Service and consultancy companies

STRATEGY WORK FOR SERVICE AND CONSULTING COMPANIES: HOW TO SUCCEED

Why is strategy work particularly challenging for service and consulting companies?

Service and consulting companies sell expertise, problem-solving, and transformation. You help your clients develop, change, and grow. But that's precisely why strategy work is more complex than in many other industries.

The difference lies in what you deliver. When a manufacturing company sells a product, it's concrete, visible, and easy to measure. Quality can be checked before delivery. When you deliver a consulting service, an audit, a design solution, or legal advice, the value is often only visible afterwards, when the client has achieved their results.

This creates three specific challenges that strategy must address:

Challenge 1: Value becomes visible late and is difficult to quantify

An audit firm doesn't just deliver a report. They deliver security, regulatory compliance, and a basis for important decisions. A management consultant doesn't just deliver an analysis. They deliver insights that can change the entire company's direction. A design agency doesn't just deliver a graphic profile. They deliver brand identity that affects the client's business for years.

But how do you measure the quality of this? How do you know if you delivered exceptionally or just adequately? It's harder than measuring whether a product meets the right specifications.

Challenge 2: Every assignment is unique

A consulting assignment at one client differs from the next, even if they seem similar. Clients' organizations, challenges, and conditions vary. An implementation of a new business system can take three months at one client and nine months at another, even though the companies are the same size.

This makes resource planning complex. How do you know how many consultants you need next quarter when each project develops differently? How do you build a pipeline when you don't know exactly how long each delivery will take?

Challenge 3: Your employees carry the competence

In a service company, the competence, the relationship with the client, and the understanding of the industry are tied to individuals. If a senior consultant leaves, they take with them knowledge built up over years. Client relationships may also disappear.

When a production manager leaves a factory, the machines, routines, and products remain. When a senior partner leaves an audit firm, both clients and juniors' learning can disappear.

These three challenges mean that strategy work must be designed differently. Strategy cannot only focus on sales and finances. It must systematically handle quality, competence, client relationships, and delivery capacity.

The five critical areas for strategy work in service companies

To succeed with strategy work in service and consulting companies, you need clear goals and measurable progress in five areas. These five perspectives are interconnected. If you only focus on some of them, the strategy risks failing.

1. Market understanding: Who is your ideal client and why do they choose you?

Many service companies take assignments from everyone who asks. It feels right, especially when clients are scarce. But it leads to building competence in too many areas, your positioning becoming unclear, and profitability varying greatly between different assignments.

A strong strategy begins with understanding which clients you create the most value for, and focusing there.

Questions the strategy must answer:

• Which clients have given us the highest profitability over the past three years, and what do they have in common?

• Which problems do we solve so well that clients actively recommend us?

• In which segments is the market growing and where do we have the greatest chance to win?

• What makes a client choose us over our competitors?

Example: A management consulting company with 25 employees worked with clients across many industries. They did everything from strategy work to project management to process improvement. When they analyzed profitability, they saw a clear pattern. 80 percent of their profit came from 20 percent of the clients. These clients were all in the manufacturing industry and all assignments involved improving production efficiency.

They made a strategic decision to focus. They defined their goal: "Become the leading consulting firm for production efficiency in manufacturing companies in Central Sweden." They stopped actively seeking assignments outside this. They built deeper expertise. They began writing articles and holding seminars specifically about production efficiency.

The result after two years: Revenue had increased by 45 percent despite fewer clients. Profitability increased by 35 percent. Consultants experienced work as more meaningful because they became really good in their area.

Concrete actions to strengthen market understanding:

• Analyze all assignments from the past three years. Sort by profitability, not just revenue. Look for patterns.

• Interview your five best clients. Ask why they chose you, what they value most, and what would make them recommend you.

• Define two to three target segments where you will grow. Describe them concretely: industry, size, geographic reach, type of challenge.

• Decide what you will say no to. It's as important as knowing what to say yes to.

Measure progress:

• Share of new clients coming from your prioritized target segments

• Net Promoter Score (NPS) from your existing clients

• Number of incoming inquiries from the right type of clients

2. Sales: From reactive to proactive sales process

Many consulting and service companies build their sales on repeat clients and referrals. It works well when times are good and clients are satisfied. But it creates vulnerability.

When the economy turns, when a major client unexpectedly terminates the collaboration, or when the market changes rapidly, you suddenly have no pipeline. You have no ongoing dialogues with potential new clients. Then it takes six to twelve months to rebuild sales.

A strategic sales process means that you proactively build relationships and have continuous dialogues with potential clients, even when you're fully booked.

Questions the strategy must answer:

• How long is our average sales cycle from first contact to signed contract?

• How many active prospects do we need in the pipeline to reach our revenue goals?

• What are our three most important channels for contacting new potential clients?

• How many new client meetings does each consultant conduct per month, and what is the conversion rate?

Example: An IT consulting company with 40 employees lived on a loyal client base. 85 percent of revenue came from five clients they had worked with for many years. It felt secure. The consultants were fully booked. Then they received news. One of the major clients, accounting for 30 percent of revenue, had decided to build their own IT department. The collaboration would end in six months. The company had no pipeline. They had no ongoing dialogues with potential new clients. They panicked. They started calling around, sending proposals, attending networking meetings. But the sales cycle for their type of assignment was six to nine months. Meanwhile, they had to lay off three employees and profitability plummeted. They learned. They set a strategic goal: "We must always have at least ten active dialogues with potential new clients, even when we're fully booked." They defined what an "active dialogue" meant: at least one meeting where the client's needs were discussed and follow-up was scheduled. They distributed responsibility. Each senior consultant would have two ongoing dialogues. The sales manager would have four. The CEO would focus on the largest potential clients. They created a simple process. Every Monday they had a 15-minute meeting where they reviewed the pipeline. Which meetings are scheduled? Which proposals are out? What needs to be followed up? Two years later, they again received news that a major client would reduce the scope of the collaboration. This time they had a pipeline with twelve active prospects. Three of these became new clients within six months. Revenue only dropped five percent instead of thirty percent.

Concrete actions to build a strategic sales process:

• Map your actual sales cycle. How long does it take from first contact to signed contract? Count in weeks.

• Calculate how many prospects you need in the pipeline. If your conversion rate is 20 percent (one in five meetings becomes a client) and you need three new clients per quarter, you need at least 15 active dialogues.

• Distribute responsibility. Each person who can sell should have a number of active dialogues as a goal.

• Create a weekly routine to follow up the pipeline. Keep it short, max 15 minutes, but do it every week.

• Define what counts as a "qualified prospect." Not everyone who shows interest is the right client.

Measure progress:

• Number of active prospects in the pipeline each month

• Number of new client meetings per consultant per month

• Conversion rate from meeting to proposal to close

• Average sales cycle in weeks

3. Operations: Quality and efficiency in delivery

In many service companies, the operations perspective is undervalued. "We deliver consulting services, what is there to make more efficient?" is a common attitude. But this is often where the greatest improvement potential lies.

The operations perspective is about how you deliver your services. How do you ensure that quality is consistent regardless of who performs the work? How do you use your time? Which internal processes steal time from value-creating work?

Questions the strategy must answer:

• How much variation is there in delivery quality and time between different consultants doing similar assignments?

• Which internal processes take unnecessary time from billable work?

• How do we share knowledge and best practices so everyone can learn from the best?

• What tools and methods do we use to deliver better and faster?

Example: An audit firm with 30 employees saw that processing time for similar assignments varied enormously. An annual report for a company with 50 employees could take 40 hours with one auditor and 65 hours with another. Quality was comparable, but time varied by 60 percent. They investigated why. It turned out that experienced auditors had built up their own templates, checklists, and routines over the years. They knew exactly which questions to ask, which documents they needed, and how to structure the work. New auditors started from scratch every time. The company set a strategic goal: "All standard assignments should have documented processes and templates that reduce variation in processing time to under 20 percent." They mapped the process for the most common assignment types. They documented working methods, created checklists, and built templates. They introduced recurring learning meetings where experienced auditors shared their best methods. After one year, variation had decreased from 60 percent to 18 percent. Profitability increased by 22 percent. New hires became productive much faster. Clients received more predictable deliveries.

Concrete actions to improve operations:

• Map your entire delivery process from first client contact to completion and invoicing. Draw it out. Where does it take the longest?

• Identify your three most common assignment types. Document how the best consultants work with these.

• Create templates and checklists for standard assignments. This frees mental space for what's unique in each assignment.

• Measure billability per consultant. What proportion of work time goes to billable work? What steals time?

• Introduce routines for knowledge sharing. Monthly lunch where someone shares a lesson from a project.

Measure progress:

• Average processing time for standard assignments

• Variation in processing time between consultants

• Billability per consultant and on average

• Time from completion to invoicing

• Number of documented processes and templates

4. Employees: Competence, development, and well-being

In service companies, employees are not just a resource. They are the delivery. Their competence, motivation, creativity, and relationship skills determine how well you can deliver to clients.

Yet the employee perspective is often treated as secondary in strategy. "We work with that too, but the most important thing is getting assignments." That's a dangerous thought. If employees don't feel well, don't develop, and don't feel engaged, sales and delivery will suffer.

Questions the strategy must answer:

• What competencies do we need to build to reach our strategic goals within three years?

• How do we retain our best employees when competitors try to recruit them?

• How do we create a culture where knowledge is shared instead of kept in silos?

• How do we ensure employees don't burn out in the pursuit of billable hours?

Example: A design company with 18 employees saw that employee turnover was 25 percent per year. This means that every other year, half the company had been replaced. The cost was enormous. Each new employee took six months to get into the work. Meanwhile, senior designers had to spend time mentoring instead of billing. Client relationships were disrupted when their contact person left. Management saw it as "that's how it is in the industry." But when they calculated the costs, they were shocked. Each employee who left cost an average of 400,000 kronor in recruitment, training, and lost productivity. They decided to do something about it. They set a strategic goal: "Reduce employee turnover to under 10 percent per year." They started by understanding why people left. They conducted exit interviews and anonymous surveys. The patterns became clear. People left because:

• They saw no clear career path. What was the next step?

• They received too little feedback and development. They didn't know if they were good or mediocre.

• Workload was uneven. Some periods were chaotic, other periods were empty.

The company did three things. They created clear career paths with steps from junior to senior to lead designer. They introduced quarterly meetings where each employee received structured feedback and set development goals. They began planning projects better to even out the workload. After two years, employee turnover was down to 8 percent. Employee satisfaction had increased from 6.2 to 8.1 out of 10. Productivity increased because fewer resources went to training. Clients experienced higher continuity.

Concrete actions to strengthen the employee perspective:

• Conduct employee surveys at least twice a year. Measure not just satisfaction but also development opportunities, leadership, and workload.

• Create clear career paths. Draw out the steps from junior to senior. What's required to take the next step?

• Introduce structured development meetings each quarter. Not just salary discussions once a year.

• Map competence needs. What competencies do you need in three years to reach your strategic goals? Start building them now.

• Follow up on workload. How many hours do people work on average? How many are overtime? What signs are there of burnout?

Measure progress:

• Employee turnover per year

• Employee satisfaction (NPS or index)

• Time from recruitment to full productivity

• Number of development meetings conducted

• Average working time per week

5. Finance: From hourly billing to value-based profitability

Many service companies get stuck in the hourly billing model. You calculate an hourly cost, add a margin, and bill the client per hour. It feels fair and transparent.

But it puts a cap on your profitability. You can only bill as many hours as you have. If you become more efficient and solve the client's problem faster, you get paid less, not more. It punishes productivity.

The finance perspective in strategy should challenge this. How can you increase revenue and profitability without just increasing the number of billable hours?

Questions the strategy must answer:

• What is our actual profitability per client, not just revenue?

• Which services or assignment types have the highest margin?

• Can we package any service and price it value-based instead of per hour?

• How can we increase revenue per employee without increasing working hours?

Example: A PR agency with twelve employees billed all assignments per hour. They had four different hourly rates depending on seniority. The model felt transparent and the client knew exactly what they were paying for. But the agency saw a problem. When they got better and more efficient, when they had reusable templates and processes, they got paid less for the same value. A press release that took eight hours the first time took only three hours the sixth time. But the value to the client was the same, perhaps even higher because the agency knew exactly how to angle it. They decided to test something different. They selected three services they delivered often: launching a new product, crisis management, and ongoing PR support. They packaged these at fixed monthly prices based on value, not hours. For the launch package, they didn't charge for how many hours it took. They charged for the result: a completed launch with press events, articles in relevant media, and clear key messages. The price was 120,000 kronor. The first time they delivered, it took 85 hours. At 1,500 kronor per hour, they would have billed 127,500 kronor. So the margin was similar. But the tenth time they delivered the same package, it took only 45 hours. They still billed 120,000 kronor, but the margin became much higher. Clients were satisfied. They knew the price in advance. They didn't have to micromanage hours. They paid for value. After two years, the agency had switched to fixed prices for 60 percent of their assignments. Revenue per employee had increased by 35 percent. Profitability had increased by 28 percent. Consultants experienced less stress because they didn't need to report every hour.

Concrete actions to improve the finance perspective:

• Analyze profitability per client and assignment type. Use actual time spent, not just billed hours.

• Identify your three most recurring services. Can these be packaged and priced fixed?

• Calculate revenue per employee. Set a goal to increase it by 15-20 percent without increasing working hours.

• Review your pricing. Have you raised prices in line with inflation and competence increases?

• Follow up payment times. How long does it take from invoice to payment? Can you shorten it?

Measure progress:

• Profitability per client (not just revenue)

• Revenue per employee

• Share of assignments with fixed price versus hourly price

• Average payment time

• Gross margin per assignment type

How to keep strategy alive in everyday life

The biggest problem in service companies is not creating a strategy. It's keeping it alive when everyday life arrives. Urgent client matters always take priority. Burning issues must be solved now. Strategic efforts can wait until next week, next month, next quarter.

To avoid this, you need to create structure and rhythm that makes strategy part of everyday life, not something that happens on the side.

Create a monthly strategic rhythm. Have a fixed meeting each month where management reviews the five perspectives. Book it for the whole year. Make it non-negotiable. The purpose is not to report numbers. The purpose is to discuss: Are we moving in the right direction? What have we learned? What needs to be adjusted?

Structure the meeting like this:

• 10 minutes: Review the status for each perspective. Use traffic lights: green, yellow, red.

• 30 minutes: Discuss the perspective that is red or most critical right now. What's the problem? What needs to be done?

• 15 minutes: Decide concrete activities for the next month. Who does what? When should it be done?

• 5 minutes: Document the decisions so everyone knows what will happen.

Connect the individual's goals to strategy

Every consultant, every employee should understand how their daily work contributes to strategic goals. It creates meaning and engagement.

Take a concrete example. If your strategic goal in sales is to "build a pipeline with at least ten active prospects," each senior consultant's individual goal can be "have two ongoing client dialogues each month."

If your strategic goal for employees is to "increase employee satisfaction to 8 out of 10," each manager's goal can be to "conduct development meetings with everyone on the team each quarter." Make the connection clear. When you discuss individual goals, show how they contribute to the bigger picture. Measure the right things: Focus on leading indicators. Many companies only measure results. Revenue, profit, number of new clients. These are important numbers, but they're lagging. When revenue drops, the problem is already a fact. Focus instead on leading indicators. These are things you can influence now that lead to results later.

Examples:

• Leading: Number of new client meetings per month → Result: Number of new clients per quarter

• Leading: Employee satisfaction → Result: Employee turnover

• Leading: Number of prospects in pipeline → Result: Revenue next quarter

• Leading: Share of clients in target segment → Result: Profitability

• Leading: Number of development meetings conducted → Result: Competence level

If the leading indicators point in the right direction, results will follow.

Visualize progress so everyone sees it

Strategy must not be something only management knows about. It must be visible to everyone. Use a simple dashboard or board where everyone can see the status for the five perspectives. The traffic light system works well:

• Green: Prerequisites exist, we're on the right track

• Yellow: Something needs to be addressed, we must prioritize this

• Red: Critical situation, requires immediate action

Update the board every month. Let people see progress. When something turns green, celebrate it. When something turns red, be transparent about what's being done. Create learning meetings after each project

After each completed project, have a short meeting to capture lessons. Not to find scapegoats, but to get better.

Three questions are enough:

• What worked well? What should we continue doing?

• What worked poorly? What should we stop doing or change?

• What did we learn that we should share with others in the company?

Document the answers. Share them broadly. Otherwise, you'll make the same mistakes over and over.

Three common mistakes to avoid

Mistake 1: Strategy that only focuses on sales and finance

It's easy to focus on what's easiest to measure. Sales figures and profit are clearly visible. But if you only set goals there and ignore the other perspectives, it becomes unsustainable. If employees are burned out, sales will fall. If delivery quality drops, clients will disappear. If you don't understand your market, you'll lose relevance. The five perspectives are interconnected. Strategy must balance all.

Mistake 2: Too many goals at once

In small and medium-sized service companies, resources are limited. If you set 15 strategic goals, nothing will be done properly. Focus gets scattered. Energy disappears. Choose three to five really important goals. One or two per perspective. Focus there. When they're achieved, you can set new ones.

Mistake 3: No connection between strategy and everyday decisions

When strategy lives in a document that's read once a year, it doesn't work. Strategy must be present when you make decisions.

Example: A client contacts you with a large assignment. It's outside your target segments, but it's a lot of money. What do you do? Without a living strategy, you take the assignment. With a living strategy, you pause and ask: Does this support our strategic goals? Will it take resources from what we should actually focus on? Sometimes the answer is yes, take the assignment anyway. But at least you've asked.

Tools that support strategy work

To keep strategy alive and visible, most companies need some form of system. It can be simple or advanced depending on your needs.

Options:

• A project tool like Asana, Monday, or Trello to track activities and responsibilities

• A CRM system like HubSpot, Pipedrive, or Salesforce to track the sales pipeline and client relationships

• A strategy tool like GoalEnvision, Cascade, or Perdoo to hold together the five perspectives, track progress, and visualize traffic lights

• A simple Excel sheet and monthly meetings if you want to keep it simple

What's important is not which tool you use. What's important is that strategy becomes visible, measurable, and part of everyday life.

Your way forward

Strategy work in service and consulting companies requires focus on five perspectives: market understanding, sales, operations, employees, and finance. All five are interconnected. If you only focus on some of them, the strategy risks failing.

Start here, step by step:

Step 1: Identify which perspective is weakest today

Go through the five perspectives. Where are you strongest? Where are you weakest? Start with the weakest. That's where you'll get the greatest effect from your efforts.

Step 2: Set one to two concrete goals within that perspective

Choose goals that are measurable and time-bound. Not "improve client satisfaction" but "increase NPS from 35 to 50 within twelve months."

Step 3: Define prerequisites that must exist

What's required to reach the goal? What structure, capability, and energy are needed? Define two to three critical prerequisites per goal.

Step 4: Create a monthly rhythm for follow-up

Book monthly strategy meetings. Make it non-negotiable. Follow up on status, discuss problems, and decide on next steps.

Step 5: Make progress visible to the entire team

Create a simple dashboard or board. Use traffic lights. Let everyone see the status. Update every month.

Strategy work is not about creating the perfect document that then sits in a binder. It's about every day, every week, every month taking small steps in the right direction within all five perspectives. It's about adjusting when reality demands it. It's about keeping focus on what truly creates value for your clients and for your employees.

Start today. Choose a perspective. Set a goal. Take the first step.