Disrupting professional services

Year 2018. Two things are disrupting the world as we knew it: Technology and Millennials.

Technology has already changed almost any imaginable industry:

• The world’s most popular media owner (Facebook) creates no content.
• The world’s most valuable retailer (Alibaba) manages no inventory.
• The world’s largest taxi services company (Uber) owns no taxis.
• The world’s largest accommodation provider (Airbnb) holds no real estate.
• The world’s biggest bank (Bitcoin) has no actual cash.

Most of these businesses were founded by millennials, which account for the chunk of their end-users, too. But the biggest disruption of it all will be related to the workforce. Millennials have been accused of being lazy and narcissistic (“The Me Me Me Generation”), of demanding immediate recognition and of getting bored with virtually anything. “Globalization and social media made them like that”, they say. But guess what? They also make great entrepreneurs, are less risk-adverse, and the world needs them.

"Millennials make great entrepreneurs, are less risk-adverse, and the world needs them"

The WEF recently listed the 5 biggest risks the world faces today – basically related to geopolitical risks and wars, and to the end of finite resources. But I believe one of the most important threats has to do with overpopulation and aging. Look at the population pyramids between 1950 and 2100 below and think about the number of older people our children will have to support. Two of the most affected countries are already tackling the issue: Canada, by welcoming younger immigrants and Japan, by investing in robotics.

Millennials are changing the picture. They consist, depending on whom you ask, of people born from 1980 to 2000. The older Millennials are now approaching 40 and have more grey hair they’d like to. They have languages, professional experience, and more importantly, personal experiences – they have certainly been around! They are mature enough and are ready to lead a huge change in the workforce.

At the same time, new platforms are enabling the change. Matchmaker Catalant has been for years linking subject matter experts with leading corporates including Fortune100 companies. It has now various competitors, which specialize in specific areas such as political risk, strategy or legal advice. It is the so-called “Uberization” of the workforce, which allows companies to access expertise on-demand. I am surprised LinkedIn has not got into this business yet – they are uniquely positioned as matchmakers.

Why would a company go through the nightmare of hiring and maintaining staff when it can have them on demand? Walmart adjusts its workers’ shifts based on customer needs. Other companies will follow, trying to avoid overhead expenses and bench-warming employees. This is true for public and multilateral organizations, too. The World Bank for one, is reported to have 20K contractors vs 16K permanent staff. For freelance workers keen to accept the pros and the cons that come with it, it is a win-win situation.

Professional services firms should fasten their seatbelts. The Big 4 Audit firms and the Big 3 Consulting firms keep increasing their workforce and revenues annually, without exception. As of last July, there were 1 million people employed by Big 4. ONE MILLION! But this figure is not sustainable and will surely change once software is able to produce reports that will become commoditized (audits, due diligences, valuations, etc.) and once millennials reach the tipping point of becoming independent.

"Professional services firms should fasten their seatbelts for the upcoming change, once software produces reports that will become commoditized and millennials reach the tipping point of becoming independent"

As HBR put it a few years ago, “the same forces that disrupted so many businesses, from steel to publishing, are starting to reshape the world of consulting.” Companies are also watching their professional services costs, and are ready to hire the experts, and to get rid of the brand aspect.

I for one, am an old Millennial. 37 years old, 12+ of Consulting experience around the world (literally), and with a few stories under my belt. When I became independent in July, I had calls with several colleagues and acquaintances that were taking or had taken similar routes – and agreed to form a platform to refer work to each other. A global network of Uber consultants, looking for new clients. Who would like a ride?