Con­sul­tants, deserved­ly, have a mixed rep­u­ta­tion in the busi­ness world. On the one hand, there are those who believe the old saw that con­sul­tants bor­row a manager’s watch so they can tell him the time when he asks. Trans­la­tion: con­sul­tants have no val­ue-added; they only help man­agers fig­ure out the mean­ing of infor­ma­tion already at their dis­pos­al. The oth­er hand is that there are many man­agers who will attest to the val­ue of a third-par­ty point of view, of insights gained from con­sul­tants hav­ing worked at many oth­er firms and of ideas that were only gen­er­at­ed by the cre­ative fric­tion between prac­ti­tion­er man­agers and cere­bral con­sul­tants.

Complexity ManStrat­e­gy con­sul­tants, how­ev­er, are a spe­cial breed. When­ev­er your com­pa­ny decides to entrust the for­mu­la­tion of its strat­e­gy — the deci­sion about how it will com­pete in the years ahead — into the hands of a con­sult­ing firm, it basi­cal­ly means that some­one else is going to decide your future. Or, at least, help decide how your firm is going to try to man­age its des­tiny. That’s a con­sult­ing assign­ment with enor­mous respon­si­bil­i­ty. The con­sult­ing firm has to be sure it under­stands the indus­try, the firm’s com­peti­tors and their prob­a­ble plans and, of course, your firms strengths, weak­ness­es, oppor­tu­ni­ties and threats.

Yet, says John Gap­per on FT.com [link], there are many strat­e­gy con­sul­tan­cies who are, them­selves, lost.

Iron­ic? You bet. Seems like many strat­e­gy con­sul­tants can’t see the for­est or the trees. Says Gap­per: “Con­sul­tan­cy is in a funk as mid­sized part­ner­ships with ven­er­a­ble names, such as Booz & Co and Roland Berg­er, realise they have to do some­thing but can­not decide on what. Just car­ry­ing on is not an option – they face the spec­tre of Mon­i­tor, the con­sul­tan­cy that went bank­rupt last year, and was bought by Deloitte for only $120m.” Gapper’s post has lots of impor­tant details about the state of both big and medi­um-sized con­sul­tan­cies, with rev­enue num­bers to boot.

In the lan­guage of nextsens­ing, these firms are very deeply in a state of “dis­rup­tive ambi­gu­i­ty”. They are con­fused and over­whelmed by a stu­pen­dous array of con­flict­ing data about trends in the mar­ket­place. They must con­front the same real­i­ty in their own busi­ness that many of their clients have: that strat­e­gy as, first, plan­ning, and then, exe­cut­ing (two parts in a staged sequence in which con­sul­tants help with the first part and not the sec­ond) no longer works in today´s fast-paced and ambi­gu­i­ty-filled envi­ron­ment. Iron­ic indeed.

What to do?

The impor­tance of being embed­ded in the nature of the prob­lem becomes crit­i­cal to imag­in­ing — nextsens­ing — future oppor­tu­ni­ties. What you can observe, organ­ise and orig­i­nate depends great­ly on how close to the cus­tomer fir­ing line you are, and cus­tomer board­rooms and macro analy­sis is as close as most strat­e­gy con­sul­tants get — not very close at all and woe­ful­ly insuf­fi­cient in many cas­es in today’s dynam­ic envi­ron­ment.

Per­haps, you might think, this means that strat­e­gy con­sult­ing should be left to the big-tier firms alone. John Gap­per has some­thing impor­tant to say about that as well: “Only a minor­i­ty of what strat­e­gy con­sul­tants now do is blue-sky think­ing for CEOs. Two decades ago, 70 per cent of McKinsey’s rev­enues were from strat­e­gy and cor­po­rate finance but most now flow from hands-on work on risk, oper­a­tions and mar­ket­ing.” As I read this, a lot of con­sult­ing work these days is part-time knowl­edge-work­er labour. The big-tier firms have shift­ed into more of the “sec­ond stage” ser­vices of aid­ing in the exe­cu­tion phase of strat­e­gy, which has proved good busi­ness for them, albeit only tem­porar­i­ly (in my view) as the dis­tinc­tion between the stages dis­ap­pears and the need for more nuanced insights into shift­ing cus­tomer needs (at the micro, not the macro lev­el) and expe­ri­ences make the “arms length” posi­tion of con­sul­tants ten­u­ous at best.

Thus, this is the sit­u­a­tion for con­sul­tan­cies, as I see it. Lone ranger and small firms are depen­dent on their noto­ri­ety and/or the loy­al­ty of their long-time clients. The size and num­ber of oppor­tu­ni­ties for small con­sul­tan­cies keeps shrink­ing, as com­pa­nies pay for con­sult­ing only when it’s absolute­ly need­ed.

Medi­um-sized firms, as Gap­per so well describes, are lost.

The big firms (McK­in­sey, BCG, Bain & Co.) are increas­ing­ly doing nuts-and-bolts day-to-day work, which isn’t real­ly con­sult­ing at all.

I know too many peo­ple in the work­ing world who will not be sor­ry to hear about the demise of con­sul­tants, if this is what is on the hori­zon. As said, con­sul­tants have a very mixed rep­u­ta­tion.

But the chal­lenge right now fac­ing both con­sul­tants and busi­ness­es is the same: what’s next? Who­ev­er can answer that ques­tion first — and then act on it — will be the lead­ers of tomorrow’s mar­ket­place what­ev­er the indus­try.

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