My key take
away: Consulting on the Cusp of Disruption (Christensen, Wong, & Bever, 2013)
It is rare to find an article on ‘Consulting’ and that too in
a widely respected magazine like Harvard Business Review. When it written by
one of the living guru’s in management, Christensen; time to start taking notes
Here are my key takeaways and TO DO list based on the
article.
In this article, the authors look at the consulting world
from the lens of theory; especially around disruption, to see how consulting is
changing and why. And their prognosis: the same forces that disrupted many
businesses are starting to change the world of consulting. The author’s base
this prognosis based on various leading indicators; the ever decreasing share
of classic strategy work in traditional firms and the increased use of value
based pricing being the top two. The authors argue that the two factors that
made consulting immune to disruption – opacity and agility are quickly becoming
irrelevant and hence leading to the coming disruption. Opacity refers to the
client’s inability to judge the quality of a consultant’s work and agility is
the ability of top consulting companies to move smoothly from one idea to
another. The article then uses the example of the legal industry to support
this argument.
The article goes on to recommends that traditional consulting
teams significantly rethink their service models and experiment with new. The
short list of changes that a consulting firm should act on include
·
The disaggregation of the ‘one stop solution shop’
into modularized services that clients can procure
·
The democratization of knowledge : the explosion of
analytics and big data leading to ‘almost’ real time analysis and actionable
insights
·
The growth of ‘asset based’ consulting : This is the
packaging of ideas, frameworks, and analytics through a technology platform;
many a time billed on a license based fee model
The article then identifies two alternate models to the
traditional solution shops of consulting: Value added process business and
facilitated network. The key differences between the three are summarized below
|
Solution Shop
|
Value- added process business
|
Facilitated network
|
|
·
Structured to diagnose and solve problems
whose scope is undefined
·
Delivers value primarily through consultant’s
judgment rather than through repeatable process
·
Customers pay high prices in the form of fee-
for-service
|
· Structured to address
problems of defines scope with standard processes
· Processes are usually repeatable
and controllable
· Customers pay for output
only
|
· Structured to enable the
exchange of products and services
· Customers pay fees to the
network, which in turn pays the service provider
( Examples provided are Open IDEO, CEB, Gerson Lehrman Group, BTG,
Eden McCallum)
|
[Table is reproduced from the article]
The author’s list of implications to industry, as they
provide the dire warning ‘Disruption is inevitable’, include
·
A consolidation will happen in the industry over time
·
It will be in the smaller clients that some of the new
models will get proven
·
The traditional boundaries between professional
services is blurring
·
Technology will play a key role in supporting
consulting services
Interestingly the article also provides some insights into
what needs to be done to make a change like this successful
·
An autonomous business unit (with all the functional
skills to be successful)
·
Leaders with relevant ‘school of experience’
·
A separate resource allocation process
·
Independent sales channels
·
A new profit model
·
Unwavering commitment from the senior leadership.
Now, these are definitely elements that we need to work on.
Else, as the authors point out; we may become victims of our entrenched
success. The leadership team and I very interested in hearing your perspectives
on the changes happening in ‘our’ world. Please look around your client
environment to see how they are using consulting and advisory services. What
services are being consumed by our (current) primary client; the chief
information officer? What are our competitors offering that makes them more
attractive to our clients. What more do we need to do internally to get ready
to take advantage of the coming disruption?
Work Cited
Christensen, C. M., Wong, D., & Bever, D. v.
(2013). Consulting on the Cusp of Disruption. Harvard Business Review, 2-10.
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