Legacy consulting firms need to reinvent themselves
August 5, 2019
The word “disruption” has become a bit of a buzzword for consultants, but rarely do they take the time to consider that, as an industry, they too may be ripe for disruption, says George.
Historically, the sectors most susceptible to disruption are slow adopters of technology and those that stick to outdated business models. It is now time that UK’s £10.6 billion consulting industry begins to practise what it preaches. How can we expect management consultancies to reinvent client industries without first reinventing their own? A good question to ask is whether their business model would perform if they launched today. If the answer is no, then beware of disruption.
There are many forces driving this change like the rise of new business models and pressures exerted by small and agile consultancies which are transforming the marketplace. Competition is fierce. In response, many larger consultancies are cannibalising other firms to acquire capabilities and remain relevant.
However, digitisation is more than updating technology and shiny designs. It involves bottom lines, revenue and shareholders. Often, digital projects are complex, time-consuming and expensive – much more than necessary. But developments must create value for the customer and the business.
‘Elite’ consultancies are positioning themselves as “one-stop-shops” for business transformation, with portfolios of trendy design agencies that can deliver scalable cost-effective solutions. This was one of the reasons I joined Fjord following the acquisition by Accenture. Similar to clients, I was drawn in by the promise of resource, infrastructure and wealth of experience.
I realised this wasn’t always the truth despite some good intentions. Many of the large consultancies remain wedded to their tools, frameworks and ‘templated’ solutions, which rarely result in project success.
In an increasingly digital world, size means nothing. Having 60 developers on a project looks great but, in reality, means enormous resource and lengthy timelines with no real defined outcomes for clients. Legacy consultancies face bureaucracy, outdated thinking and processes which means they’re unable to keep pace with new developments or manage unanticipated disruptions and trends that may arise.
A better return on investment
There must be a shift in the industry’s underlying rules of engagement and measure of success. Not just because clients will wake up one day and realise they’ve wasted money on unsuccessful projects with no real value, but also because the best talent seeks challenges, a dynamic work environment and the autonomy to have a meaningful impact. Legacy consultancies can no longer offer this.
Currently, the industry is rewarding bad behaviour. There must be a revamp of success metrics, which are generally focused on striving for big deals and lengthy projects. Without accountability or realistic targets, this remains problematic. Instead, consultants should focus on outcomes, quality, value and integrity.
Business leaders are stressing over the need to deliver value to customers with tighter margins. Coupled with rising costs, this is having a domino effect on clients wanting to partner with consultants who offer real value. We already hear of stories where large consultancies have been criticised for multimillion-dollar projects which have had no impact.
“A new consulting model of the future is unfolding. But how can management consultants reinvent clients if they don’t reinvent themselves first?”
It’s all about people
With rapidly changing customer expectations, which must be translated into business operations, comes the opportunity to create real value. This value is underpinned by people. People are driving the change from the demand and supplier side.
In a world of connected working, the studio is no longer the four walls of an agency. It’s an interconnected workforce, brought together by fluid networks and spaces, creative minds and a shared mission to deliver meaningful business outcomes. This is ushering a change within the management consultancy landscape, which is led by talent.
It paves the way for digital challengers, which aren’t bogged down by the old ways of doing things to create a model of the future. This is the very reason, I joined Class35 last month. A chance to take the learnings from my previous life to break the model. A bold and audacious challenge perhaps, but challenge accepted.