Consultants - time for a change? Mike Hesketh (June 2001)   Times are changing but are consultancies changing with the times? Traditional consultancies are beginning to recognise the challenge that the Internet and the New Economy are bringing to their customers. It isn't a case of just an additional service, the New Economy changes the fundamental way that business works and many consultancies have been slow to recognise and meet the challenge it presents. So what is the future of consultancy in this brave new world? Consultants have a bad press If you can, do - if you can't, consult! A corruption of an old saying but many would say its true. Let's face it - consultants have a bad press. If they're not charging obscenely high rates they're reworking old information and selling it back to their customers. They try to convince us that THEIR products, THEIR services and THEIR concepts are the only way to meet the demands of the marketplace - and succeed. In setting up inaccessible offices in their customers' place of work they select which "best practice" method should be applied, apply it and then disappear leaving their customers wondering what happened, without the skills to embed or support it. Name changes, mergers and talk about a "New Economy" haven't changed entrenched attitudes to delivering consultancy services. Despite this there's clearly a demand for consultants. The number of consulting companies is increasing, along with the quantity of individual consultants. Companies employ them for many reasons. They may have an immediate need to resolve a serious business problem, supplement current skills or to play scapegoat should anything go wrong. There are plenty of consultants who can fulfil the demand. A more flexible workforce that depends on contractors and consultants filling the skills gap has replaced the "job for life". How many of these consultant "Company Workers" will truly have the skills of the experienced consultant is debatable. This lack of consultant awareness and a willingness to "try anything" in a desperate need to earn fees will probably lead to another downturn in the credibility of the consultancy sector. As an alternative, organisations have sprung up that claim to train and educate the company to tackle major changes on their own. What such companies fail to provide, is the relevant and up to date experience, as well as the generic knowledge that is vital for customers to avoid the common pitfalls, maximise the benefits and embed their business programmes. The New Economy and how we do business In the past, the effects of poor consultancy services have been less vital to business survival. Change didn't need to be that rapid nor precisely targeted. The consumer has always been at a disadvantage compared to the massive resources of major organisations. Companies could dictate what products would be sold and when, at their own pace - generally slowly. Even incompetent consultancies could keep up with that pace of change. But the Internet and the so-called "New Economy" has changed the status quo. Communication has changed beyond all recognition and yet the enabling technology is only in its infancy. Soon we will have continuous access to the Internet wherever we are and whenever we want, not to mention location based services. But the New Economy is far more than just technological breakthroughs it's a major change in the way companies do business. Access to a wide range of up to date and relevant information has led to an unprecedented need for companies to change rapidly to meet shifting customer demands and expectations. For example, fifty years ago the only source of information on insurance was from a local broker. Ten years ago companies suddenly developed call centres, to put them "more in touch with their customers" and customer service advanced to the point where we could now telephone four or five insurance businesses nationwide in an attempt to get a more competitive quote before we got bored and frustrated. Earlier this year I checked over 2,500 companies globally in less than 10 minutes on the Internet. Like many others consumers I can investigate and demand cheaper or better value services tailored to my requirements because of the leverage access to fast information on the Internet gives me. In fact, like many others, I now discount any organisation that doesn't have a responsive and personalised presence on the Internet. The new economy has switched the balance of power from the large corporate to the individual consumer. Communities are now developing on the Internet at sites such as www.letsbuyit.com, www.zed.co.uk and www.uboot.com, amongst others, that are increasing the power of the consumer by getting groups of people with common needs and expectations to join together and force large organisations to listen to their needs. As a result, companies must now change more and more rapidly to match the offerings of their competitors, meet the shifting needs of their customers and take on the inevitable technology breakthroughs. Few companies have the necessary skills to match the pace of change and need help to survive in the New Economy. Can the consultancy sector respond? Consultants in the New Economy If rapid change is the driver of the New Economy then change, programme and project management will be the major consultancy skill in the future. The capability to change rapidly and effectively is not common in large organisations. Such abilities are not only a structured set of skills but also a state of mind that isn't easy to adopt. A fleeting glance at many major household names shows they have, or are, being superseded by younger, leaner and more mobile new companies. True, the dotcom fiasco has shown that strong management and planning are still the bedrock of a sound successful company. However, the New Economy demands more - sound management with the ability to accept and manage change as a way of life. Customers are now demanding that their business consultants support their delivery projects with strong programme and change management frameworks and traditional consultancies are more than willing to claim expertise. However, large management consultancies often have the same inertia as their traditional customers - an inability to recognise the true demands of the New Economy and a failure to manage change effectively. Traditional large consultancies are doing their customers no favours by reworking tried and tested generic ideas. "Company Worker" consultants are still stuck with the baggage of their large organisation experience, without the expert consultancy background and find it difficult to accept the pace of change required. Finally, training and education consultancies rely on the outdated experience of their training consultants and the structured processes of the past. All they can do is teach the old skills to companies who desperately need the know-how to survive in the new economy. Consultancy is dead - long live the consultant So is the consultancy sector responding to the change? Slowly - very slowly. Nearly all of the major consultancies, especially in the Web/New Media environment are developing consultancy sectors that specialise in strategic programme management as well as delivery. A cursory glance at the recruitment pages of any newspaper or Internet site will highlight the increased demand for generic programme and project management consultants with a flair for strategic management. Clearly major consultancies are beginning to respond to the challenges. However, the transformation is happening slowly as the importance of the New Economy is still not fully accepted in large consultancy organisations. Management of rapid change is still quoted in proposals as an "add-on" fee generating service rather than an integral part of the delivery process. The mindset and approach of large consultancies are notoriously difficult to change as they have a great deal of financial, as well as emotional, investment in their products. By the same token simply adding "e" to services doesn't mean they are New Economy solutions. E-procurement, e-commerce, e-tailing and e-consultancy concentrate on delivering services in an Internet environment but do not tackle the major process, organisation and facility changes that customers will have to deal with in parallel. But all is not lost. To meet the demand a new breed of flexible consultancies are springing up. Small but focussed they don't sell "best practice" solutions. They don't promise to deliver every aspect of your programme on their own - recognising that a tailored encompassing solution will demand the expertise of many groups. Each part of the alliance is an expert in its own field rather than a jack-of-all-trades. However, they bring together the best virtual consultancy practice tailored to your change and ensure that the partnerships are managed effectively and transparently from the customers' point of view. From the customer's perspective they deal with one, ideal, organisation that will deliver a solution for their needs. The virtual consultancy's inherent experience and ability to work with, rather than for, their clients in a partnership means they develop solutions their customers own - both emotionally and legally. More importantly, these consultancies can rapidly change with the demands of the programme, marketplace or internal business priorities. They concentrate on rapidly developing business capabilities that bring their customers measurable benefits rather than just delivering an agreed schedule of services. Before they leave they make sure the change is embedded into the organisation and that the customer understands how to make such changes in the future without outside help. They don't borrow the watch and sell you the time - rather they help you build the watch and teach you how to tell the time before they leave. What to look for in your next consultant… Large consultancies will continue to survive in the New Economy simply because they have the time to adapt and change to meet the needs of their customers. The signs are that the real, non-IT, challenges of the New Economy are slowly becoming recognised and the mindset is changing. But whether this will be enough to meet the challenge of the virtual consultancy practices is uncertain. You'll know that your consultant is ready for the New Economy if they display the following qualities: The management of change is an inherent part of their proposal rather than an add-on service They can demonstrate an holistic approach to your programme that encompasses business, organisational, process as well as technical expertise They believe in the training and education of your organisation not just in what they've delivered but also in how they achieved that change The programme is phased to allow you to develop a solution in partnership rather than providing you with an off-the-shelf solution. An organisation of experts is created that will often include resources from outside their own company, tailored to your needs. The co-ordination and management of this team, however, will be transparent Whatever your needs make sure that you consider the wider aspects of the change you're going to undertake not just the technical delivery. Be prepared to accept rapid change as a consequence of your new business environment and make sure your consultants are prepared to change and learn with you. Summary We've seen how the New Economy, and its' demand for rapid change, is shaping the business/customer relationship. The nature of consultancy is changing and not all consultancies have reached the point where they can help you deliver in that environment. By understanding the New Economy your business can develop a real, and lasting, competitive edge - just be careful in your choice of advisors!