Your Consultancy’s Slowdown Isn't the Economy's Fault

Here is a non-exhaustive list of excuses I’ve heard so far this year about why consulting businesses are struggling.

  • We had a slow start in 2023… because of reasons that are out of our control.
  • Clients are postponing their decisions… so we can’t get our sales pipeline moving.
  • The economy is tough right now… and nobody wants to spend money.

Newsflash: there has never been a perfect time for fast growth and business. This period of time just has more convenient excuses. 

But even at the economy's peak, I still heard excuses from otherwise very respectable consultancy founders for why their consultancies weren’t growing as expected. People are very good at finding new ways to see the problem instead of looking for a solution.

Problems are inevitable. I started my consulting business in 2008, during the financial crisis. Everybody told me I was crazy. We did very well and were acquired by Deloitte in 2016. After my Deloitte exit in 2020, I launched my new consultancy, in the middle of the Corona lockdown! Difficult? Of course! But here we are, 3 years later, alive and kicking. 

You always have two options. You can keep making excuses and shifting the blame. Or accept responsibility, accept the reality of the matter, and start thinking about how to solve them. 

Hard as it may be to hear, there’s always a solution. There’s always a better or different way of doing things. Maybe there’s a new strategy you can pursue, or maybe you can just hang in there until things get better. But the key step is to stop thinking of new ways to see the problem. 

In short, if you want to grow your consultancy business, don’t finger-point. Though economy? Get over it.

Love your problems

Let’s start by acknowledging that, yes, times are tougher than they were this time last year. But honestly, ask yourself: has your consulting business ever been truly 100% free of problems?

The answer is almost certainly no. The truth is that even in better economic times, people find reasons to complain. The labor market was too tough, or clients had too many demands. 

The mind has a funny way of inventing problems if it can’t find any to work on. 

That’s because everything worthwhile in life is won by overcoming negative experiences. And that’s where we find meaning, both as individuals and as consulting leaders. So even when things are smooth, your mind looks for things to fixate on and worry about. 

Instead of seeing this period of economic uncertainty as something to complain about, start finding meaning in that struggle. Acknowledge that it's okay for things to suck sometimes, and that sucky feeling can actually bring purpose to you and your consulting business.

This is not only about finding solutions to your business problems but improving your quality of life as a consulting leader.

Recommended reading: My Biggest Learnings in 10+ Years of Consulting Work

Don’t focus on the problems. Focus on the way forward

Focusing on your problems reduces your sense of control. 

“It’s not my fault.” “It’s the economy.” “I’m not to blame.”

Focusing on the way forward empowers you. 

“How can I fix this?” “What can I do about this?” “How can we overcome this obstacle?”

This mindset shift serves two purposes. First, it will help you find meaning in your consulting business. Things are hard, yes. But that doesn’t mean it’s OK for you to find excuses to complain.

Second, your team is negatively impacted by your complaints. Your negativity and excuses don’t only affect you - they affect your employees, partners, and clients. And your family and friends. Get it together and help everyone look at things with more optimism.

Look at those two dialogue lines above. Which one makes you feel most excited to work? Which one do you think is most inspiring to your team? The one where you complain, or the one where you take action?

These problems are a way for you to find meaning in your work, power through struggles, and come out better. 

Don’t wish you had a problem-free life. Look for a way to build a life with good problems. This is a chance for you to reframe the bad economy as a way to adapt, change, and overcome obstacles and challenges.  

Pick your problems

Of course, don’t just accept your problems and suffer silently. There’s no value in suffering if you’re not getting something out of it. 

Problems are inevitable, but what they mean for your consultancy business is flexible. It all depends on how you react.

What if I told you that you get to control what your problems mean to you, based on how you think about them? Like I said earlier, your mind will always find problems to fixate on. There’s no such thing as a problem-free business. It’s more important to think about how you respond to challenges. 

For example, yes, we’re in an economic downturn. Nobody knows what’s going to happen. 

You can let that take the blame for your poor performance. Lots of people are doing exactly that.

Or you can understand that you are choosing to focus on solving this problem and commit to looking for ways to cope with it. Accept that there is a good response to the problem, and you can find meaning in trying to find it. 

You may want to feel like matters are out of your control, so you can blame someone else for your consultancy's struggles. But the truth is that you always control how you interpret what happens to you, as well as how you respond.

It’s a mindset shift.

When you feel like you’re having problems forced upon you, against your will, you feel victimized and miserable. But when you actively choose your problems, you feel empowered.

Recommended reading: Do You Need New Consulting Services to Fight the Recession?

Commit to the challenge of overcoming your problems

Accept responsibility for your problems. That’s the first step to solving them. They may not be your fault, but they’re still your responsibility. 

The next step is to commit to what you know is best. 

In a downturn, the worst thing you can do is stay stagnant and complain. The second-worst thing I’ve seen so many consultancy leaders do is flail around and add a bunch of new services to their roster. 

It feels like a good choice because at least your consultancy appeals to someone, and you’re getting some cash flow. However, firms that start offering a wide range of services to a wide range of prospects will only get poor-fit clients and substandard margins. 

This is especially important to keep in mind during economic downturns. Clients are under pressure and are looking for how to get the most profit from their investment, so they’ll be looking for consultancies to compete on price. If you offer a wide range of services, your firm can’t use focus and expertise as a selling point.

This results in even lower profits since you can only compete by reducing your prices. That's what I always call 'the vicious loop to consulting hell'. 

Then, when the economy turns around, you’re in a worse position. Your ideal prospects will already have formed relationships with their go-to focused consultancies, and they won’t want to stop working with them since those firms will almost certainly have delivered real value during the downturn. 

Accept the problem. Embrace the positives of shifting your mindset about dealing with the problem. And commit to addressing the problem while also committing to your consultancy’s focus and expertise.

It’s not the difficult economy, it’s you!

This may be a bit of a harsh wake-up call, but take it in the spirit it’s intended: there’s always a way out, a solution, a better way of doing things. 

You just have to stop looking outward at problems you can’t control, and start looking inwards to find your response to the problem - which you can control. 

The solution ultimately doesn’t matter. Maybe you need to think about repositioning. Maybe it’s time to build an email list or revamp your website. It’s not about what you do to fix the problem - it’s that you see this as a choice you’re making as you lead your consultancy. 

You are choosing to see this poor economy as an opportunity to take responsibility for your consultancy’s success.

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