BrazilHedging against disruption in the consulting industry
In today’s disruptive environment, disruption is everywhere. Yet while consultants are famed for their expertise in helping clients navigate disruption and build ‘future-proof’ businesses, they should at the same time beware that they don’t get out-disrupted themselves, writes Gayane Grigoryan, a UAE-based consultant specialised in innovation and marketing strategy.
Today, the 4th industrial revolution is upon us, disrupting almost every industry. It has challenged players in every field from music to manufacturing; and consulting firms – from industry giants to boutiques and niche players – are no exception in their need to address challenges and adapt.
From one perspective, the position of consulting as an industry has never seemed more secure, in fact the size of the global consulting industry is according to estimates from analysts bigger than ever, at between $200 billion to $500 billion worldwide, depending on who you believe.
But just as their clients are always under threat from new players and technologies, consultants too are not immune to the forces of disruption. Moreover, consulting meets all the qualifications to be considered vulnerable to disruption; particularly a few major players (over half of the worldwide market share is concentrated among top 10 players), relatively outdated business practices used since 1960s and slow technology adaption.
The question for today’s consultants is not whether there is a future for the profession, but whether they are going to be part of it. The below figure illustrates the main forces driving disruption and challenges defining new rules of where to play and how to win in the consulting industry.
Particularly, consulting service providers are provoked to rethink their unique value proposition towards a holistic, brand/differentiation-driven approach focused on outcomes supported by tools, artificial intelligence, robotics, automation, staff augmentation, to underpin the advisory work.
This development emphasises the need for T-shaped consultants combining both deep specialist and broad generalist ability as well as shift from transactional relationships to long-term value co-creation.
A closer look at critical success factors:
1. Manage brand and reputation
Given today’s competitive landscape, a positive brand reputation is essential to improve recognition among buyers. The latest client survey from analyst firm Source Global Research reveals that brand and reputation are the most important attributes to clients, followed by subject matter expertise and sector knowledge.
So how does a consultant build a positive brand reputation and ensure it is maintained? As per Gartner, brand reputation audit stands on three essential elements: differentiation (from others in the market), resonance (with buyer needs), and credibility (backed by customer reviews).
Only one in four clients can distinguish differences between competing brands. This means that unless consultants manage to set their brand reputation apart, prospective clients won’t likely remember them or may even confuse them with competitors. A huge emphasis is placed on the strategic advantage of a “brand” as a differentiator.
2. Bridge the critical skills gap
Talent is the stock in trade of consulting, and failure to be able to meet the needs of clients makes individual consultant redundant and consulting firm irrelevant.
The latest report on ‘Consulting Skills for 2030’ by the Centre for Management Consulting Excellence identified cyber security (77%), artificial intelligence (76%) and self-employment (75%) as top ranked drivers of change that are likely to impact on the skills that will be needed by consultants by 2030.
The steady invasion of hard analytics and technology (big data) is a certainty in consulting: strong technical competence, sector expertise enables consultants to act as capacity builders assisting client to build their skills and ensure project success. However, “timeless” consulting skills such as relationship-building, problem solving and change project management will remain very important in 2030.
3. Long-term trust building
The subject of trust is prominent in the consulting research and trust building is central to the activities of most effective consultants. Qualities such as clarity, proficiency, and consistency are at the core of trust-building.
Further reading: Why building trust and brand belief is key for consulting firms.
It’s interesting to highlight that for independent consultants and small firms it is essential to build credibility around its core set of capabilities, as they don’t have the power of scale like big firms do. They also need to demonstrate experience and expertise hence the need to focus largely on case studies and industry specific marketing efforts tent to be more effective.
The power of online content engines is also very useful to the consultants as it allows them to share their thought leadership and expertise to a large targeted audience at minimal cost.
About the author: Gayane Grigoryan is an accredited and certified consultant, as well as a member of the Chartered Institute of Marketing. She counsels clients on topics including marketing strategy, innovation and new business models.
