Surely, Consultants are getting more calls from and appointments with clients these days. Business is looking up, but with a difference. Clients in the new world of business have distinct demands/expectations from Consultants, and it has direct implications on how Consultants need to deliver.
Clients are looking at “Speed to Value” underlined by greater sense of urgency. The eagerness to compensate for lost time due to recent slow-down, and enhanced gains associated with “being first in the market place” mean clients are expecting Consultants to deliver advise/results in much shorter time. This means the traditional liberty of Consultants learning about biz on clients paid time and taking detailed approach to problem diagnosis are no more acceptable. Consultants with sufficient understanding of clients business armed with rapid but effective diagnostic tools and agile way of delivering value iteratively will be in demand.
Consultants’ uniqueness to contribute will be tested in terms of Value Delivered, which span both “thinking” and “helping do”. Given the frequent talent movement between clients and consulting firms, standard industry frameworks, logical thinking (excel sheet based analysis) and industry best practices repository are no more sufficient for ammunition with Consultants to serve clients. The compelling Value Add has to come from intellectual assets (encapsulating collective wisdom of earlier experiences) and implementation enablers (tools, accelerators etc) that promise unique insights, rapid diagnosis, and speedy, risk managed execution benefits.
Clients are ready to partner with consultants to experiment in creating Value. It means that the business share from “Possibility centric services” is going to increase at the cost of “Problem Solving services”. Creativity has gained immense importance with clients and all proposals are tested on their creativity quotient. Accordingly, clients are ready to bet on new experiments with associated risks as long as potential gains are high and the proposition, if found successful, is scalable at global scale in short time. Consultants need to continuously develop radical proposals with sufficient promise and seek Clients that are ready to partner. This also means that Consultants need to be more comfortable in betting their share on Value Delivered.
In short, the traditional Consulting Business of advising clients on solving problems, using generic approaches while learning during engagements and charging for time spent is getting replaced by upfront ideas driven, possibilities centric, assets assisted, value-sharing linked pricing approach to Consulting Business.
Have you also witnessed the above shifts in Clients expectations? What other changes have you noticed? Happy to hear, as always!!!
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Thought provoking article. Possibility centric services will require different value estimation techniques like "valuing the option" instead of traditional NPVs which uses one time decision making (go or no-go). For e.g., the NPV may be negative at present for the project but having the option may be valuable, which may become fruitful later e.g. oil exploration, patents etc.. So, factoring in options(possibility) value will help in correct value/benefit estimation for 'possibility centric services'.
ReplyDeleteAbsolutely true. The industry is bouncing back but the client demands have changed significantly where in clients are looking forward to generating rapid value from consultants. A recent post from Economics points towards this direction as well : http://www.economist.com/node/18774614?fsrc=scn/fb/wl/ar/adviceforconsultants
ReplyDeleteHowever, this brings us to the question of sustainability of the existing revenue model for the consulting firms. They may need to move away from the traditional consumption based model to something more innovative and value based.
Indeed, the need for being creative is going to be quite pronounced. Consulting firms need to relook at organisation redesign and overall capability. From Organisation redesign, consulting firms may employ social media more aggressively to leverage expertise, build on each other ideas and accellerate peer group learning - peer group here goes beyond your collegues in your industry/verticle. From overall capability perspective, firms have to reinforce their ability to help execute, using some real value adding assets. The game is really changing for the consulting firms!
ReplyDeleteValue sharing linked pricing may be the way forward for consulting firms. Actual savings in cost and actual increased revenue attributable to consulting assignments would determine the way forward.
ReplyDeleteHi Tushar
ReplyDeleteVery interesting insights! Value sharing seems to be the way forward. Taking forward Sanjay’s point, the measurability of the value generated, even though feasible, can be complicated when used as a basis for pricing of services because of conflicting interests, and long term realization of benefits from the consulting services by the clients. I would be interested to know what are your thoughts on this.
Kirti