From UK’s AI Dependence to Japan’s Traditional Philosophies, Management Consulting Picks Best Practices for Revival

LONDON, July 21, 2025 — Management Consultancies Association, or MCA, estimates the consulting industry to be worth £20.4 billion, and currently, exports generate around £5.9 billion of sales.

MCA estimates the UK consulting industry was flat in 2024, with revenue of £20.4bn, but is set to grow in 2025 and 2026.

The key catalyst for the revival of the UK’s management consultancies is said to be Artificial Intelligence (AI) and efficiency drives.

AI has already shown the ability to add value for consulting firms.

Well-known benefits of AI, which were believed to be futuristic till now, are set to be unlocked.

With this, adopting AI into client services has become a new reality for consultants.

As per a recent report from Deltek, 74 percent of partners believe that the implementation of AI successfully can equip a company with substantial competitive advantage.

Similarly, a Harvard Business School study at one of the top-notch firms revealed that significant productivity gains could be achieved, including in complex, knowledge-intensive tasks for engagements.

As a result of the slowdown in the consulting sector, the UK saw the industry’s collective revenue move into slower or negative growth.

Following the COVID-19 pandemic lockdown period in 2020, consultants experienced an immediate rebound, which saw a bout of demand that led to major hiring campaigns.

However, in the years following, many of the largest firms have downsized their headcount, as clients once again postponed projects amid geopolitical uncertainty and rampant inflation.

Good-old Ikigai in Times of AI

While consulting firms are betting big on AI and efficiency drives for a revival, international management consulting firm Kearney, which runs an employee satisfaction survey every six months, is inspired by the Japanese philosophy of Ikigai.

As reported by Financial Review, as a part of Kearney’s survey during 2023, scores for employee belonging and purpose had been reflecting significantly low.

This was a strong indicator that several employees were struggling to find meaning in their roles or realise the impact creation.

Chairman Emeritus Alex Liu, who at the time was Kearney’s Global Managing Partner, had learnt about the concept of Ikigai on one of his visits to Japan, where he had spent time with Kearney’s Managing Director Shigeru Sekinada.

Having incorporated Ikigai in the company, Kearney encourages employees to align four key areas: what they love, what they are good at, what the world needs, and what they can be paid for.

The employees are called on every month to share their Ikigai story with other staff as a way of connecting with one another. Some of these stories are also pasted on office walls and shared in company-wide meetings.

Dating back to the Heian period (794–1185), Ikigai was popularised by the Japanese psychiatrist and academic Mieko Kamiya in her 1966 book On the Meaning of Life.

It translates to “a reason for being” or “a purpose in life,” and focuses on encouraging people to find what brings them joy and meaning so they may lead a longer and more fulfilling life.

Japanese Philosophy

Japanese-style management, also known as “Japanese management practices,” is a set of principles and practices emphasizing continuous improvement, teamwork, employee loyalty, and long-term planning. It is characterized by a focus on quality, employee involvement, and a collaborative approach to decision-making.

The key features of this model include Kaizen (Continuous Improvement); 5S Methodology; Lean Manufacturing; Just-in-Time (JIT); Total Quality Management (TQM); and Employee Involvement.

Japanese are known to prioritize long-term growth and stability over short-term profits.

The Japanese value long-term employment and career development within the company.

Decisions are made through a process of consultation and agreement among relevant parties, also known as “Ringi” or consensus-based decision-making.

In Japanese businesses, quality is a core value, with a focus on producing high-quality goods and services.

Traditional management focuses on profit maximization for shareholders, while Japanese management emphasizes maximizing value for all stakeholders, including employees and customers.

Traditional management often prioritizes short-term profits, while Japanese management adopts a long-term perspective.

Traditional management can be more individualistic, while Japanese management emphasizes teamwork and collaboration.

Examples of Japanese management practices include “Nemawashi”, which is a process of informal consultation and consensus-building before making a formal decision.

Ringi is a formal system of decision-making involving circulation of documents for approval by relevant parties.

“Horenso” is a popular communication system emphasizing timely reporting, feedback, and communication.

Japanese management practices have been influential worldwide, demonstrating the benefits of a focus on quality, employee engagement, and long-term planning.

AI may promise efficiency, but it’s the rediscovery of purpose and long-term thinking that’s giving consulting firms a clearer direction.

Inputs from Saqib Malik

Editing by David Ryder