It's more and more true every day: we live in the age of the specialist.
Specialization has long been an effective strategy to command premium prices, generate more leads, and close sales - and it's only growing more important. In the management consulting industry, the new ubiquity of online communication means that the barriers of distance have begun to crumble.
The "smaller" the professional world becomes, the more likely it is that buyers will go online to look for specialists. And in this environment, the advantages of specialization are more powerful than ever.
Is this the end of the generalist management consultant? Are the specialists going to eat the generalists' lunch? For more perspective, we should consider the different kinds of specialization, including the advantages and disadvantages of each.
1) Industry specialization.
This is one of the most powerful types of specialization, for a very simple reason. Generally speaking, industries as a whole are likely to remain with us for some time. They will always have challenges and issues, even though those challenges may change. As long as an industry specialist invests the time and attention to stay up-to-date on the issues of the day, they won't have to worry about becoming obsolete-unless the whole industry disappears.
It is possible, of course, for industries to disappear. If you chose to specialize in serving video rental stores fifteen years ago, you might be in trouble now. But industries are typically more stable than other anchors for specialization; you just have to choose your industry strategically. Pick the right niche, and you can adapt continuously as issues change within your marketplace.
2) Service type specialization.
Another strategy is to specialize in providing a certain type of service across various industries. Examples of this style might include specialization in social media consulting, succession planning guidance, or strategic planning. As a provider, you leverage deep expertise in a highly specific service to assist a wide range of clients.
This kind of specialization works well when you're providing or introducing a new service area that not many people are familiar with. It can provide fuel for tremendous early growth while establishing your credibility in a burgeoning market.
There is, however, a significant snag. While this specialization may offer great initial opportunity, once competitors recognize the demand for your signature service, the market may swiftly become flooded-if it hasn't already.
3) Geographical specialization.
This is a form of specialization with a long, long history: working only with clients in a certain geographic range. In the past, the advantages of specialization in a region have been significant: it has allowed providers to understand the unique needs of a particular client-base - the idiosyncrasies of local regulation, say. Geographical specialization can sometimes afford you a close-knit network of clients and prospects.
As long as there's an actual advantage to being local, this style of specialization works. But here's the problem: in today's marketplace, there's a clear trend away from buyers seeking only local options for specialist providers.
Many of today's business challenges are challenges that are being faced globally, and it's easier than ever for top specialists to communicate with clients around the world. For these reasons, it's clear that geographic specialty is becoming a less and less powerful way to distinguish yourself.
4) Specialization in a certain role within organizations.
With this type of specialization, you focus on working with a given role (or set of roles) within clients' organizations. This might mean you provide management consulting specifically for CEOs, or work exclusively with heads of human resources.
This strategy can position you to deliver extraordinary insight on the needs and challenges of a particular role, helping them frame problems in a way based on extensive and focused experience.
This approach may seem to constrain your firm's audience, but it has considerable advantages - and those constraints aren't always as serious as they seem. If you pick a role that is relatively stable, you can really focus on the needs of professionals in those roles, even across industries, opening your business up to a wide variety of potential clients.
5) Specialization in certain types of problems.
Depending on what type of management consulting you provide, you may specialize in a particular problem that you solve through a variety of services offerings. This is a specialization style that lends itself well to content marketing and lead generation. By creating educational content on the problems you solve, you can demonstrate your expertise and specialization while helping potential clients to frame those problems in a way that aligns with your services.
What might these problems look like? They could include productivity improvement, cost reduction, and dealing with post-merger integration. This approach has the advantage of strong resonance between the problem you're solving and your specialty, but the challenge is that you can only work with organizations that have this problem-and have identified it as an issue.
If you choose this specialty, you'll have to continuously pursue new clients, because once you've solved the problem...well, you've solved the problem.
Conclusion: Have Generalists Had Their Day?
Generalists probably aren't going to disappear from the face of the Earth any time soon. But it's clear that the advantages of specialization are various and powerful, and these advantages will continue to give firms a competitive edge as the management consulting industry becomes more global. The key is to make an informed decision with a thorough understanding of your strategy's particular benefits and challenges.
By carefully choosing a focus for your firm, you can differentiate yourself from the rest of the pack while building real expertise and credibility in your niche. By choosing an area of the marketplace to focus on, you can own that area - and this specialization is likely to serve you well moving forward.
To learn more about how you can identify a specialization to turn your firm into a high growth, high value firm, check out the full-length eBook, Spiraling Up.