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Consulting in the middle ground: Better than it sounds
No one likes the middle ground. You’re caught between a rock and a hard place, or are tumbling between two unhelpfully positioned stools. You’re betwixt and between; neither fish nor fowl. So much better to be on one side of the fence, than sitting on it.
But I’m not sure that’s true. We’ve written a lot in these blogs about the way in which clients are dividing the consulting industry into two distinct markets: high-value and low-cost work. Driving a wedge between the two is clients’ recognition that these different types of work depend on different skillsets, and that in turn depends on people who are paid, and charged out to clients, at different rates. Different price points result in different business models, separating one consulting market from another. Complicating what would otherwise be a relatively simple picture is the fact that most of today’s growth services in consulting—digital transformation, data and analytics, cybersecurity—stretch across the low-cost to high-value continuum. Combining different disciplines and skillsets, the opportunity these services create—and the challenge they pose—is that success depends on being able to knit together low-cost and high-value components. This makes the middle ground—the looking glass itself—a very interesting space.
Most firms will treat the crossover point between the two markets as a problem to be solved, a mirror, if you like, that they have to pass through. A firm that’s wholly in the low-cost or high-value area, will have to cross the middle ground if it wants to change its business model. That might be a technology firm using data and analytics to break out of its increasingly commoditised core market, or a strategy firm that wants to automate some of the data gathering it typically does at the start of an engagement. A bit like when Alice passes through the looking glass, and finds that the rules that applied in normal life don’t apply, consulting firms will have to adapt to a new environment where their competitive advantage could be more of a help than a hindrance. For these firms, the key to success will be a very clear description of its proposition, one that explains to clients how it combines the best of the low-cost and high-value worlds.
But there will also be firms that see the middle ground as an opportunity. For these firms, success will depend on their ability to knit those low-cost and high-value components together on a case by case basis: frictionless delivery, on demand. You can’t achieve that on a purely proposition by proposition basis. Firms that permanently occupy the middle ground need to have a culture and an organisation model that makes it easy for people to work together, rather than dividing them into isolated practices: One P&L, common performance metrics, equal pay, and so on. But more than anything else, they need to be able to articulate to that business model simply and quickly, and consistently demonstrate it working in practice. “There’s nothing that irritates me more than consultants who spend half an hour explaining their business model to me, then telling how they personally manage to avoid its institutional failings,” said a client I spoke to recently. “How hard can seamless delivery be?”
Very hard, it seems. Which means that only a tiny minority of firms will see – and seize – the opportunity.