Imagine you are a Chief Operating Officer at a mid-sized financial services firm. You have a problem: your digital transformation is stalling, your competitors are moving faster, and your board wants answers. You know exactly what you need: someone sharp, experienced, and willing to tell you uncomfortable truths. You could hire a specialist who has spent two decades solving precisely this kind of problem, who would start next week, challenge your assumptions directly, and charge you a fraction of what a large firm would bill. Or you could hire one of the big consultancies, wait six weeks for a team to mobilise, pay seven figures, and receive a beautifully formatted strategy deck that mostly confirms what you already suspected.
This is an oversimplified trope, but it makes the point.
You hire the big firm. Almost everyone does.
This is not an essay about why that decision is wrong. It is an essay about why it is so predictable, and about why the logic underpinning it may finally be starting to fracture.
The Pattern
The consulting market, globally, is worth somewhere north of £500 billion. The overwhelming majority of that spend flows to a remarkably small number of firms. This concentration is not new, and it is not accidental. Large organisations have been buying consulting services from large providers for decades, and the pattern persists even when the outcomes are mediocre, the fees are exorbitant, and the alternatives are obvious.
The standard explanation is that big firms offer scale, global reach, deep sector expertise, and a bench of talent that no independent could match. There is truth in that, and it would be dishonest to pretend otherwise. If you need a team of forty deployed across three continents to integrate a post-merger IT landscape, you probably do need a large firm. If you need regulatory expertise across multiple jurisdictions, the depth of a global practice matters.
But most consulting engagements are not like that. Most are strategic reviews, operational diagnostics, innovation programmes, or transformation roadmaps, projects where what matters most is the quality of thinking, the willingness to challenge, and the speed of delivery. And it is worth asking why, even in those cases, the same buying pattern holds.
The Psychology of the Purchase
The most honest answer is that hiring a prestigious consulting firm is, in many cases, less about solving the problem and more about managing the risk of being seen to have tried. The phrase that captures this best is the old technology-buying adage, adapted for consulting: nobody ever got fired for hiring IBM.
This is not cynicism. It is a perfectly rational response to the incentive structures that govern corporate decision-making. When a senior leader commits significant budget to a consulting engagement, they are not just buying advice. They are buying career insurance. If the project succeeds, they chose well. If it fails, they chose a firm that any reasonable person would have chosen. The decision itself becomes defensible, regardless of the outcome. An independent consultant, however brilliant, offers no such cover. If things go wrong, the question is immediate: why did you hire some unknown freelancer instead of a proper firm?
This dynamic is compounded by herd behaviour. Boards and leadership teams exist within tight professional networks. They watch what their peers do, what their competitors commission, and which firms appear on the conference circuit. If three of your competitors have retained BCG for their sustainability strategy, there is institutional pressure, sometimes explicit, often simply ambient, to do the same. This is not strategy. It is institutional mimicry, and it functions as a substitute for independent judgement.
There is also the signalling dimension. Hiring a globally recognised consulting brand communicates seriousness to investors, regulators, and boards. It says: we are taking this seriously enough to spend serious money on it. The actual content of the work is almost secondary to the signal that commissioning it sends.
The Innovation Paradox
This is where the pattern becomes genuinely interesting. Large consulting firms have, over several decades, become extraordinarily skilled at a very particular trick: producing work that looks progressive whilst recommending nothing that puts anyone at risk.
Consider the typical output of a major strategy engagement. The deck is beautifully designed. The language is forward-looking: “digital-first”, “customer-centric”, “agile at scale”. The recommendations are plausible, even exciting. But look closely and you will notice something: almost nothing in the document requires anyone to make a genuinely difficult decision. The proposals are calibrated to be just novel enough to impress the board, but safe enough that no executive’s position is threatened by them. The real skill is not in the analysis. It is in the calibration.
This produces what might fairly be called performative innovation, the appearance of strategic boldness without the substance of it. Decks that read brilliantly but change nothing structurally. Recommendations that everyone agrees with precisely because they demand nothing uncomfortable of anyone.
But there is a version of this pattern that is more troubling still, and it is worth naming honestly. The large firms, for all their conservatism, at least bring rigour. The decks are well-researched. The analysis is competent, even if the conclusions are cautious. Below that tier, however, sits a layer of consulting practice where even this baseline is absent, where what is being sold is not safe insight, but personality. Confidence, warmth, ease in a room, the ability to make a client feel looked after. These are not negligible skills. But they are not strategy.
Anyone who has worked alongside firms operating in this mode will recognise the pattern: a breezy assurance that masks a striking lack of preparation; recommendations that are neither grounded in evidence nor genuinely original, but are delivered with such conviction that they are rarely questioned; an apparent indifference to whether the work actually holds up under scrutiny, because the relationship feels so good that scrutiny never arrives. The client is charmed. The engagement is renewed. And the underlying problem remains precisely where it was.
What makes this dynamic so revealing is that it exposes the buying decision even more starkly. When a firm with neither distinctive pedigree, nor deep technical expertise, nor genuine intellectual ambition can sustain long-term client relationships on warmth and self-assurance alone, it tells you something important about what the market is actually selecting for. It is not selecting for outcomes. It is selecting for comfort.
The irony is acute. Genuine innovation, the kind that actually shifts an organisation’s trajectory, requires discomfort. It requires someone to say: this thing you have been doing for fifteen years is wrong. It requires unfamiliar thinking, direct challenge, and a willingness to be unpopular. These are exactly the things that make corporate buyers nervous, and exactly the things that the current purchasing model is designed to avoid.
There is a feedback loop at work. Buyers reward safety. Firms optimise for what buyers reward. The market converges on a product that is impressively packaged but structurally conservative. Anyone offering something genuinely different, genuinely challenging, is competing against a system that has been refined, over decades, to prefer the appearance of progress over the real thing.
The Reputation Moat
Brand, in consulting, functions as something close to a monopoly advantage, and it operates through circular logic. Large firms are trusted because they are widely hired. They are widely hired because they are trusted. This self-reinforcing loop has almost nothing to do with the quality of any individual engagement. It is a reputational flywheel that, once spinning, is extraordinarily difficult for any newcomer to disrupt.
Social proof substitutes for due diligence. A procurement team evaluating a consulting proposal will often assess the firm’s credentials, client logos, case studies, brand recognition, far more rigorously than they assess the specific individuals who will actually do the work. This is how you end up with a partner who is genuinely world-class selling the engagement, and a team of two-year analysts delivering it. The brand provides the trust. The staffing model provides the margin.
To be clear: this is not fraudulent or hidden. It is a market structure that has evolved to reward reputation over performance, and it persists because no single buyer has sufficient incentive to challenge it. The cost of being wrong about an unknown provider feels much higher than the cost of overpaying for a known one. This asymmetry is the moat.
The Shift
And yet. Something has changed, and it is worth being precise about what.
The technology landscape of the past three years has fundamentally altered what a small team, or even a single experienced consultant, can credibly deliver. AI tools now provide access to research synthesis, data analysis, and production capabilities that would previously have required a team of fifteen or twenty. An independent consultant with the right tools and the right expertise can now produce work of a depth and polish that was, until very recently, the exclusive preserve of large firms with large teams.
Distributed specialist networks have compounded this shift. An independent does not need to maintain a bench of generalists. They can assemble precisely the right combination of expertise for a specific problem, a regulatory specialist for one workstream, a data architect for another, a behavioural economist for a third, and disband the team when the work is done. No overhead. No bench costs. No incentive to extend the engagement beyond what is needed.
The cost implications are stark. The same calibre of strategic thinking, delivered faster, with more direct senior attention, at perhaps a fifth of the fee. The risk calculus, rationally, should have flipped.
And yet buying behaviour has barely moved. The institutional inertia is remarkable. Procurement processes still favour firms that can demonstrate scale. RFP templates still ask for office locations and headcount. Evaluation criteria still weight brand recognition as a proxy for quality. The market has shifted underneath the purchasing model, but the purchasing model has not noticed.
The honest question, then, is this: if you could get sharper thinking, faster delivery, more direct access to senior expertise, and genuine willingness to challenge your assumptions, for a fraction of the cost, why wouldn’t you at least test it?
What Would Have to Change
Diagnosing the pattern is the easier part. The more interesting question is what shifts would be needed for buying behaviour to catch up with what is now possible.
The first is cultural. Leadership teams would need to reward genuine challenge rather than polished confirmation. This means being willing to commission work that might produce uncomfortable conclusions, and being willing to act on them. It means evaluating advisers on the quality of their thinking rather than the prestige of their letterhead.
The second is structural. Procurement processes would need to evolve. This does not mean abandoning rigour; it means redirecting it. Instead of asking how many offices a firm has, ask who, specifically, will be doing the work. Instead of weighting brand recognition, weight the relevance and depth of the named individuals’ experience. Instead of defaulting to a single large provider, consider whether a curated team of specialists might be better suited to the problem.
The third is governance-related. Boards and audit committees would need to become more sophisticated buyers of advisory services. This means asking harder questions: not just “who did you hire?” but “what did the work actually change?” Not just “what did it cost?” but “what was the cost of the alternative, and why was it rejected?”
Some organisations are, quietly, already making this shift. They tend to be founder-led businesses, or organisations with leadership teams that are unusually secure in their own judgement. They are comfortable hiring people rather than brands. They evaluate outcomes rather than inputs. They are, notably, often the organisations that their more conventional competitors are trying to catch up with.
There is a final thought worth sitting with. The consulting industry, as currently structured, is not optimised to help organisations change. It is optimised to help organisations feel as though they are changing. The distinction is important, and it is expensive.
The question is not whether independents and small firms can now deliver work of equivalent or superior quality. The technology has settled that. The question is whether the people who buy consulting services are ready to optimise for outcomes rather than optics, and what it would take for them to find that courage.
That is not a rhetorical question. It is, genuinely, an open one.
Further reading:
↳ The triage step that would solve this paradox upstream is proposed in The Missing Function.
↳ What the paradox looks like from inside the engagement, after the fact, is described in The Feeling After the Consultants.
↳ The AI disruption angle mentioned here is developed more fully in Productivity Is the Wrong Word.
Garden notes
- What a frame is — the frame the consulting market has built
- Proxy capture — buying credentials as a proxy for outcomes
- Why the frame cannot see itself — why the buying pattern persists
- The rented frame — companion essay: what happens inside the engagement when the diagnosis is borrowed rather than owned
- What this is not — how this work differs from the consulting described here
- Aperture — the alternative