The Growth Strategy Big Consulting Firms Can’t Use (But You Can)

Every week, I talk to consulting firm leaders like Sarah and John who are facing the same impossible choice.

Sarah runs the kind of focused boutique firm that business schools love to praise. Her team does exactly one thing: they help manufacturing executives drag their operations into the digital age. They're good at it too. Really good. Their client list reads like a Who's Who of American manufacturing. But Sarah called me recently with a confession: they've hit a wall. "Every time I think about adding new services," she told me, "I get this knot in my stomach. What if we lose what makes us special?"

Then there's John, whose story I see repeated in boutique firms. His website proudly displays twelve different service offerings - everything from high-level strategy to nuts-and-bolts implementation, spread across half a dozen industries. It looks impressive. It sounds impressive. And it's killing his business. Each service line demands its own expertise, its own marketing, its own everything. His team is drowning in complexity, his margins are low, and prospects often feel confused and overwhelm.

Both believe they're stuck with an agonizing trade-off: stay laser-focused but accept hitting a growth ceiling, or diversify and watch their secret sauce get watered down into generic consulting soup.

That’s a false choice. There’s a third path most boutiques miss: economies of scope. The ability to grow by packaging your existing expertise into different services that share resources and processes.

Think of it as the opposite of economies of scale. Instead of serving more clients with the same service, you find smarter ways to monetize what you already do well.

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The Third Path: How Smart Service Expansion Works

I've watched hundreds of boutique consulting firms evolve, and the pattern is almost always the same. They start by getting ridiculously good at solving one specific problem for one specific type of client. Word spreads. The founder's phone starts ringing. They grow… and then hit a frustrating ceiling.

At this point, most firms panic and make one of two mistakes: they either dig in their heels and refuse to expand (missing countless chances to serve their clients better), or they start adding random services like they're picking items off a menu (diluting everything that made them special).

There's a smarter way. Instead of choosing between growth and focus, the best firms package their existing expertise into complementary formats. Take a tech implementation firm - they might create:

• A diagnostic service that spots implementation roadblocks.
• A training program that teaches clients their proven methodology.
• A change management toolkit that captures their best practices.
• A full-service implementation package for clients who want it all.

Here's the magic: each of these offerings draws from the same well of expertise. They’re not “new” services - just new delivery vehicles for what the firm already knows. And because they share resources and processes, each new offering actually makes the others more profitable.

Let's go back to Sarah's story, because what happened next perfectly illustrates this approach in action. Instead of diluting their manufacturing expertise by chasing new industries, she got creative about packaging what they already knew. She launched a rapid assessment, a training program, and a retainer-style advisory service.

These weren't really separate services. They were different windows into the same expertise. But the magic happened in how they worked together. The assessment service became their best sales tool - prospects could "try before they buy" into bigger projects. Those implementation projects generated war stories and case studies that made their training program irresistible. And the ongoing advisory work kept them plugged into clients' evolving challenges, making everything else they offered sharper and more relevant.

This approach - let's call it "smart service diversification" - is how boutique firms can thread the needle between growth and focus. It's not theoretical either. Research from SPI (their 2023 Professional Services Maturity Benchmark), for example, found that new services drive 25-30% of revenue for professional services firms. The opportunity is real. But to capture it, you need to understand exactly how economies of scope work in professional services.

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The Three Pillars of Scope Economics

Boutique consulting firms can create value through economies of scope in three different but interconnected ways:

1. Co-produced offerings;
2. Shared processes;
3. Shared resources.

Let's start with co-produced offerings. Think of it as finding money in your couch cushions - it was there all along. It happens when delivering one service naturally creates the capability to deliver another.

Remember how Sarah's firm had to diagnose problems before starting any major project? That diagnostic work was happening anyway - they just packaged it into a standalone service. Brilliant. Or think about the frameworks and methodologies consulting firms develop during client work. The smart ones turn these into training programs or downloadable toolkits. They're essentially monetizing work they've already done.

Shared processes create another source of economies of scope, particularly in business development and service delivery. When Sarah's firm publishes a thought piece about digital transformation in manufacturing, it attracts prospects across all offerings. Sales calls become way more effective when you can offer a range of related solutions rather than forcing every prospect into the same service model. Need to build internal buy-in first? Start with an assessment. Ready to move fast? Jump straight to implementation. Want to build internal capability? Let's talk training.

The third source comes from shared resources, particularly people and IP. This is where boutique firms often have the greatest advantage. Instead of hiring different experts for different services, they can leverage their core team's expertise across multiple offerings. Sarah’s manufacturing technology expert can deliver assessments, lead workshops, and guide implementations, becoming more valuable to clients with each new context. The same goes for her firm’s proprietary tools, frameworks, and methodologies - the more ways they're used, the lower their cost per engagement.

When these three things come together, your economics improve, your services cross-sell, and your differentiation deepens:

• You're spreading your fixed costs across more revenue streams.
• You create natural stepping stones for clients.
• You're growing without diluting what makes you special.

This is where boutique firms have a hidden advantage over bigger players. The giants have to chase economies of scale - more clients, more projects, more everything. But boutique firms can grow by serving existing clients in smarter ways. You keep the intimate relationships and high-touch service that made you successful in the first place.

What really gets me excited about economies of scope is the compounding effect. Each new offering makes your existing ones better. Your assessment service makes your implementations sharper. Your implementation experience makes your training more valuable. Your training relationships lead to more implementation work. It's a virtuous cycle that keeps accelerating.

Of course, there's a flip side to this coin: if you get it wrong, that same compounding effect can work against you.

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When Growth Kills: The Warning Signs of Service Bloat

Let's talk about what happens when this goes sideways. Because just like compound interest can work for or against you, economies of scope can turn into what economists call "diseconomies of scope" - the point where adding new services starts destroying value instead of creating it.

Remember John, our consultant with the dozen different services - his story is the perfect cautionary tale. Each service looked good on its own. But together they created what I call the "Cheesecake Factory menu problem." Clients see 250 items on the menu and don’t know where to start - and you have the impossible mission of maintaining quality across all those dishes. That's exactly what happened to John's firm - they had so many services that none of them could be truly excellent.

The warning signs of service bloat are predictable, but most firms miss them until it's too late:

• Your market positioning starts to blur. I watched this happen to a brilliant strategy firm last year. They were known for razor-sharp strategic insights until they added technology implementation to their menu. Suddenly clients started second-guessing their strategy recommendations: "Are they suggesting this approach because it's right, or because they want the implementation work?"
• You start stretching your expertise like cheap rubber. I remember a manufacturing operations firm that thought adding software selection services made perfect sense - after all, their clients needed both. But evaluating enterprise software vendors requires a completely different skillset than optimizing factory operations. They learned this the hard way after losing two major clients due to botched software recommendations. You can't fake expertise at this level - clients can smell it a mile away.
• Death by meetings. Every new service needs its own processes, its own quality checks, its own resource planning. Before you know it, what started as smart growth turns into a bureaucratic nightmare. I'll never forget visiting a boutique consulting firm that had expanded to eight service lines. Walking through their office, all I saw were empty desks and packed meeting rooms. The partners were spending more time coordinating services than delivering them.

You have the power to reverse this spiral. All you need is making tough decisions.

Last year, I worked with a cybersecurity consultancy that had spread themselves across seven different offerings. They made a bold move: cutting back to just their three best services. Guess what happened? Revenue shot up 40% the next year. By eliminating the complexity, they could focus on what they did best. Another client took their messy catalog of twelve "unique" services and reorganized them into two clean service families that shared common delivery processes. Their clients actually thanked them for making things simpler.

If there's one lesson that jumps out from these stories, it's this: The game isn't about having the most or the fewest services. It's about finding that the sweet spot where offerings amplify each other instead of competing.

Now I know what you’re thinking: “How do you actually find that balance?” See my best answer below.

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The Service Portfolio Playbook: A Practical Framework

After watching hundreds of boutique firms wrestle with this challenge (and helping quite a few through it), I've developed a framework that cuts through the complexity. It's built on three principles that have proven remarkably reliable:

1. Stack, don't scatter. Real economies of scope happen when new services build on what you already know and do well. Sarah's firm nailed this - every new service amplified their manufacturing expertise. John's firm missed it completely - each new service pulled them in a different direction.
2. Complexity kills. I've seen it time and time again: the relationship between service offerings and coordination costs isn't linear, it's exponential. Every new service doesn't just add complexity - it multiplies it. This is why even small boutique firms can drown in their own overhead.
3. Let your best clients be the compass. As industry expert David C. Baker notes, "Your best clients should use most of your services most of the time." It's such a simple litmus test, but it catches problems early.

These principles translate into specific triggers for adding, removing, or refining services. Here's how to apply them:

When to Add Services

Here's my rule: never add a service unless you can test it with 1-2 paid pilots from friendly clients first. I learned this the hard way after watching too many firms launch services based on hunches and hopes. But when should you even consider running those pilots? Look for at least two of these signals:

• Your clients are asking for it. Not vague "wouldn't it be nice" musings, but concrete requests in 25-30% of your recent proposals or discovery calls.
• You already have the expertise. If you need to hire new people or learn entirely new skills, stop right there. That's not economies of scope - that's scope creep.
• The numbers work early. Your first couple pilots should hit at least 40% gross margin without crazy discounts. If you can't make money when you're being extra careful with friendly clients, you won't make it at scale.

When to Kill Services

Sometimes the kindest thing you can do is pull the plug. Watch for these red flags - if you see two or more, it's probably time to sunset or consolidate the service:

• Your best clients aren't buying it. If none of your top clients has touched it in 12 months, that's a blinking red light.
• You keep losing proposals for it, or it's become a tiny slice of your business (less than 10-15% of engagements).
• The margins stay stubbornly low (below 30%) even after you've tried fixing pricing and scope.

When to Fix What You Have

Not every struggling service needs to die. Sometimes they just need a tune-up. Look for these signals - if you spot two of them, it's time to get to work:

• You're constantly getting beaten up on price (either explicit discount requests or fees landing way below your rate card).
• Your client satisfaction scores are noticeably lower than your other services.
• The service isn't leading naturally to more work (weak follow-on sales or repeat business).

When you spot these warning signs, you've got three main fixes in your toolkit:

• Tighten up the scope to something you can consistently nail.
• Create clear "good/better/best" packages that give clients choice while keeping you efficient.
• Get better at showing the value (sometimes it's not the service that's broken, it's how you're selling it).

Let's see how this works in practice. Remember Sarah's firm? When they added their assessment service, they didn't just jump in based on gut feel. They noticed 40% of sales conversations naturally drifting toward diagnostic work - that's client pull. They had the expertise in-house - no new hires needed. And their first two pilots hit 55% margins without special pricing. Only then did they scale it up. That's how you use this framework in the real world.

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Putting the Framework to Work

Here's the thing about frameworks: they're only as good as your ability to actually use them. After years of helping firms implement this approach, I've learned you need a simple quarterly ritual to make it stick. Here's exactly what to do:

1. Get the real data (not just gut feel):
   • Grab your last 90 days of proposals and discovery call notes
   • Run the actual numbers on margins for each service
   • Pull together client feedback (the good, bad, and ugly)
   • List out every time a client asked for something you don't offer
2. Score your services (be brutally honest): Create a simple spreadsheet and rate each service against our triggers. Don't sugar-coat it - this is where firms often fool themselves. The numbers will tell you what to kill, what to fix, and what pilots to scale up.
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3. Take real action (no half measures):
   • Killing a service? Do it cleanly. If there are no active clients, pull it from your website today. If you've got ongoing work, map out a 90-day sunset plan that takes care of your clients and your team.
   • Fixing a service? Test your changes with 2-3 friendly clients first. Don't try to boil the ocean.
   • Adding something new? Start with 1-2 paid pilots. Keep them short (2-4 weeks), charge real money (free pilots teach you nothing), and collect evidence of success like you're building a court case.

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Why This Matters More Than Ever

Look, I wouldn't be pushing this framework so hard if I didn't think we were at a unique moment for boutique consulting firms. The market has shifted dramatically, and three forces are making economies of scope more valuable than ever:

1. Clients are watching every dollar - but they still need comprehensive solutions. They're looking for firms that can efficiently deliver multiple services without the big-firm overhead. That's our opening.
2. Technology is on our side. Today's collaboration tools make it easier than ever to systematize and share knowledge across service lines. What used to leak out of the firm can now be captured, refined, and reused.
3. Market consolidation creates opportunities. As larger consulting firms continue to merge and expand, there's growing demand for boutique alternatives that can provide depth AND breadth in specific domains. Clients are tired of choosing between massive generalists and narrow specialists.

This opportunity won't last forever. But firms that act smart now will build advantages that grow stronger over time.

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Your Next Move

If you've read this far, you probably see the potential in your own firm. Maybe you're Sarah, knowing you could serve your clients better but worried about losing focus. Maybe you're closer to John, feeling the strain of too many services and looking for a way back to excellence. Or maybe you're somewhere in between, sensing the opportunity but unsure how to move forward.

Here's what I know after helping dozens of boutique firms navigate this journey: the principles are simple, but the execution is nuanced. Every firm's path is different. That's why we created our Growth Orchestration service - to help firms like yours apply these frameworks in ways that fit your unique situation and ambitions. If you'd like to explore how these ideas could work in your firm, let's talk. The opportunity is real, but as with all strategic moves, timing matters.