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Strategy consulting: What’s going on behind the facade?
Walk down the main street in Noto, in south-eastern Sicily, and you’d be forgiven for thinking you’re in one of the Baroque capitals of Europe, not a relatively modest city of just 24,000 people. Ornate façades, studded with balconies, line the sides of the street; wide steps sweep up to the cathedral doors. But turn any corner and you start to realise that it’s more like a film set, an architectural veneer in front of unremarkable streets.
There’s always a risk in taking a metaphor and stretching it too far, but I do think there’s a parallel here with strategy consulting, about which we’ve just published a new report. Strategy is the baroque jewel of the consulting industry, consulting at its most complex and decorative, where utility is sometimes overwhelmed by the desire to put just one more flourish in your PowerPoint deck. By comparison, operational improvement work is a sturdy Romanesque style, and technology consulting positively Bauhaus. But, our report argues, behind the glorious edifices of strategy consulting, the reality is increasingly Noto-like.
Strategy consulting is being pulled in three directions. We’ve written much on this blog around the extent to which all forms of consulting work are being cannibalised by clients’ thirst for digital transformation work—and strategy is no exception. Indeed, we estimate that 45% of what has conventionally been termed “strategy” has now been re-badged as transformation, a higher proportion than for any other service line. But our interviews with clients also reveal the extent to which data and analytics is pulling strategy work in a different direction, and the growing importance of implementation. These three areas—digital transformation, data and analytics, and implementation—are collectively hollowing out what we’ve traditionally called “strategy” consulting. Like Noto, the main street of strategy consulting may still look gorgeous, but there’s not much more to it than a facade.
So, is that it? Is the answer to the question we pose in the report, “is there a future for strategy consulting?”, a simple no? Well, no, because nothing in consulting is ever simple, is it?
Strategy becomes, we think, more about the how, and less about the what. No amount of hollowing-out can eradicate the need organisations have for objective advice and creative thinking, delivered by people who are smart enough to know that at least part of the value they add is in making things happen quickly. In the future, when someone says they’re doing strategy—whether they’re a consultant or work client-side, this is what they will—or should—be talking about. And that’s what strategy firms of the future will—or should—be delivering: Individuals and small teams of people who can weave together digital technology and transformation and analytics with execution, and to do that imaginatively and rapidly. What the names on the front door of those firms will be is, frankly, anyone’s guess.