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It’s tempting, oh so tempting, to ascribe some type of Darwinian process to the way in which consulting firms productise their services. It should be, we feel, the survival of the fittest: Only the best assets (by which we mean the software and data that firms are increasingly investing in to support, and in some cases replace, traditional consulting work) should remain at the end of a long and rigorous process of testing and evaluation. Puny products and mutant methodologies will be discarded, beaten in the race of commercial life by a new generation of clinically-crafted tools.
The reality, of course, is different. Most of these assets begin their lives as bit players in large, traditional projects. Somewhere in the midst of all the febrile activity that is consulting some bright (and usually junior) analyst saves themselves time by creating a spreadsheet that processes data more effectively, or a bot that identifies new sources of data more quickly. Their colleagues sit up and take note: Couldn’t this tool be used elsewhere, someone asks; that data could be valuable, says someone else. Sometimes that’s as far as it all goes—our little asset is like a mayfly, useful for just a day—but on other occasions it finds itself nurtured for bigger things.
We know all this because, when we asked consultants at the end of last year how their working lives have changed, more than 40% said they were spending more time than in the past developing software tools for clients, and almost 70% said they expected to spend more of their time developing new products in the future, in an effort to demonstrate that their firm was capable of genuine innovation. Is any of this a problem? Certainly not where the consultants themselves are concerned: The same survey showed consultants continuing to find the industry attractive to work in. Indeed, it may even be that this type of work will ensure consulting remains attractive in the future, as there’s a danger that a growing number of large-scale, long-term transformation projects make it harder for new recruits to get the range of experience and opportunity to think creatively that they’re looking for, and developing innovative, new propositions could help offset that trend.
But there is a risk that all these consultants, beavering away at new product development, don’t really understand what a product should look like. Is there actually a client need? If there is, what precisely are people prepared to pay for? What’s the right commercial model, and how do you ensure that it doesn’t damage your existing model and/or consulting brand? In this very-opposite-of-Darwinian system, luck (who the client is, who the partner/project manager is) will play a disproportionately large role. The products that evolve to a point where they can be taken to market aren’t the ones that should get to market.
So, the question then becomes how to inject greater scrutiny and deliberation into product development. Part of the solution could be to create fairer and more robust internal processes but there’s a danger that decisions are still commandeered by people who shout more loudly than the rest. Looking to buy assets via the acquisition of technology start-ups might be a better route, on the assumption that these companies will already have assessed the potential. But the disadvantage of this approach is that it’s often hard to embed an external product in a consulting firm—not everyone will believe it does what it says, few will feel a sense of ownership for something they had no hand in creating. A better solution, we think, is more (some!) market testing. If we want to inject some natural selection into consulting firms’ new product development process, let’s ask the people whose opinions really matter: Clients.