Agility and the unknown unknowns

I’m back to my piece of string.

For those of you who are new to this idea, we’ve been talking a lot about how client perceptions are reshaping the consulting industry, essentially pulling (like a piece of string) it into two distinct markets: Low-cost consulting that, while it’s highly specialised, is familiar, repeatable and theoretically widely available. Success here depends on depth of knowledge and efficiency. And high-value consulting that is far closer to traditional management consulting and depends of the ability to think and act in a creative and informed way about complex issues.  The first market is by far the biggest, but it’s currently growing much more slowly than the second.

Listening to a client talking in this vein the other day, I was struck by how much depended on that point about familiarity.  The low-cost market is ultimately about problems that people understand – the known knowns.  Because they understand them, they can predict, even dictate, what work is required; as a consequence, they bring consultants in to fix those issues.  The best buyers – and the best consultants in this space – understand that completely and focus their efforts on understanding and articulately precisely what’s required, so that no time, effort or money is expended without cause.

But the high-value market is all about the unknown unknowns.  It’s the times when clients say they don’t know what the problem is, so they can’t identify what they need, or when they have to rely on bouncing ideas around with consultants before they can frame their RfP.  It follows from this that clients in the high-value space are much less clear about which consulting firms they should work with – and that’s something we’re seeing in shortlists which seem to pitting increasingly bizarre combinations of firms against each other for the same piece of work.

It also means that firms that offer a range of different services will have an advantage, because clients, in order to buy a specialist service, will have to know what their problem is.  Over time, there’s a danger that specialist firms will find themselves associated with low-cost work in which expertise will primarily be an aid to efficiency.  To counter this, they’ll have to build relationships with larger, generalist firms, supporting them in specific areas as these arise during the course of the project.

The high-value market won’t be without its own challenges: agility.  That a broad-based firm has the skills needed to deal with an issue that emerges is only part of the solution: the firm has to be able to know it has the skills (which person out of potentially thousands is just the right one… ), but it has to be able to deploy those skills at the drop of a hat.  Clients will want to work with the firm that can demonstrate its instance response to the unknown unknowns, not one that takes days to find someone even half-qualified.