Can Consultants Transform Themselves?

Boil it down to its essence and management consulting has always been about transformation. Specifically transforming their clients’ production transformation functions — how they transform inputs into outputs. So it’s a bit like a second-order transformation function. As it happens, consultants are also in the process of transforming themselves to meet their clients’ demand to “get it done.” This means translating strategies and plans into outcomes for their clients.

I recently attended goetzpartners’ “Transformation Re-defined” summit in New York, where the Germany-based firm opened its first U.S. office about two years ago. The summit targeted the confluence of innovation, digitization, and business model transformation with contributions from practitioners with first-hand experience driving these changes in their own businesses. One of the themes that emerged was the urgency businesses face to constantly reinvent themselves: to “get it done,” in the words of one of the participants. The technology is there. The need is there. What’s lacking are the will and ability.

Much of the transformation consultants are undergoing revolves around expanding up and downstream in their value chain. As an example, goetzpartners has a foot in both management consulting and executing transactions to implement strategies. Other examples include buying into the agency business and developing tools and technologies for executing strategies, most commonly in the form of process automation, whether instrumenting a lead-to-cash process or replacing bodies with bots in the back-office. Increasingly this comes with a variation on the old staff augmentation business, whether in the guise of ongoing managed services or standing up and running a new capability like an inside sales function for a client on an interim basis.

Getting it done is always a function of ambition and confidence. We want to do it and believe we can. Consultants’ traditional analytical heft and more recent value chain plays help in this. But they are transforming their service delivery models in another way to foster client buy-in. To their traditional best practice models they are adding “use cases” and showcasing them in tricked-out technology labs designed to demonstrate the “art of the possible.” They are also inserting change management offerings between strategies and execution activities that blend activating client employees with systems for governing change, something for which goetzpartners has also developed a distinctive methodology.

To be sure, all of this isn’t new. Consultants long offered implementation, vendor selection, and systems integration services. The difference is the integration as the execution becomes part and parcel of the consulting as opposed to a bolt-on phase. But there is something missing in all of this that can leave clients stranded somewhere on the journey from “which each think” to “we all agree to do” and “we did it.”

The problem is the elusive concept of alignment, which as one participant in the summit pointed out depends more on knowing what can go wrong than right with a strategy. The drive to get something done too often results in a pre-ordained strategy. And, absent the ability to “stop the line” (to borrow a leaf from the Toyota Production System), employees lack both the incentive and authority to do proper advanced problem solving. The result is that all of the well-intended change management activities occur in the context of an already-agreed strategy, which makes them highly vulnerable to changes in context and new insights. This is akin to the distinction between a pre-programmed process that depends on a forecast, which is invariably wrong, and a process that is built to respond to real-time experience.

Far better for the consulting process to make the strategy a product of alignment rather than the other way around. That distinction sounds academic, but it’s fundamental. It means strategy development like science becomes a search for provisional rather than permanent truths that feeds off experimentation. That, in turn, means companies need platforms that can scale across their organizations and beyond them to third-party suppliers and other stakeholders for ingesting insights, testing them, and drawing conclusions. In short, the data generated by a continuous process for managing alignment become the gold rather than the dross of strategy.

Consultants have much of the raw material they need to transform their process in this way; what they like their clients generally lack is the will to reconceive their value proposition. Because doing this entails a different client relationship: neither a trusted advisor nor a vendor, but instead a partner more like a joint venture or an alliance. Good strategy insights and all the recent consulting innovations don’t go out the window, although whether consultants best serve this value proposition by owning or partnering for downstream activities is an open question. Instead, they become inputs to a systematic alignment process rather than ends in themselves.

All well and good except clients aren’t making this transformation easy. They still buy primarily based on consultant personalities not processes and they’ve learned the hard way that the best way to manage scope creep is to drive to implementation and hedge their risk by dividing their spending across multiple consulting providers. So transforming consulting isn’t a one-way bet.

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