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Disruption in Consulting – Strike First

Google “consulting” and one of the first articles that will come up is the Harvard Business Review’s “Consulting on the Cusp of Disruption.” Dig a little deeper and you will find a host of articles and blog posts discussing the imminent disruption in consulting. Certainly, consulting is one of the last industries to be significantly affected by the era of big data and the internet. While everything from retail to education has been transformed by today’s technological advances, most consultants continue operate similarly to how they always have, but with the addition of updated tools. They travel to client sites, interview a select handful of client stakeholders, analyse the data they collect, and – several weeks later – return a written report to the client. Yet while it seems many business thought leaders are discussing how consulting is ripe for disruption, few consulting firms have made major progress in combating the impending disruption.

When it comes to the speed of disruption, two factors help insulate consultants. First, a large portion of the traditional consulting model relies on relationships and the expertise or human thought that consultants bring to a client site. Until artificial intelligence becomes sophisticated (and economical) enough to replace the deep knowledge and relationships that consultants have, there will still remain a need for external consultants. After all, if AI ever replaces consultants, then the broader pool of corporate employees and knowledge workers will also be in trouble.

Second, consultants have history on their side: the consulting industry has changed very little in the last century. It’s unsurprising, therefore, that consultants feel somewhat immune to the disruption that has affected virtually every other industry. Moreover, the need for consultants has not diminished: as long as businesses exist, they will have problems that need fixing. Nonetheless, consultants will soon face the same challenges that similar industries have: alternate solutions with greater transparency, speed, and clear ROI. Soon consultancies will need to cope with the continued rise of internal consulting, new delivery / service models such as Hourly Nerd, and the development of analytical tools that enable organizations to better diagnose and navigate their complex business problems, or that at least reduce the ongoing need for external expertise.

To date, many top-tier consulting firms have relied on their brand name and relationships to attract and retain clients. As prospective clients begin to demand measurable results and ROI, consultants may find themselves in a tight corner. It is important not to discount the real value that consultants offer, however.

Consultants provide specialized knowledge and expertise based on years of experience, and they eliminate bias from internal investigations. Yet as we have seen, there seems to be little doubt that the consulting industry is facing substantial disruption. Therefore, consultants should disrupt themselves before they are disrupted.

How Disruption in Consulting Unfolds

There are a number of ways in which consultants can implement disruption in consulting. To begin with, consultants should encourage enhanced client participation and collaboration throughout the engagement. Much of the time, after a client engages a consultant, the client then sits back and allows the consultant to take the stage with little to no further involvement from the client. But while the consultant has the expertise around how to treat certain issues or act in specific situations, at the end of the day, the client always knows the quintessential details of his business better than the consultant does. Collaboration between the consultant and the client can lead to more actionable results, as the client knows what his or her business is capable of implementing. The lack of collaboration and transparency in the consultant’s business model today may cripple the ability of the client to truly understand and align to the consultant’s recommendations.

On the other end of the spectrum, consultants would do well to start taking a more active responsibility in the client’s implementation of recommendations and overall success. Currently, many consultant firms do not measure the success of their engagements through the subsequent success of their clients. Traditionally, management consulting has centred around performing a set of tasks and supplying a client organization with a set of recommendations, training sessions, and other deliverables. Consultants do not always provide a detailed plan for achieving a strategic end, and they are not often held accountable for post-implementation results.

The problem is that while the consultant may technically provide an answer to the client’s issue, frequently the client organization is simply not ready to implement the consultant’s recommendations. The organization may not have the resources or personnel available for the change, or perhaps there are deep-set cultural or strategic barriers that must first be dissolved. Instead of providing an answer to a problem that is merely correct, the consultant should provide a solution that is actionable for the client. Rather than one overwhelming, comprehensive solution that overturns the way the client organization functions, an actionable solution might be a step-by-step process comprised of a number of small-scale solutions that all point to a strategic end. In order to achieve a clear ROI, therefore, active engagement throughout the process is critical for both the client and the consultant.

Finally, consultants need to fully embrace technological advances. Like consumers, businesses today are calling for faster and more economical solutions to their needs and pains. This demand for speed and efficiency is a barrier to some of today’s consultants, who largely continue to rely on tried and true but not necessarily efficient methods. In the new world of big data, consultants need to adjust to client demands, finding innovative ways to offer their expertise faster and with a clearer ROI. Accelerating and augmenting data collection and analysis with software, for example, could enable deeper insights and data-backed solutions for clients while allowing consultants to place even more focus on client relationships.

Disruption in consulting may be the answer to the rising quandary today’s consultants face. Greater transparency and collaboration with the client, results-based consulting, and embracing technology are the keys to winning in the next era of consulting. If consultants are the next industry to face disruption, they will do well to deal the first blow.

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