Posted , in Business model
This just in: Consulting firms are not like toilet paper
I have a guilty secret: I’ve got a lot of toilet paper in my loft. I mean, like, a lot.
In my defence, the first consignment of rolls turned up before lockdown in the UK, and even before that brief pre-lockdown period when toilet paper became more valuable than gold. Also, since then I have repeatedly offered to sell it to those in need at what I consider to be the very reasonable price of £20 per roll. Still, there hasn’t been much demand for my offer, and I have since taken delivery of a new consignment. As I say, there’s a lot of toilet paper up there.
Perhaps the better defence is that my somewhat excessive toilet paper purchasing is funding the building of toilets in places where they’re really needed. That’s because I’ve been buying from Who Gives A Crap, a company which, despite the absence of a question mark at the end of its name (about which I admit to giving an improbable amount of crap), does all sorts of good toilet-related work around the world with its profits. It’s a perfect example not only of a purpose-driven business but also of how powerful purpose can be for a business.
And why does its model work so well? I think it’s because it’s being applied to something that’s highly commodified. Sure, there’s some value to me in toilet paper being soft, strong, and long, but a competitive market means that those boxes are largely ticked no matter what brand I buy. If you’ll forgive where this is all heading, the chances of accidentally getting something that feels like sandpaper are quite remote. So why wouldn’t I choose something that also does a lot of good in the world? Frankly, it’s left me wondering how many other largely commodified household goods could be given the same treatment. Wherever you see manufacturers trying to make something really big of the tiniest difference in their products, or having given up on that and started selling themselves on lifestyle promises, I’m willing to bet you’re looking at a market that will be dominated by purpose in the future.
But I’m not convinced that purpose will be equally powerful outside of those scenarios—at least, not anything like as quickly. Frankly, I think the whole business world (ourselves included) has become a bit purpose-obsessed in the last few years. To the extent that that’s driven by a genuine desire to do some good in the world—or even does so accidentally—that’s great. But I’m far from convinced that it really is in many cases, and I’m equally unconvinced that purpose is going to yield the fruit most people are hoping it will (market share) any time soon.
I think the professional services market is a good case of this. I don’t want to overlook the fact that we’ve written about the importance of purpose on this blog before, or that we’ve praised the likes of EY for the work it’s already done around purpose. I think it’s good work and appears, by some measures at least, to be paying off. And it’s hard to find much bad coming out of consulting firms all rushing en masse to convince the world that they’re doing it some good. Reputationally, that makes a lot of sense.
Nor do I want to overlook the idea that corporate social responsibility is becoming increasingly important, not only in itself, but as a means of making sure a firm isn’t deselected by its clients. But I think the rush to find a purpose is blinding people to the paradoxes that lie at its heart. The first of those is that the act of searching itself reveals purpose to be missing—or at least to be sufficiently weak that people don’t realise it’s there. And unless a purpose is something that you can easily go and get, that’s a problem.
The second concerns what it reveals about the lack of differentiation in other forms. If I’m right about toilet paper (ahem) then the more purpose works, the more consulting firms have actually got much bigger problems; if purpose does end up functioning as a differentiator, then that suggests firms weren’t doing enough to differentiate themselves in other areas. In other words, that they’re perhaps a bit more like toilet paper than they’d like to think.
Should all of this add up to a wholesale rejection of the importance of purpose? No. I think it’s right to be a bit cynical about some of the motivations behind the search for purpose, however much people will protest that doing good and being successful aren’t mutually exclusive, precisely because it helps to pave the way for a truer version of purpose to emerge—a version that may yet end up becoming a powerful differentiator.
But in the way it’s being approached today, I think it actually does little more than highlight how much of a need there is for consulting firms to figure out how they’re really different. At any rate, isn’t there a strong possibility that, unless they’re based on something more substantial, the purposes of all the world’s biggest consulting firms are going to end up sounding remarkably similar? Maybe one of the reasons why so few people have followed EY’s lead is that it got its “building a better working world” idea out there first and, whatever the precise words, that was pretty much the only idea anyone else had come up with.
In summary, if you’re looking for purpose to be a differentiator, stop looking.