From Boutique to Enterprise: Structuring a Growing Consulting Firm

Consulting businesses grow by dividing into smaller units to stay organized and efficient. These units manage their own budgets and must balance size—smaller units are agile but resource-limited, while larger ones can handle big projects but risk bureaucracy. Beyond size, companies also organize around clients, industries, or competencies. Some focus on client types, like startups or global enterprises, while others specialize in industries like healthcare or finance, or areas of expertise like strategy or analytics. Finding the right structure ensures efficiency, agility, and the ability to meet client needs as the business scales.

Balancing Agility and Scale in Business Units

As organizations grow, they face a trade-off between agility and the benefits of scale. Smaller units are better at quick decision-making, clear communication, and adapting to changes, but they may lack the efficiency and resources needed for large, complex projects. Larger units, on the other hand, can pool resources, standardize processes, and handle high-impact work, but they risk slower decision-making, added bureaucracy, and reduced flexibility.

The optimal size of a unit also depends on the size of the company. Larger organizations can afford to build larger units because they have the infrastructure to support them and can absorb some degree of complexity without losing efficiency. Smaller organizations, on the other hand, may need to keep units more compact to maintain focus and agility. Structuring units with clear accountability and ensuring alignment with shared resources helps balance agility and scale, allowing growth without being weighed down by inefficiency or inertia.

Small founder-led consulting businesses are effective (5-30 people)

When you’re a boutique consultancy with, say, 5-30 people, you have a good chance to run a very effective operation. That’s usually because the founders of the company are still growing the business together with the team. These teams are often effective, and working might feel like spending time with a band of old friends. Some companies choose to remain this size, and it’s understandable. Boutique consultancies are very profitable at best, providing a great and intimate working experience for people involved. However, what boutique consultancies lack, is scale, and being able to take on larger client assignments. That's why some choose to scale further.

The growing business (30-80 people)

Once your business grows past 30, 50, and finally to 80 people, you’ve reached a milestone, where it’s impossible for people to really know everyone working in the company. There’s not enough time to be spent with everyone. Consultancies are still often very manageable in terms of the amount of personnel, amount of projects, and HR-related matters. However, complexity creeps in bit-by-bit, and you might need a person to be in charge of finances, someone for HR and so on. It’s especially tough, since you’re not enjoying the scale benefits of having many more billable FTEs compared to non-billable ones.

Being at this point, if your team is still in one location, it might make sense to have only one profit & loss unit, but in case you venture into new geographies, you should think of incentivizing these teams separately, giving them them more autonomy and responsibility on driving the business in a new market. We don't think you should be too strict in dividing the company into line/competence-based units yet. The team will benefit from having cross-functional teams, and that's part of remaining nimble.

The small big consulting business (80-200 people)

A consulting business that has 80-200 people starts to resemble an actual business. You start having multiple offices and geographical focuses, most likely you’re employing many different types of experts, and you’re engaging in larger projects with multiple billable FTEs working in the client assignments at once. These are the scale benefits we discussed earlier. It’s easier to rationalise hiring a staffing manager when they can be in charge of 100 people at once, as opposed 20 people. That’s 1% vs. 5% of bottom line impact.

Having a consulting business this size is something to strive for, but might also prove to be tough size to remain at. Most likely, many people who were part of the company in the beginning have left or start leaving, and if you’re not able to recruit and sell more than the leaving people, you can’t grow organically. Additionally, when the original crew leaves, a cultural void is created. A consulting company’s culture is the sum of its people, and at this point the culture needs to renew itself.

More or less, what a consulting business needs to do a this stage is to ensure longevity and set the stage for next level of growth. This can be achieved by growing more aggressively (acquisitions), or focusing heavily on the retention of your employees. The best way would obviously be just to sell more projects and grow organically, but also recruiting for the new roles with an ever growing pace, might become challenging. Many companies choose to grow through acquisitions.

This is the first time many copanies think of dividing their company into functions-based units like the design team, PMO team, development team and so on. In some cases this might be the right thing to do. However, having different geographical sites makes the organizational puzzle building

The mid-sized consulting business (200-2000 people)

This is a large bracket in terms of headcount. At this point your company has divided into multiple different units and geographies. There's most likely multiple different types of competencies in your company, and you're running a matrix organization. As mentioned earlier, how big your teams should be, is highly dependant of the size of the company. In larger businesses teams can be hunderds of consultants, while in smaller ones, you might have teams with tens of people in each.

A matrix organization combines functional and geographic reporting lines to balance global expertise with local responsiveness. In this structure, employees often have more than one line manager, such as a functional manager responsible for their professional development and a geographic or project manager overseeing regional or specific business goals. While this model enhances flexibility and collaboration, it can also create challenges, such as managing conflicting priorities and coordinating among multiple reporting lines.

An additional aspect to unit size comes to play at a mid-sized consulting business, and that is how to organize the company. There are multiple domains a consulting company can organize themselves around, and as mentioned, there might be more than one team the person belongs to. Here are some examples to divide the consulting business into units.

1. Industries: Focus on sectors like finance, healthcare, or technology to tailor services to specific challenges.
2. Competencies: Specialize in areas like strategy, data analytics, or supply chain for domain-specific expertise.
3. Geographies: Structure by regions or countries to address local market needs and regulations.
4. Client Segments: Group clients by size, such as startups, mid-sized businesses, or global enterprises.
5. Service Offerings: Align around categories like IT consulting, HR advisory, or management consulting.
6. Project Types: Organize by engagement nature, such as long-term transformations or rapid diagnostics.
7. Partnership Ecosystems: Focus on key technology or platform alliances like AWS, Salesforce, or SAP.

The enterprise consultancy (2000+ people)

The enterprise consultancy is just a larger version of a mid-sized consulting business. Enterprise-sized consulting firms rely heavily on operational synergy to sustain their vast scale and manage complexity. Specialized roles, standardized processes, and advanced systems enable them to deliver consistent, high-quality services across the globe. Synergy is achieved through the integration of functional and geographic units, creating economies of scale and allowing large teams to tackle multi-year transformation projects seamlessly. However, the reliance on standardized workflows and multi-layered management introduces challenges such as slower decision-making and reduced flexibility. As companies grow, achieving a balance between maintaining their agility and leveraging operational efficiency becomes the cornerstone of sustainable success.

This is the category with the most variation spanning companies like Bain & Company (15,000 employees), KPMG (260,000 employees), and Accenture (700,000 employees). There's no one-size-fits-all recipes in this category. Some companies are under one brand like Accenture, and others tend to only be umbrella companies only integrating the finance systems of their sub-brands (like Infosys). Let's look at these different strategies on a high level.

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Operational Efficiency: Unified vs. Decentralized Integration

Unified Integration Strategy (e.g., Accenture)

Pros:

1. Efficiency Through Standardization: Centralized processes and shared infrastructure reduce redundancies and enhance consistency.
2. Synergy Across Teams: Unified systems encourage collaboration and resource-sharing across functions and geographies.

Cons:

1. Reduced Agility: Centralization can slow decision-making and hinder responsiveness to local needs.
2. One-Size-Fits-All Challenges: Standardized solutions may not always align with specific regional or client requirements.

Decentralized Integration Strategy (e.g., Infosys)

Pros:

1. Flexibility and Local Adaptation: Independent units can quickly tailor operations to market-specific needs.
2. Focused Expertise: Decentralized teams often build deep knowledge in niche areas or regions.

Cons:

1. Inefficiencies and Redundancy: Separate operations can duplicate efforts and increase costs.
2. Coordination Complexity: Collaboration across loosely integrated units can be challenging, reducing overall synergy.

Summary

Consulting businesses evolve significantly as they grow, shifting from small, founder-led operations to global enterprises. Growth necessitates dividing the company into units that act as independent profit and loss centers, balancing agility with scale. Smaller units excel in adaptability and clear communication, while larger units offer resource pooling and efficiency but risk bureaucracy and slower decision-making. This evolution affects how companies organize—by geography, industry, or competencies—shaping their operational focus and capacity to handle larger projects.

Mid-sized consultancies (200–2,000 employees) face challenges in maintaining cultural cohesion while leveraging economies of scale. They often adopt matrix structures to balance functional expertise and geographic demands. Enterprise-level firms (2,000+ employees), such as Accenture and Infosys, rely on integration strategies to sustain global operations. Unified systems like Accenture's foster efficiency and synergy but may lack flexibility, while decentralized models like Infosys's offer local adaptation at the cost of coordination and redundancy. Achieving a balance between agility and operational efficiency remains critical for sustainable growth at all stages.