When the economic crisis of the late noughties sent shockwaves through Europe, many of the continent’s inhabitants steeled themselves for an undefined period of monetary gloom; ruminating on the dizzying escalation of house prices, and merrily blaming bankers for most of life’s ills. In Spain, however—beleaguered business owners weren’t content to let a tiny hiccup like an economic meltdown crush their dreams of growth and prosperity. With the domestic economy looking wholly uninspiring, a handful of innovative clients echoed the entrepreneurial spirit demonstrated by Spanish explorer, Juan Díaz de Solís, in 1516—and set sail for Latin American shores.
The former colonies held many attractions for Spanish clients. The obvious commonalities in language and culture, a steady supply of steak and Malbec, and burgeoning economies, revitalised after the great economic depression. Of course, where clients lead, consultants are quick to follow, and firms were more than happy to shadow their clients in this new venture—Improved profit margins! Economic growth! Air miles! Naturally they were on a plane to the Southern Hemisphere, quicker than you could say “business class lounge.”
With the benefit of hindsight, it’s easy to say that Spanish clients were excessively bullish in respect of the long term prospects in Latin America. When the financial crisis of 2008 hit, Mexico’s economy was the hardest hit in the region. Although the country enjoyed a swift recovery, the signs of volatility were there from the start. Nonetheless, Spanish clients—supported by newly relocated consultants—remodelled their businesses, ensuring their glittering new operations in the Americas were at the core.
Unfortunately for our enterprising Spaniards, that irksome truism: “If something looks too good to be true, it probably is”, proved particularly apt in Argentina. Government officials—keen to hide the scale of Argentina’s huge debts to American hedge funds and propensity to default on loans—were fiddling statistics, in a bid to hide a reality of stagnant growth. Things weren’t looking much brighter in Mexico,where a weak peso and low oil prices put a dampener on the economy, and dented consumer confidence.
In writing this year’s Spanish consulting CMP report, we discovered Spanish clients—and the consulting firms that work alongside them—are at a crossroads. Just as the wheels are coming off the Latin America gravy train, so growth has returned to the domestic economy. Not just growth, but stellar growth that has propelled Spain to star performer status in the eurozone. For clients and consultants watching on from Latin America, the comforts of home are undoubtedly appealing. Still, Mariano Rajoy’s recent lost parliamentary bid is testament to the fact that political uncertainty exists everywhere these days; there is no safe bet for those in search of political and economic stability. Indeed, even if Spain was a safe bet, could clients with a thirst for global endeavour, ever be content to limit themselves to their homeland?
Consultants have told us that now, more than ever, even smaller Spanish businesses are seeking international growth—lured by attractive markets in the US, Asia, and the rest of Europe. For global consulting firms—able to leverage international networks and experience—the opportunities to support clients in their continued globalisation efforts are huge. While the destinations are still to be confirmed, one thing is for sure: Consultants will need to keep their passports close at hand, as Spanish clients have the whole world in their sights.
Rachel Duk is a leading commentator on the consulting industry and a director of Source, who provide specialist research on the management consulting market to consultants and their clients.
© Rachel Duk 2016. All rights reserved.
Reproduced by permission.