“No one ever got fired for hiring IBM.”
It has been an open secret for decades, that consultancies are too expensive for too little benefit for your business. Yet the big consultancies have remained unchallenged and undisrupted. Given our current situation, this might change quickly. If it was ever important for companies to create real benefits and do change that genuinely changes things, now is the times. In the months to come, companies will ask their consultancies for clearer and progressive answers, maybe even to bring honesty to the table that might challenge many comfortable relationships. In my experience, most consultancies won’t have answers, because they were running their businesses in the same way as their clients. So what do we need in the consultancy of the future?
What value do we want?
Consultancies can provide capabilities that a business doesn’t have, or a business can’t otherwise acquire. It should always be temporary. If there is any reason for a company to keep a consultancy around for too long, then it just shows that there are other issues that should be fixed first. 70% of change efforts fail to create a business benefit. Even if we can’t bring down that failure rate, we should at least bring the investment down to a smaller, iterative size. Get your first customer or success before you go for a 20 project three-year engagement. This is de-risking 101. Being absent from the real world for over 20 years just can’t get rectified in 6 months. This is where the value to be created should be more evident from the start. Despite that, I have walked into multi-million-pound efforts, where there were flimsy goals, with zero connection to business benefits. I have seen research teams in projects that were aimed at fixing existing known bugs. All of this existed without any clear regard to business benefits or an idea of how big the problem is.
The result of most of this was that consultancies could throw anything at the problem, and it was hard to counterargue because the target was unclear. The same was true for the performance of the team itself as often; no one knew what anyone was aiming at achieving. This is not uncommon.
In other projects, the targets were very clear. How to get there was often a creative process, but as long as everyone agreed on the outcome, people could perform, and milestones could be met.
So as a business or as a consultancy, how well can you phrase a problem statement with a target that can be tested against business benefits? Do we need a new type of engagement and collaboration here?
Why has no one asked for lean?
The startup era has shown us that three people in a garage can disrupt industries. The goldrush era and low-hanging fruit of disruption are gone. Many organisations are still bloated and inefficient when it comes to basic tasks, like having a functioning website, tracking how well customers do with the service the company provides or reacting to a customer request.
So why have companies not insisted on implementing much smaller and nimbler teams? All I see is that consultancies throw about three times as many people at a problem than necessary. When I ask why, the answer tends to be, “That’s what the client asked for.”. Many companies are trying to implement agile, but they still end up working on massive releases, that end up being unfocused and slow. How serious are we at creating an offer that is as flexible and outcome-based as Airbnb, who recognises that every solution throws up a new set of challenges and Monzo, who can create 1,000 different business account products to test them? Apart from training people in new capabilities like service design, are you interested in turning your team into progressive, nimble self-organising units? Or do you want to keep what you have and order a few gizmos or tricks for everyone? Are you asking for a change that can affect your business bottom line? Can you enable a consultancy to do that? As a consultancy, can your cleint trust you enough to make the changes actually needed? If not, when are you finally sitting down and having that conversation?
Can consultancies deliver?
Consultancies are just companies. The bigger ones are as old as their clients. They both have existed in the same context without feeling the need to evolve because you know, it worked.
Ever since the internet, things have drastically changed. Let’s remember that early computer nerds were laughed at and at times put in jail. Since e-commerce became a thing, agencies and consultancies, the same people who looked down on this emerging field, suddenly claimed within months to be specialists at what they couldn’t make heads or tails of yesterday. Social media and creative technologist in the advertising industry, technologists in every startup and service design in all the big consultancies, were all added quickly without understanding it or listening to its values and opportunities. People were hired for a lot of money to be arm-candy at pitches.
I can’t blame companies for selling the next best thing, that’s just good business. And if you only understand the new mindset being another optional colour on your car, then you will treat it as just a feature. Unfortunately, those new things are not and don’t behave like linear add-ons; they are exponential systems and opportunities. They need contexts to work properly.
IT consultancies, in particular, are trying on the moniker of design-led these days. As a company, how can you make sure that the consultancy with no experience in that area can deliver the service?
In my own experience, I had to take extra time for aligning design activities with the business benefits, as no one else was asking for it. Why do we accept so easily that value can’t be traced, when it can? I would disagree and challenge any consultancy that can’t. I would also contest any company to start doing that and including it in any effort.
How can we find better quality consultancies as clients? Do we need new capability partnerships? Can we start selling value-based outcomes, rather than tickboxes? Is this not like the guitar that is catching dust, because you finally wanted to start learning how to play?
Can consultancies survive?
Considering the above, what will big consultancies do, if the big accounts are not valid anymore? What shift in contract and service should happen if we need to get more transparency on effectiveness? Could the reign of efficiency be over in favour of effectiveness?
It has been a messy few decades full of promises. All of the visions and efforts have been easily thrown aside by a virus and its wicked problem interdependencies. The future does not just need to make companies digital; they need to be able to react to wicked problems. Caught up in an old paradigm and old network of friends, we are all failing, even more than the existing 70% that we know of.
I would like to hear from business leaders and consultancy owners on what their expectations are or what their most essential questions are. Having worked with companies and in consultancies for decades, I can see how much this needs an overhaul. Let’s do it! Fast, but smart!
Exciting times ahead!