Working for 23 years in two of the most dynamic consulting businesses in the world, during one of the most exciting periods of change for HR, has been thrilling. And it’s been an eye opener. My experience of over 40 client engagements has led me to a major conclusion: the large consultancy firms are fundamentally broken and require reinvention.
I’ll explain…
Large consultancies are falling behind
The behemoths of consulting are tied into a spiral of increasing cost bases, unchecked (and even accepted) talent turnover and, most alarmingly of all, a cultural acceptance of the fact that increasing client rates every year is an acceptable solution.
The conflict at the heart of it all? The need to staff and keep utilised vast numbers of talented people who are already hired and already on the payroll. For clients, this means a push to put employees on projects at the expense of finding the best people for the work. People who may be readily available through extended networks of associates, alumni and partner organisations.
At any given time, 20-25% of consulting staff are on the bench. Fruit rotting on the shelf comes to mind as an analogy… The logic says they must be utilised and sold. Only when there’s no internal fruit to draw on can the firm reach outside to find the strongest talent.
It’s no wonder clients are getting restless
Clients are increasingly engaging contingent workers and contractors before approaching consultancies. Rising rates, slow innovation and a lack of specialised talent is turning customers off. And who can blame them?
Adding insult to injury, big consultancies have also been reticent to partner with new, leading-edge tech companies. Why? Because giant firms are too large and/or slow to make decisions, too concerned about losing T&M revenue, and possibly unwilling to share their piece of the pie.
A new breed of consultancy is emerging
New consultancies are popping up.
They’re digital and virtual.
They embrace open source technologies.
They’re fluid, fluctuating ecosystems of like-minded, nimble specialists.
And these people have a lot in common: they value trust, mutual support, reciprocity, and a shared belief in and focus on doing the right thing for clients.
It’s a revolution
These ‘elastic’ consultancies have minimal operating costs, which means they can bring 5 -10 more years experience to each role, for the equivalent mainstream consulting rate card. They’re also harnessing new technologies, for smarter, more efficient executions.
It all adds up to a compelling case. Lower costs, more experience, wider perspectives, greater innovation and a much-improved ability to adopt accelerators. Products such as ProFinda, DaPulse, and Basecamp are just some of the accelerators altering the face of consulting forever, right now.
Freed from worrying about cost recovery and the staffing and utilisation of benched teams, these new consultancies are able to focus on making incredibly valuable connections through their networks, broadening and deepening their capabilities, and rapidly forming flexible teams of highly experienced top performers.
That’s how they deliver exceptional crowd-sourced solutions, while providing great value for money.
In short? It’s an exciting time for buyers.
At LACE, we do things fundamentally differently from ageing, large consultancies. To discover more, explore our offerings.
Aaron Alburey FCIPD, Member of the HR Guild, father to the L, A, C, and E (Lauren, Alex, Caleb and Eve) in LACE Partners and bouldering enthusiast
