AI: An identity crisis for consultants?
Liminal. It’s a word for the space between two states, between the land and sea. It’s the moment when the trapeze artist has let go of the “what was” bar but hasn’t yet grasped the “what will be” one. Surviving that moment is all about your trapeze, your skill, and ultimately your confidence—and that applies to consultants, too.
The technology trapeze
It’s not surprising that consulting firms—indeed, the entire professional services industry—are worried about technology. Clients expect the “what will be” technology to be very different to “what was”. More than 90% of clients think that the consulting process will be changed by the advent of AI, 70% significantly so. At the start of last year, 34% of clients said it was “essential” that firms should refer in their proposals to the way they planned to make use of AI in service delivery; by Q4, that proportion had risen to 74%. Why this level of interest? Forty-five percent of clients think that AI-enabled consulting solutions will be better than traditional ones.
However, it’s not just new technology that’s driving change, but also the environment and timeframe in which that technology is being adopted. The professional services industry has faced down this kind of threat before: The spreadsheet in the 1970s, which could have destroyed strategy consulting instead created opportunities to carry out colossally larger and more complex projects; real-time auditing in the early 1990s, which fell at the hurdle of clients’ in-house data problems. What’s different now is the burning platform on the supply side: Falling margins are forcing firms to adopt AI quickly—perhaps much more quickly than they’d like—to become more efficient.
The expert artist
Then there are the people about to fly from one trapeze to the other, the consultants who are unsure whether their expertise will help them grasp “what will be” or will leave them flailing in the space between the past and future.
Layoffs by firms over the last 2-3 years have not helped. Although primarily motivated by the need to protect profits, they’ve nevertheless given the impression that AI will mean fewer consultants. Not surprisingly, there’s something of an identity crisis going on. What skills will consultants of the future need? Will we even need consultants at all?
But our research suggests these fears are overstated. Seventy-two percent of the senior consulting buyers we survey describe their organisation as being very short-staffed, and 68% say they don’t have the depth of experience they need. Expertise is still valued by clients: Twenty percent say they’ll pay more for experienced consultants. Sector and subject matter expertise are still the two most important attributes clients are looking for from a professional services firm.
Note: The chart shows the relative position of each attribute. No attribute is unimportant, but those at the top are more important than those at the bottom and are therefore more likely to influence clients’ decisions.
Clients are not looking for a world without expertise, but they are looking for a different kind of expertise, one that translates into concrete value. They want to work with experienced experts who can hit the ground running and deliver fast results. AI can help—43% of clients say it will enable consultants work more quickly—but it takes people who really know what they’re doing and have done it countless times before to make those ideas work in practice. Clients also want to work with people who are prepared to shoulder some of the responsibility of driving success in an extraordinarily challenging economic environment, and they can’t hold an algorithm accountable.
The prospect of the “what will be” world is, indeed, daunting, but it will depend on expertise more than ever.
The confidence to make the leap
Technology change is inevitable. Expertise is a necessity. But what matters most right now is belief that the “what will be” world will be different, but better. With the media dominated by studies showing how many jobs will disappear as a result of AI and so much talk of consulting firms becoming more like technology firms, it’s not surprising that many people in the professional services industry are frightened that the future will be worse, that their expertise—their identity—is under threat. The next trapeze will unquestionably be different, and it could propel the market into significantly higher levels of growth, but only if brings AI and expertise together. That’s not the story that’s grabbing headlines at the moment, but it should be.
What can firms do next?
AI is changing clients’ expectations of consulting dramatically, and your firm should be ready to respond. An expert-led leadership briefing from Source will support your firm as it navigates rapid shifts in the market, providing data and insight tailored to answer your firm’s most important questions. To find out more, get in touch.