"Small is the new big"

In a recent Harvard Business Review, Peter Bregman points out a new business trend, which is seeing smaller, no-name companies shoring up big-deal contracts that their larger counterparts (it wouldn’t even be fair to call them competitors) aren't able to nab—and he points specifically to the consulting industry for examples. A major reason for this, Bregman purports, is that many consultants at big firms are just not happy right now. They've survived rounds of layoffs, are always looking over their shoulder, wondering if they're next, and are wholly distrustful of firm management. In short, morale is in the dumps. Mix that with economic insecurity, and you've got a recipe for disaster. Clients, Bregman asserts, sense employee unease, which makes them question whether consultants at such a company would be able to make good on a contract of considerable size.

Another reason for the rise of smaller firms? Client trust. The large-firm experience is an impersonal one, with clients liable to talk to any number of consultants, without building a relationship with any one in particular. At a mom and pop consulting shop, however, clients are able to forge personal relationships and trust, which often lead to long-term relationships. As Bregman puts it, "We simply don't trust companies anymore. We trust people. And in big companies, it's hard to even find a person to trust as we scream 'operator' into our telephones only to get transferred to another menu whose options have changed. That gives small companies a huge advantage."

Indeed, I could not agree more, and hereby proclaim 2009 the year of the niche firm. These firms are often overlooked by recent grads who see stars in the McKinsey and BCG names. But while big firms struggle to keep staff billable, niche companies are able to get down to basics, excel in what they know and forge strong, lasting client relationships. They can also be more nimble in responding to market fluctuations and client demands. They don't have as many employees to support, little to no bureaucracy and, in a smaller environment, each employee can be recognized in his own right.

Bregman concludes, "Small is the new big. Sustainable is the new growth. Trust is the new competitive advantage."