Posted , in Differentiation
The battle for the soul of consulting
Many years ago, I took part in a panel debate about consulting at London Business School. An hour or so into the discussion, a tentative hand went up in the audience. “I’m sorry,” the student said. “This is all very interesting, but I still don’t understand what consulting is.”
It’s a question that’s being asked again today, but this time behind the closed doors of senior partners’ offices. For consulting firms, contemplating their strategy, how they answer this question will determine their future success.
On one side, there are people who see consulting work as a cerebral activity, done by smart, creative people working with smart, creative clients, which helps organisations adopt and adapt best practice and innovative ideas, all in pursuit of better performance. This is, of course, the classic view of consulting—one that would be recognised by the original James O. McKinsey back in the 1930s and one that was nurtured by his illustrious successor, Marvin Bower, who ran McKinsey from 1950 to 1967 and remained a highly influential figure into the 1990s. It’s also a definition of consulting that many of today’s most senior buyers and users of consulting services would subscribe to. “We’re looking for access to their expertise and experience, and we value the independent perspective that they bring,” said one such executive we spoke to recently.
But there are plenty of other people, inside and outside consulting, who think that the future will look very different. What they see are clients who are frustrated by the chronic failure of consultants to ensure that their advice is actionable and is followed through to the delivery of results. They see—and still value—smart people but want them to invest more effort equipping their own staff to do some of their work in the future. People who are looking for the consulting process to be improved and accelerated by replacing some of what consultants have done historically with clever tools and proprietary data. People who are starting to re-draw the boundaries of where consulting work should start and finish. Rather than come in offering short-term advice, should clients be asking consultants to take responsibility for a specific process for a defined period of time, before returning them in their new, improved state? (This is a version of the future we’ve explored in our recent report about “new” managed services).
Which side you’re on won’t just determine your business plan for the next year or so. It will define the people you hire—and how many of them. It’ll affect the fee rates you can charge and, consequently, the profitability of your business. It’ll have an impact, not just on how fast you grow, but the shape that growth takes. It’ll dictate who your competitors will be and how sustainable your current competitive advantage will be.
And, if all that wasn’t hard enough to contemplate, the immediate challenge is that you’ll find that opinions, even within your own firm, are divided. Some people will be firmly in the first camp, while others sit squarely in the second. Just as we see in the political landscape, opinions will become more extreme and more tightly held. As the debate intensifies, expect to see more arguments spilling out from behind senior partners’ doors. Expect more, sudden leadership changes, as one faction, then another, gains the upper hand. Expect factions, disheartened and frustrated by the lack of agreement, to leave to create their own versions of the future. No side will go down without a fight.