Disrupting the Consultants: Clayton Christensen and Friends Sound the Alarm

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The disruptors are getting disrupted.

In Consulting on the Cusp of Disruption (Harvard Business Review), Clayton Christensen, Dina Wang & Derek van Bever point out the coming disruptive changes in the world of management consulting.  

And the big boys are getting ready.  McKinsey Solutions, for example, is essentially a business model innovation that could reshape the way the global consulting firm engages with clients. It’s about “embedding software and technology-based analytics and tools providing ongoing engagement outside the traditional project-based model.“  According to Christensen and friends, “McKinsey Solutions is intended to provide a strong hedge against potential disruption.

So, will software robots replace the consultants?

No just yet, but the authors warn that the threat from smaller, more nimble competitors is real:

At traditional strategy-consulting firms, the share of work that is classic strategy has been steadily decreasing and is now about 20%, down from 60% to 70% some 30 years ago.

Wow. That’s some serious disruption, don’t you think? Clients are focusing on value-based pricing instead of per-diem billing.  (And not a moment too soon!) If you’re engaged in any kind of consulting work, or even services, you would do well to buy the article. (As a bonus, you get to learn how the legal market got disrupted!)

Here’s a sample of their thinking: the three consulting business models observed and cataloged:

disruptingconsulting.jpg

New upstarts like IDEO bring a collection of skills and capabilities not found in traditional firms. They bridge “the disciplines of industrial design and innovation consulting… Its unique mix of talent and strength in solving interdependent problems makes it hard to imitate.”

Christensen, Wang and van Bever point to the model of IT services as a threat as well. Emerging market competitors like
Tata Consultancy Services and Infosys. (I’m not so sure.)

IMHO, the big boys have been asking for trouble.  By focusing on harvesting and/or fleecing clients, they left the doors open for nimbler and more insightful competitors.  I think there’s one more business model that may have been overlooked: the individual, branded consultant

Now, more than ever before, companies want to connect to the originator, the source of an idea - instead of going with organizational middlemen.  Thought-leadership translates to market leadership. Some of the big firms are hiring these gurus to harness their I.P. but the list of independent, disruptive gurus is growing fast.

thought_leader.jpgHere are some examples of how specialized individuals (gurus) are taking over markets from the big firms because of their specialized expertise and insights >>

  • Peter Drucker - The Original D-I-Y management consultant (R.I.P. Peter!)
  • John Hagel III* - Big Shift + edge strategy (now with Deloitte’s Center for the Edge)
  • John Seely Brown* - Education and Learning (he works part time for Deloitte’s Center for the Edge)
  • Tom Davenport* - Competing on Analytics
  • Stuart Hart* - Sustainability and B.O.P.
  • Vijay Govindarajan* - Reverse Innovation 
  • Tammy Erickson* - Talent Management
  • Marshall Goldsmith* - Leadership
  • Dean McMann* - Customer Intimacy
  • Mo Kasti* - Physician Leadership (see, it’s getting hyper-specialized!)
[* disclosure: these are clients or former clients of mine]

The list just goes on and on:

  • Larry Keeley - Innovation (with Doblin, acquired by Monitor, then Deloitte)
  • William Eggers - Government Solutions (with Deloitte)
  • Jakob Nielsen - Usability 
  • Roger Martin - Strategy
  • Alan Weiss - Pricing
  • Seth Godin - Marketing
  • Dan Kennedy - Entrepreneurship
  • Perry Marshall - Internet Advertising
What’s interesting is that so many firms were founded or driven by thought-leaders: Monitor (Michael Porter), Innosight (Clayton Christensen), Ogilvy and Mather (David Ogilvy), so that the industry is well aware of the value of big-thinkers.  Where they have failed is in nurturing them and allowing them to shine (e.g. where is Oliver Wyman hiding Adrian Slywotzky?).  Deloitte seems to get it - they acquired Monitor, hired John Hagel and JSB, and encourage the building of the individual brands like William Eggers.

P.S. - here’s an interview with Clayton Christensen done over 10 years ago.  We talk about disrupting the consulting industry in passing!

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This page contains a single entry by Christian Sarkar published on September 16, 2013 11:00 AM.

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