The end of heavyweight professional services
Accenture Interactive bought ad agency Karmarama at the end of 2016 so they can ‘do it all’ for their clients. But this is exactly the opposite of what clients need and most want.
Before I go any further, let me say that we know some of the team at Karmarama, are really pleased for them, and are sure they’ll continue to do great work.
Obviously the deal is interesting because it’s the first time a management consultancy has bought an unabashed creative agency (despite Karma’s protestations of being data led).
In an article in Business Insider, Brian Whipple, Senior Managing Director, Accenture Interactive at Accenture, explained why they did the deal:
What’s also completely different is that while we are about designing customer experiences, we are also equal parts about running, enabling, and managing these customer experiences for clients.
It’s not just about building it and turning it over to them, it’s often about running the assets and technology, where we would have a relationship with clients that would probably be 10–20x in size of what a traditional player would have. It’s a multi-year, retention-based relationship partner model.
So Accenture Interactive’s proposition, now extended with the acquisition of a creative agency, is to design, build and run entire customer experiences for clients who don’t want to do it. Clients who don’t want to run their own customer experiences. In the customer era. Hmm.
OK, I get it. I get that there are clients who don’t want to run their own new customer experiences, because they’re too busy with business-as-usual, or because they’re too unsure about the new technology, or because they can’t hire in the talent to do it, because they don’t have the right culture or ways of working to do it right.
But these clients are a dying breed. They’re the ones who propped the old professional services model up long past its sell-by date. Who colluded in the continuation of the status quo of 3 year offshore website builds, 9 month TV ad production processes and ‘meat in the room’ because it’s what they know, they’re quite comfortable with it, and they have no appetite to change it before they retire.
A new era of clients
But a new generation of clients are coming along, who came up on the internet, who realise that they a) can’t outsource the future of the their business, and b) won’t pay for the waste of a bloated waterfall approach. And they’re not using professional services firms, and so their fees are collapsing.
Most management consultancies are responding to this threat, not by innovating on their own model, but by trying to wring the last value out of the old model by acquiring the other kind of professional services businesses whose fees have collapsed and whose model is suddenly very old fashioned — advertising agencies.
Bring those two models together and we’re heading towards giant outsourcing operations incentivised to be as big, heavy and expensive as possible in all they do. This might juice revenues in the short term as we have seen from the rapid rise of management consultants’ digital offerings, but it isn’t going to last for long, in a world increasingly defined by lean, continuous, on-demand and lightweight ways of working.
This will only exacerbate the trust problems between clients and their ‘partners’, caused by misaligned incentives, which could be the catalyst for real change in the sector.
A new era of professional services firms
We’re now in a world where organisations have taken in-house lots of the roles that they used to buy-in from consultancies or agencies; where they work directly with the tech platforms like Google or Facebook; where the best ex-consultancy or agency talent has ‘unbundled’ and clients can pull them together into virtual teams on-demand; where giant global clients are willing and able to work with a small 7 person company on a global solution.
The new professional service needs to be enabling organisations to do things themselves, not doing it for them. Instead of clients giving agency to their partners, the partners need to give agency to their clients.
At KBS Albion we drive change in our clients’ organisations by co-creating new strategies, brands, communications or products that send their business in a new direction, and by building their team’s capability to operate them. We roll our sleeves up and work side-by-side with them in teams that are always cross-functional, often co-located.
We learn through doing, through practical experiments (like a lean startup), but we have no production factory to fill, so we can be open minded about what the solution is.
The outcome we’re incentivised on is getting our clients operating the new offer as soon and as well as possible, and then getting out of the way. That means we have to stay as small, lean and focussed as possible.
We see other smart ‘post-agency’ players evolving their own offers in a similar space, which gives us confidence that we’re onto something: the new era of lightweight, agile professional services.
What do you think? Do you think clients are happy to outsource ever larger chunks of their business to consultancies? Or do you agree that they should own their own future? Please join the debate in the comments. And, if we’ve stuck a chord, please tap the heart and share with colleagues who might be interested.