Consulting is facing the most fundamental change in its history. After more than 100 years of stability, an alternative business model is emerging, and this is being driven by smaller players seeking a foothold in the market and by clients who are becoming much smarter in how they buy consulting services.
Enabled by affordable new technologies, the democratisation of knowledge and entrepreneurial agility, disruption is coming to consulting.
When Clayton Christensen began writing about business disruption in the late eighties, his theories were embraced as a perceptive critique of the challenges being faced by the old industrial war horses like steel mills.
Corporate giants, dependent on traditional technologies, were usurped by smaller, more innovative competitors. The old barriers to entry were crushed beneath the wheels of new technologies that were becoming affordable to a wider group.
While such disruption made sense in industry, surely professional services, with their reliance on intellectual property and human capital would be immune.
And so it was for a time. The opaque characteristics of professional services, and the nature of a relationship that involves bringing in expertise the organisation lacks, made judging the capability of a supplier difficult.
The legal field was the first professional services area to open itself up to the effects of disruption. Big business in America grew in-house legal counsel teams who not only provided the first line of advice but also a more informed approach to buying legal services.
These new, savvier buyers were able to unbundle large-scale legal projects and allocate tasks to smaller, more cost effective suppliers. And over time they saw no problem in using firms that used alternative staffing models and new technologies to streamline services.
Soon, that most traditional of traditional professions, the legal industry, had been transformed by new players and a new kind of client.
Three forces have created an environment in the consultancy sector for disruption to happen:
Rapid technological developments have made functions, data and automation efficiencies more widely available than ever before.
The informed buyer
With larger consulting firms turning over 20% of their staff each year, there are a large number of highly experienced consultants available for hire. Many join client firms and are able to offer more sophisticated procurement and management of consultancy services.
New ways of working
The same trend has created large numbers of highly experienced consultants who have chosen to follow a freelance lifestyle.
The result of this positive disruption is the emergence of a new model of consulting. New consultancy firms with small back offices and low overheads, are now able to provide lean teams of consultants to deliver measurable results at a competitive price.
Change Associates is one of the first firms in this space.
To discuss the disruptive approach to consulting contact Grahame Russell on 0203 405 2470
Consulting on the cusp of disruption, Clayton N Christensen, Harvard Business Review, October 2013
The Disruption Machine, Jill Lepore, New Yorker, 23 June 2014
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