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Navigating rapid growth: overcoming common challenges faced by professional services firms

By Eleanor Berry
Insights

Navigating rapid growth: overcoming common challenges faced by professional services firms

By Eleanor Berry
Growth strategy
Navigating rapid growth: overcoming common challenges faced by professional services firms

The professional services industry has experienced remarkable growth in recent years. According to figures from Accountancy Age, 7 of the top 20 UK accountancy firms recorded growth of more than 20% over the last 12 months. Similarly, UK consulting sector grew on average 25% during 2022, according to analysis by the Management Consultancy Association.

However, fast growth is often accompanied by growing pains.

In a recent Meridian West webinar, I discussed the key challenges facing fast growth professional services organisations. We identified four main pain points associated with fast growth and how firms can best navigate these.

1: A lack of strategic clarity can stifle progress.

One of the biggest issues is that as organisations expand through both organic and inorganic growth, the speed of growth can start to outpace leaders’ capacity to effectively steer the ship. Many leaders grapple with the idea of changing the formula that led to their success. They assume that uninterrupted growth, without the strategic opportunity to pause, reflect and adapt, will inevitably yield further success. This is often not the case.

Key takeaways:

  • Recognise the need for adaptive leadership strategies during periods of fast growth.
  • Be open to refining successful formulas to align with evolving business landscape and client needs.
  • Take a holistic approach to planning for success, ensuring that there is clarity across the firm about strategy and vision.
  • Understand that perpetual growth is not universally positive; strategic planning and pause for reflection is essential.

2: Employee burnout and cultural anxieties may hinder internal success.

People and culture also represent a major pressure point for fast-growth firms. Employees often identify lack of capacity and strained work-life balance as a key indicator of discontent. As teams expand, preserving organisational culture can become increasingly challenging, and if this is not proactively managed, then employee satisfaction can dip.

Embracing a holistic approach that involves internal reflection and capturing both employee and client feedback allows fast-growth organisations to pinpoint and address the root causes. By fostering an environment of open communication and engagement, organisations can encourage employees to actively participate and contribute to the growth of the organisation.

Key takeaways:

  • Prioritise employee wellbeing to mitigate talent burnout.
  • Foster a positive and adaptable company culture, and continue to champion and celebrate this as the organisation grows.
  • Implement strategies to address and reduce staff discontent.
  • Establish an open communication environment to encourage employee engagement and trust in leadership.

3: Inconsistent client service can lead to declining client experience.

While chasing growth, firms often struggle to maintain consistent levels of client service. Some of these key challenges are rooted in lack of responsiveness, employee churn, and misalignment on expectations of what constitutes exceptional client experience.

Comprehensive client journey mapping and strategic account management are useful tools to seamlessly integrate service offerings. They provide simple frameworks to help teams understand how to work more effectively together, and provide a seamless service experience for clients. This emphasis on internal alignment proves important not only for mitigating challenges but also for defining and solidifying the distinct experience of being a client within the organisation.

Key takeaways:

  • Rapid growth can inadvertently lead to a decline in client service, and leaders are too internally focused.
  • Challenges associated with client service basics typically result in a disjointed and unsatisfactory client experience, putting future revenue growth at risk.
  • Implement tools to formalise processes and address challenges linked to maintaining consistent client experiences.
  • Setting clear expectations for both clients and employees Is crucial in mitigating these challenges and enhancing the overall client experience.

4: Legacy systems frustrate scalability aspirations and lead to unsustainable delivery.

Outdated operations and processes frequently fail to keep pace with the needs of fast growth firms. The challenge arises in updating systems and processes while not compromising on client experience.  Instead of leaving critical experience to chance, firms need to proactively invest time in new technology, competency frameworks and the standardisation of processes.

Key takeaways:

  • Outdated systems and processes can often lag behind growth.
  • Prioritise technological updates alongside service delivery improvements to maximise efficiency of time and investment requirements.
  • Implement competency frameworks and the standardisation of processes for efficient scalability.
  • Invest time in modernising processes to match business growth.

While growing pains are inevitable, Meridian West’s experience working with fast-growth professional services and B2B firms suggests that tackling these challenges head on is essential for sustaining healthy growth over the long-term.