to emulate them. 

#ScalingConsultancies #OrganisationalDesign #ConsultingLeadership

Utilisation targets get talked about as if there’s a “right” number. There isn’t. It depends entirely on the kind of consulting firm you’re running and the kind of work you actually do.

Here’s how I think about it:

Process-based firms: Repeatable work, clear steps, stable demand.
  👉 Utilisation is critical – it’s how you make money.
  👉 When the pipeline allows, I’d expect **85–90%** as the norm.

Experience-based firms: The client’s problem is new to them, but very familiar to you.
  👉 Utilisation still matters, but it has to share space with business development, IP development and client relationship management.
  👉 For most, 75–80% is a sensible target.

Brains-based firms: The problem is new to both client and firm.
  👉 If you over-push utilisation here, you slowly kill the thing clients actually pay for: thinking time.
  👉 It’s still part of the mix, but alongside research, IP development and training. Again, 75–80% is often about right.

I do know a few smaller firms that run without formal utilisation targets. It can work up to a point. But I’ve never seen it scale much beyond ~90 people. Once you reach that size, you lose sight of where time (and therefore cost) is going unless you have some kind of target and tracking in place.

Two important notes:

1. Utilisation is a management tool, not a whip. I don’t think it should usually be used to drive billing (“we must hit 80%, so let’s pad the timesheets”), but to manage people, allocate time sensibly, and keep a handle on costs.

2. Why is important! Your system must be capable of understanding and classifying why utilisation is low: is it because the pipeline has dipped and there's not enough chargable work, or is it because of poor management, unmotivated / untrained workers, or poor communication ?


#managementconsulting #utilisation

If you don't delegate, you will become a firm full of bottlenecks that prevent growth. If you don't create the conditions for delegation, your delegation will result in poor quality work, stressed staff, and rework by senior management.

- create IP and training to guide quality work
- Change middle management mindsets about quality assurance and delegation
- Hire an HR expert to create a competence map for your firm
- have consistent performance KPIs and rewards to motivate junior development 

#managementconsulting #consultinggrowth #scalingleadership #talentdevelopment

Dave Bayless very kindly joined our AI Leaders Club to share his experiences with Jeff Linkenbach in building better chatbots to support senior experts rather than juniors.

Really insightful. There's a maturity curve to chatbots which is something like:

1. The Generalist: Mechanism: Direct interaction with a foundational model 
2. The Persona: Custom instructions + "System Prompts" (e.g., GPTs, Gems).
3. The Analyst: Direct file uploads or copy-pasting text into the context window + System prompts
4. The Librarian: Vector stores (embeddings) and semantic search.
5. The Agent: Function calling and API integrations to do things.

Key lesson from Dave: Experiment to learn and make sure you include true domain experts on the journey

thanks so much for your time Dave Bayless. Really interesting and insightful!

Intelligent automation to unlock human potential

Learning about generative AI—its capabilities as well as its limitations—is too important to delegate to technical specialists.

Earlier today, I had the privilege of speaking with members of Prof. Joe O'Mahoney's Consulting Leaders Club about my experiences working with my friend and client, Jeff Linkenbach, developing "Paxorus," a special-purpose, high-fidelity agentic chatbot. Together, we've gone down the rabbit hole and learned a fair bit.

In preparing for the conversation with Joe's group, I realized how fortunate I have been as the "tech guy" to have collaboratively experimented and learned with Jeff, who possesses deep domain knowledge. His expertise equips him with a level of discernment that has proved absolutely critical to driving and recognizing performance improvements. 

Absent the chance to work closely with Jeff on this ongoing project, the quality of the output of the Paxorus system would have flatlined. With his continuous and informed input, we've moved beyond "pretty good" toward the excellence that Jeff's work requires.

Experiment to learn and make sure you include true domain experts on the journey.

Elon's 6's rules of productivity would destroy academia. To be clear, I'm not saying that's a bad thing......

1) Avoid large meetings
Large meetings waste valuable time and energy. Don’t schedule large meetings unless you’re certain they provide value to everyone.

2) Leave a meeting if you’re not contributing. It’s not rude to leave a meeting. But it’s rude to waste people’s time.

3) Forget the chain of command. Communicate with colleagues directly.
Not through supervisors or managers.

4) Be clear, not clever. Avoid nonsense words and technical jargon.
It slows down communication.

5) Ditch frequent meetings. There’s no better way to waste everyone’s time. Once you resolve the issue, frequent meetings are no longer necessary.

6) Use common sense. If a company rule doesn’t (i) Make sense (ii) Contribute to progress (iii) Apply to your specific situation, then avoid following the rule with your eyes closed. 

#consultinginsights #consultingleaders #consultingfounders #thoughtleadership

Stop pretending growth is a straight line

Private equity and strategic buyers love “steady, predictable growth”. In the real world, consulting growth is lumpy—and that’s normal. Why? Because the investments that get you to the next stage (people, IP, systems) slow you down before they speed you up.

And lately, macro shocks (COVID, Ukraine, mini-Budget, US politics) have made S-curves bumpier and less about neat firm lifecycles. Plan accordingly.

How I balance growth vs. investment with boutiques:

Set a rolling 18-month pipeline + capacity view; accept dips when you’re building IP/systems.

Ring-fence an “innovation tax” (5–10%) for IP/productisation that improves margins next quarter, not next decade.

Diversify revenue: more farming, some hunting, a little fishing; reduce single-client exposure.

Keep cash healthy; bring investments forward when pipeline is soft, pause when it’s bursting.

Build systems before you “scale”: CRM/PSA, simple governance, clear roles. Lumps shrink when ops mature.

Perfectly smooth growth is a fairy tale. Resilient firms grow through planned, temporary slowdowns that fund the next jump.

#ConsultingGrowth #ProductisedServices #PrivateEquity #BoutiqueConsulting

Great podcast with Todd Taskey talking about owners that decide to sell and then go again (glutton for punishment?!). Some really nice examples of how it works and can really scale the value received. 


https://lnkd.in/eySTqe4g

Your biggest client is killing your valuation.

I see it every year: boutiques with 40% revenue from one client get valued at 1-2x EBITDA lower. Those with no client >15% sell for 1x higher.

On an average boutique deal, that's leaving £8m on the table.

If this is you, it's time invest in: 

- top of funnel visibility
- strong thought leadership and brand building
- account expansion of other accounts
- a better referral programme
- Partner / Director visible expertise

At Equity Sherpa, we aim to quadruple firm valuations in 3-4 years. A central mechanism for this is the multiple. 

Boutique multiples range from 5x to 15x EBITDA. Which will yours be? 

#ConsultingGrowth #BoutiqueConsulting #PrivateEquity #ConsultingValuation #ExitStrategy

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