Historically, most consultants have done their best to differentiate from other consultants by touting a better process and/or better experience in a particular area. For small consulting companies this may be relevant. In larger companies neither of those factors have much bearing on the probability of success with the new project. Process is usually only partially followed and the team is likely to be significantly different from previous similar projects.
Unfortunately, there are two dynamics at odds here:
- Consulting companies are under more pressure than ever to maintain exceptionally high utilization rates (% of hours which are billable).
- Clients are starting to expect a point of view rather than just smart people with a process. With so many choices, a client can now pick the firm that has both the good process AND the well-matched point of view.
These two are at odds because when a consultant is “on the beach” (not billing) there is incentive to place them on a project that doesn’t match well with their skills/knowledge just to get them billing as quickly as possible. Thus, you rarely end up with the right resources on a project. If resources are less experienced, they are less likely to have a qualified point of view.
For decades consulting firms have been seeking knowledge sharing and re-use process and IT solutions that will help empower the less experienced consultant to jumpstart their performance on a project. However, the amount of sharing and re-use is still surprisingly low in large firms. They rely on smart people learning fast.
Rather than maintaining an exceptionally broad opportunistic profile that relies largely on relationship selling; in a Consulting2.0 world consulting firms should follow the Jack Welch strategy of being in the top 2 or getting out. Grow deep practice areas where sharing is rampant and there is enough market penetration to create an unrivaled critical mass of skills in that area. Success will beget word of mouth recognition which will support ongoing sales. Also, the best people will want to work there if they know they will get to interact with other experts.
Without going deep, large consulting firms run the risk of consistently losing out to mid-size firms. The mid-size firms will be able to compete on size because that particular practice are is the same size. They are less broad, have a point of view, and provide consultants with relevant experience every time.
What else is going to change in “Future Consulting”?
UPDATE: Since writing this I read Johnnie Moore’s blog post about organizations being made up of many moving parts and that we should be careful about over generalizing. That is certainly true.