The year 2020 was a challenging year for every single business. The COVID-19 pandemic, together with all related restrictions and lockdowns, caused decreases of many economic indicators and revenue drops in many companies from diverse industries. The consulting market was no different. However, being in Q3 of 2021, it seems that most of the disruptive factors have been overcome, and both the economy and the advisory sector are getting better, with more agile companies emerging as winners in the new normal with increased uncertainty.
The consulting market took a sizable hit from the COVID-19 crisis. Source Global Research estimated that, during 2020, consulting revenues fell by 16% at the global level. The situation in the European consulting market — the world’s second-largest — was also severe in 2020. However, the pandemic’s impact on it was less severe than the global situation. Over the 2017-2019 period, the European management consulting industry turnover has grown on average 8% per year. In 2020 the turnover dropped by 6% on average, according to the FEACO report.
The impact for consulting companies was more severe in some European countries. For example, Nordic companies were hit significantly, having a 10% turnover decrease. The COVID-19 also hit their employment rate. On average, employment in Europe has been reduced by 2.5%, with Finland (10%) and Denmark (5%) among the most affected.
The decline in the industry revenue can be mainly attributed to increased uncertainty and consequent decline in demand in the most affected sectors by the COVID-19 – such as retail, tourism, hospitality, and manufacturing. A significant proportion of consulting projects before the pandemic was also conducted for automotive, heavy equipment, sales, energy, and utilities which suffered in 2020 as well, and thus frozen or even canceled the assignments.
It was a massive challenge for many advisory businesses to survive through the demand decline of 2020. Some of the barriers faced by many consultancies during the past year were the extensive and rigid organizational structures, the high fixed costs, inflexible methods of work, and difficulties in quickly adapting to unexpected disruptions.
Observing the struggle of various advisory companies, we are grateful that CIVITTA developed sustainably even in the demanding environment of 2020. We managed to grow our business from 18m turnover in 2019 to 20m in 2020 by leveraging our Challenger model — providing superior value for money for our Clients and tapping into CIVITTA’s strong capabilities in digital transformation and funding services. To support our growth and build an even stronger foundation, we also kept exploring opportunities in new markets, with acquisitions in Kosovo and Armenia, while strengthening our teams in key growth markets such as the Nordics & Baltics.
The critical factor standing behind CIVITTA success is our Challenger business model. Applying this unique approach in every aspect of our operations and projects allows us not only to grow in times of prosperity, but it also enables us to thrive in contexts that bring uncertainty and require immediate adaptation to a rapidly changing environment.
Our business model challenges the traditional norms of management consulting, providing top quality advisory that delivers measurable results at a value for the money price point. We deliver to our clients more value at scale by mixing significant consulting knowledge and resources with lean processes and structures while having an effective overhead cost structure.
“We at CIVITTA Finland also faced a standstill when the pandemic hit the market but managed to navigate through the crisis and post strong growth figures of 50% last year. Two cornerstones of Challenger consulting helped us deliver that: firstly bringing consulting services accessible to all sizes of companies helped in growing our Client portfolio and, most importantly, focusing on generating long-lasting impact through our assignments enabled building great continuity in our Client relationships. CIVITTA’s flexibility in supporting our Clients solve their most challenging growth-related challenges was a great asset in this and allowed us to help companies update their strategies, enter new markets, accelerate digital transformation and attract funding.“
Tuomas Virtanen, Partner CIVITTA Finland
“The fact that we were able to move online fast and without compromising the quality of our work was critical in our growth during the pandemic. The Challenger approach, focused on agility and flexibility, helped us create impact in growing the startup ecosystems across CEE even in these difficult times.”
Eva Simekova, Associate Partner CIVITTA Slovakia
An essential element of our Challenger approach is our team – experienced people with entrepreneurial mindset and project delivery approach. At CIVITTA, everyone can take the lead and build their practice around a vertical or service line. We are adventurous and eager to work in new and challenging fields.
We are challenging our competitors with our results; our clients with our solutions for their growth; entire industries with our ambition to implement innovations; and ourselves – to be the leading management consulting company originating from the CEE region.