Consulting companies are enjoying an unprecedented’Corona 19 special’. This is a phenomenon that emerged as major conglomerates made new strategies for the future or reorganized their business structures in the aftermath of the novel coronavirus infection (Corona 19). In the consulting industry, there is a reaction saying, “The biggest boom in 20 years since the dot-com craze in the early 2000s.”
According to related industries on the 23rd, since last year, companies requesting non-face-to-face consumption, digital transformation, and ESG (environmental, social, governance) management-related strategic roadmaps are increasing rapidly since last year. An official from LG Electronics said, “Compared to before Corona 19, the consulting budget has increased by about 30%.” “We are working on projects related to digital transformation and post-corona strategy.” SK Hynix has also been receiving ESG and digital transformation consulting since last year.
‘Big 3’companies such as Boston Consulting Group (BCG), Bain & Company, and McKinsey & Company are recruiting manpower to handle the pouring company’s consulting requests. McKinsey Korea expanded its employees from 70 last year to more than 100. BCG and Bain & Company are also planning to increase their employees, each with around 200 people. A senior official in the consulting industry said, “The number of sales and orders in both Big 3 increased by more than 30%.” One of the consulting firms said, “We will meet our annual target before the end of the first quarter of this year.”
Increasingly, consultants are scouted as CEOs or executives. A representative example is the hypermarket sector, which has been burned out due to the spread of non-face-to-face consumption. Kang Hee-seok, president of E-Mart, is from Bain & Company, and Kang Seong-hyun, president of Lotte Mart, is from BCG. An industry insider said, “We are asking for help from consulting companies in all areas of corporate management, including business restructuring, supply chain management, distribution channel diversification, and manpower outsourcing.”
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E-Mart posted its first operating loss since its founding in the second quarter of 2019. It was the aftermath of a sharp decline in the number of consumers visiting hypermarkets due to the spread of online shopping. E-Mart found a solution in the consulting industry. Hee-suk Kang, a partner in the consumer goods and distribution sector of Bain & Company, was recruited as the new representative.
Representative Kang made a new strategy based on’data’ rather than’persimmon’. It drastically reduced the fashion stores that didn’t cost money and focused on fresh foods. New store openings were also conducted mainly in warehouse-type stores. The result was successful. Despite the aftermath of the novel coronavirus infection (Corona 19), E-Mart surpassed 20 trillion won (consolidated basis) in sales last year for the first time in history. Since the end of last year, Kang has also served as the representative of SSG.com and has been leading E-Mart’s online and offline business.
○ Consultant who went on to become a Corona relief pitcher
More and more companies are using consultants as’saving pitchers’. As the business environment rapidly changed due to the digital transformation and the spread of Corona 19, the demand for external experts surged. In recent years, it is noteworthy that the ranks of consultants moving to companies have increased. It is not a beginner executive in charge of practical affairs, but a position of’C-level’, the chief executive of each division, who determines the future business direction. Like E-Mart, there are companies that convert CEOs into consultants.
Lotte Group, which is dividing the distribution industry with Shinsegae, is also using consultants. In October of last year, it was a sign that Kyung-woon Jung, a former managing director of the Boston Consulting Group (BCG), was recruited as the head of the management strategy department of Lotte Shopping. In November, a month later, Kang Sung-hyun, CEO of Lotte Nestle Korea, who was from the same consulting company, was appointed as the representative of Lotte Mart. An industry insider predicted, “There is a joke that it is difficult to succeed unless you are a consultant in the distribution industry.” “There is a high possibility that the head of Lotte’s online channel’Lotteon’ will also return to a former consultant.”
The information technology (IT) industry, which has been specially hit by the digital transformation fever, is also a territory for consultants. It is explained that the demand for consultant CEOs is increasing rapidly because of the strength of being familiar with new technologies and having a wide range of skills. In particular, there are many cases of entrusting the position of the Korean branch of a global company to a consultant. CEO Ji-eun Lee (Accenture), who became the CEO of Microsoft Korea (MS) last year, Ki-Hong Song, CEO of IBM Korea (Deloit), Bum-koo Cho (CEO of Cisco Korea) (Accenture), and Sung-yeol Lee, CEO of SAP Korea (PwC), are also classified as CEOs from consultants. Among manufacturers, Park Heung-kwon, president of Hanwha General Chemicals, who had a career at McKinsey & Company, started as a consultant and became the CEO of a large company.
○ Future strategy is also in charge by a consultant
Many of the chief strategy officers (CSOs) who are planning future strategies at major conglomerates are consultants. A representative example is Hong Bum-sik, president of LG Group’s management strategy team (Bain & Company), known as the first person recruited by LG Group chairman Kwang-mo Koo in 2018. Young-jo Ji (McKinsey), who leads the strategic technology division at Hyundai Motors, and Gyu-suk Oh (Vice President of Bain & Company), who is active as the head of POSCO’s new growth division, are also CSOs from leading consultants in the industry.
There are not a few cases where large corporation owners 3-4 years old build their careers in consulting companies. It is an analysis that a consulting company is selected as the first job because of the advantage of being able to quickly grasp the’big picture’ of the industry and economy. Among BCG graduates, Ki-sun Jeong, vice president of Hyundai Heavy Industries, and Jung-guk Hong, president of BGF, are famous. Hyosung Vice Chairman Cho Hyun-sang, Vice Chairman of Bain & Company, and Koo Bon-kwon, Senior Vice President of LS Nikko Copper, had a career in Accenture. Park Se-chang, president of Kumho Industries, worked at Kerney.
Seo Yong-gu, a professor at the Department of Business Administration at Sookmyung Women’s University, said, “In this period of great change in industrial trends like these days, we need a person who can pioneer a path that has not been taken before.” “I was looking for a person who could transplant a new paradigm without being buried in internal logic. Are in the limelight,” he said.
Reporter Song Hyung-seok/Lee Soo-bin/Park Dong-hui [email protected]