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Consulting firms enjoy an unprecedented ‘Corona 19 Special’. This is a phenomenon that arose when large conglomerates developed new strategies for the future or reorganized their business structures in the wake of the new coronavirus infection (Corona 19). In the consulting industry, there is a backlash that “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 strategic roadmaps related to remote consumption, digital transformation and ESG (environmental, social, governance) management are increasing rapidly since last year. An LG Electronics official said: “Compared to before Corona 19, the consulting budget has increased by approximately 30%.” “We are working on projects related to digital transformation and post-crown strategy.” SK Hynix has also been receiving ESG and digital transformation consulting since last year.
Big 3 companies like Boston Consulting Group (BCG), Bain & Company, and McKinsey & Company are hiring labor to handle the casting company’s consulting requests. McKinsey Korea expanded its employees from 70 last year to more than 100. BCG and Bain & Company also plan to increase their employees, each with about 200 people. A senior consulting industry official said: “The number of sales and orders in both Big 3s increased by more than 30%.” One of the consulting firms said: “We will meet our annual targets before the end of the first quarter of this year.”
Increasingly, consultants are selected as CEOs or executives. A representative example is the hypermarket sector, which has been burned by the spread of remote 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 requesting help from consulting firms in all areas of corporate management, including business restructuring, supply chain management, distribution channel diversification, and labor outsourcing.” .
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E-Mart posted its first operating loss since its establishment in the second quarter of 2019. It was the sequel to a sharp decline in the number of consumers visiting hypermarkets due to the expansion of online shopping. E-Mart found a solution in the consulting industry. Hee-suk Kang, Bain & Company’s Consumer Goods and Distribution Sector Partner, was hired as a new representative.
Representative Kang made a new strategy based on “data” instead of “personal.” It drastically reduced the fashion stores that did not cost money and focused on fresh food. New store openings also took place mainly in warehouse-type stores. The result was a success. Even after the new coronavirus infection (Corona 19), E-Mart surpassed 20 trillion won (consolidated basis) in sales last year for the first time in history. Since late last year, Kang has also served as a representative for SSG.com and has led E-Mart’s online and offline business.
○ Consultant who became a relief pitcher for Corona
More and more companies are using consultants as “savings pitchers.” As the business environment changed rapidly due to the digital transformation and expansion of Corona 19, the demand for external experts increased. In recent years, it should be noted that the ranks of consultants who move to companies have increased. It is not a rookie executive in charge of practical matters, but a “C-level” position, the chief executive officer of each division, who determines the future direction of the business. Like E-Mart, there are companies that turn CEOs into consultants.
Lotte Group, which divides the distribution industry with Shinsegae, is also using consultants. In October last year, it was a sign that Kyung-woon Jung, former managing director of Boston Consulting Group (BCG), was hired as head of Lotte Shopping’s management strategy department. In November, a month later, Kang Sung-hyun, CEO of Lotte Nestle Korea, which belonged to the same consulting firm, was appointed as a representative of Lotte Mart. One industry expert predicted: “There is a joke that it is difficult to be successful unless you are a consultant in the distribution industry.” . “
The information technology (IT) industry, which has been hit hard by the digital transformation craze, is also a territory for consultants. It is explained that the demand for consulting CEOs is increasing rapidly due to the strength of knowing new technologies well 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 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), is also classified as CEO of consultants. Among the manufacturers, Park Heung-kwon, president of Hanwha General Chemicals, who had a career at McKinsey & Company, started out as a consultant and became the CEO of a large company.
○ The future strategy is also in charge of a consultant
Many of the strategy directors (CSOs) who are planning future strategies in the major conglomerates are consultants. A representative example is Hong Bum-sik, Chairman of the LG Group (Bain & Company) management strategy team, known as the first person hired 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 head of POSCO’s new growth division, are also leading consultant CSOs in the industry.
There are few cases in which the owners of large 3- to 4-year-old corporations build their careers in consulting firms. It is an analysis that a consulting firm is chosen as the first job because of the advantage of being able to quickly grasp the “big picture” of the industry and the economy. Among BCG graduates, Ki-sun Jeong, vice president of Hyundai Heavy Industries, and Jung-guk Hong, president of BGF, are famous. Hyosung Vice President Cho Hyun-sang, Vice President of Bain & Company, and Koo Bon-kwon, Senior Vice President of LS Nikko Copper Smelting, had careers at Accenture. Park Se-chang, president of Kumho Industries, worked in Kerney.
Seo Yong-gu, a professor in the Department of Business Administration at Sookmyung Women’s University, said: “In the period of great changes in industrial trends like these days, we need a person who can pioneer a path that has not been been visited previously. They are in the spotlight, ”he said.
Reporter Song Hyung-seok / Lee Soo-bin / Park Dong-hui [email protected]
