It’s Clients that Disrupt Consulting

Making effective use of outside consultants is often a determining factor for companies in transforming their companies and improving business. For this reason, business leaders should pay close attention to the shifts now unfolding across the consulting industry. Clayton Christensen anticipated many of these changes in his 2013 Harvard Business Review article, “Consulting on the Cusp of Disruption.” When we look back at this article today we see that consulting is indeed being disrupted, but not quite in the way that Christensen foresaw.

Consulting firms are still prospering

The first thing we see is that we have not – yet – seen major consolidation in the industry’s ranks. Demand for consulting services has continued to grow and we have seen the growth of the scale players, the further specialization of mid-tier players, and the emergence and growth of new entrants. 

However, there has been a huge shift in how consultants serve business leaders and interact with their organizations, and what the consulting engagement aims to deliver. Traditionally, consulting was sequential and cascading in nature: from insight to planning to execution, with technology mostly confined to execution. Today, advanced analytics and accumulated data assets are becoming increasingly decisive in strategy formulation, and digital technologies can significantly streamline (and sometimes replace) the more routine kinds of analyses traditionally performed by rank-and-file consultants. In short, the days of email, Excel, and PowerPoint as the prime consulting tools are behind us. Consulting firms are actively building out and acquiring technological and analytical capabilities that will enable them to deliver more value to clients and embed those capabilities into clients themselves as a primary deliverable of the engagement

Clients as disruptors

We see as the major consulting industry disruptor that Christensen did not mention: clients themselves. Leadership teams across companies in every industry now face an increasingly complicated and urgent balancing act of simultaneously improving in the present while preparing for a radically different future. CEOs must equip the organization to navigate major change, while not missing a beat in terms of quarterly performance.

Many traditional management approaches are ill-suited for making the kind of game-changing leaps companies must make today. Successful transformation relies less on left-brain fact-based analyses and experience-based business cases and more on organizational imagination, engagement, ingenuity, judgment, and perseverance.

As the need to innovate and transform has become incessant and change is becoming less episodic, many companies are building out their own transformation offices to orchestrate those efforts. As a result, clients themselves are likely the fastest-growing implicit consulting segment as they look to incorporate consulting capabilities into the core skill set of management. Increasingly, clients require traditional consultants to supercharge large, internally led programs rather than execute stand-alone initiatives. There is a growing preference for low intrusion services that provide a seamless extension with their own organizations. And many leadership teams are looking for consultants who can help them master new technologies and build them into their operating models.

In sum, while the disruption of consulting Christensen envisioned is, in fact, unfolding, it is arguably more demand-driven (i.e., transformed by clients’ new priorities and the increasing role of technology in management decision making) than it supply-driven (i.e., fueled by consulting industry innovations).

New services, new players

The disruptive effect from changing client needs is driving the development of fundamentally new kinds of services, often created in concert or competition with new players. For example:

-      Modular consulting services, such as Eden McCallum, build on traditional interim management to offer a growing range of expertise (e.g., design, leadership and change management) on demand.

-      Work management platforms, such as Clarizen, Smartsheet, or Sensei Labs, provide organizations platforms with pre-configured workflows and codified on-demand expertise to help businesses more rapidly and cost-effectively organize and execute project management.

-      Functional enablement platforms, such as Midaxo, Sievo, and InnosightX support client organizations in specific improvement efforts such as M&A, procurement and supply chain, or product innovation to get more done with less effort. Repeated use delivers increasing benefits as cumulative learnings are turned into best practices and tools.

-      Business improvement platforms take this even further, are among the best-funded, and provide the most comprehensive data, services and support. Examples include Salesforce.com, Amazon, and Predix.

Business leaders should take heart from these developments. Although they face more complex and weightier challenges in today’s environment, there is an expanding range of modular and innovative professional services to support them. Many are flexible and technology-based, promising to deliver more for less. 

Traditional consultancies need to take heed of these new players. There remains a role for the “trusted advisor” to help clients address the considerable strategic and transformation challenges they face. However, services need to be tailored and flexible and need to fully leverage lower-cost solutions. 

Changing value propositions

Consulting is no longer on the cusp of disruption, it is in its midst. As a result, it is time for business leaders to fundamentally rethink what they expect from their management consultants. The toolsets available have expanded tremendously, as have the constructs and delivery models through which consultants can help shape and drive the CEO agenda. Above all, the challenges business leaders face today demand unprecedented creativity and flexibility. No client should be content with a consulting firm that is not assertively pushing the boundaries of traditional thinking and fully exploiting the power of new technologies

Johan Aurik is Managing Partner & Chairman Emeritus at A.T. Kearney         

?Jonathan Anscombe is Lead Partner A.T. Kearney NEXT digital solutions                           

Gillis Jonk is Vice President Strategy & M&A at A.T. Kearney

Related publications from the authors:                                                                            

The Case for Automating Leadership                                                                              

How Technology is Transforming Leadership