Difficult questions about business consulting

And (maybe) some answers

Strategy practice

And (maybe) some answers

There is an old joke about business consultants.

An old shepherd sits on a hill surrounded by his sheep, who are peacefully eating grass. Then, a young man wearing an expensive suit appears and asks:

– Do you want me to tell you exactly how many sheep you have?

– Why? — asks the shepherd

– Well, it is valuable information. Let me calculate your sheep, and I will take one as a fee.

– Okay, — agrees the shepherd indifferently, shrugging.

The young man opens his laptop, connects to a satellite, and takes and downloads a picture of the hill. Then he uploads the image into a computer program based on AI that calculates the sheep.

– So, you have 96 sheep, — he says proudly, takes one sheep, and is about to leave.

– You must be a business consultant, — says the shepherd.

– How did you guess?

– First — you came uninvited. Second — you told me what I had already known. And third — put my dog back on the ground.

I love this joke even though I am a business consultant.

Big consulting firms’ approach

This article was inspired by another one. Its author admitted that consultants are among the least worshipped business professionals in the world (the worse attitude people feel, from the author’s point of view, to the investment bankers), and he tried to investigate the reasons. I am not going to do the same. Instead, my goal is to “think out loud” about what value different consulting approaches can bring to a business in the future.

people tend to gossip about others’ failures

Some of my friends and clients used to go through the process of working on strategies with big international consulting firms. Even though some of them are quite skeptical about the results, in general, they all admit that it was not useless — at the very least. I believe that the dubious reputation of strategic consultants is the consequence of some failed projects — but who didn’t have one? However, people tend to gossip about others’ failures much more than about success; they love to discuss them and make fun of people who made mistakes — it makes them feel better.

It is impossible to describe all the methods and frameworks that big consulting companies use in a couple of sentences, but in brief, my friends and clients told me what they saw:

1. Big consulting firms collect tons of data about the company, the market, and other related industries during the projects.

2. They invite some experts with industrial expertise, and some of them work for the consulting firms

3. They collect a lot of benchmarks — from different countries and continents, comparing the client company with similar businesses worldwide

4. They interview employees (a lot)

5. They discuss their ideas with employees before putting them into documents. They respect employees’ opinions, but they are very persistent when it comes to their strategic initiatives.

6. They analyze business processes to find ways to improve their efficiency

My clients also recall long arguments with the consulting company’s employees about strategic proposals, although it is futile to judge who was right and who was wrong. On the one hand, the consultants, most of whom, after all, don’t have hands-on industrial experience, may have proposed some far-fetched ideas. But, on the other hand, it may have happened that the employees stuck too much to their “business as usual” practices.

Pros and cons

employees feel unheard and frustrated after a project ends

I am not going to criticize my colleagues from the major consulting firms. Moreover, I believe that sometimes such an approach bears fruit, and this is exactly what customers require. This avenue has plenty of advantages, such as follows:

1. The consultants are the ones who do most of the work — desk study, data collection and analysis, benchmark research, and so on. Unfortunately, employees who are ordinary drowning in a day-to-day routine don’t have time (and, often, expertise) to do this work.

2. They look (or at least try to look) at a company and industry from the outside. If a company attempts to devise a strategy on its own, it risks narrowing the opportunities spectrum to what its leaders have seen in their lives.

But this approach has its shortcomings as well. I’ve often seen that employees, especially at the average level, feel unheard and frustrated after a project ends. They believe that the consultants ignored their valuable insights and recommended some unrealistic moves. Of course, it doesn’t mean that employees had “good” ideas, whereas the consultants proposed “bad” ones. Moreover, I know from first-hand experience that the team members sometimes are better at criticizing someone else’s ideas than at offering their own initiatives. But if a team feels frustrated, it won’t help implement the strategy successfully anyway.

Another issue is that if the consultants have done practically all the intellectual work, the company will need to resort to their help again as soon as the strategy becomes outdated. And it will — rather sooner than later.

A couple of words about creativity and engagement

consulting companies will need to help client companies’ teams unleash their creativity

It is hard to imagine that this analytical approach can help a team work out a disruptive, innovative strategy. As I have already written, strategy is an act of creativity rather than a result of a cognitive effort. Using best practices and finding critical internal weaknesses that can be fixed to boost productivity are undoubtedly valuable, but it is not a way to create a game-changing product or a business model that will revolutionize an industry. In my mind, in the future consulting companies will need to help client companies’ teams unleash their creativity and help them devise their own strategic initiatives rather than offering them rigorously elaborated options.

I use several tools to reach this goal:

1. Foresight games as a way to envision the possible futures

2. Design thinking tools as a practice helping delve deeper into customers’ experience

3. Strategic games inspiring the team members to look at their products and the industry as a whole from a different perspective

Strategy is not a job done once a year

Big consulting firms help companies outsource some hard work of research, but I believe that all the significant team members must be deeply informed about what happens in their world — in their industry and outside it, inside the country, and on other continents.

Strategy is not a job done once a year — with the consultants involved or without. Instead, strategy is what a company does every day (read more here) to improve its business operations so that it can reach its long-term goals. Moreover, in the modern world, every firm must carry out three critically important kinds of activity — run, change, and disrupt — simultaneously. So, strategy is an ongoing work, and a strategic consultant should help a company’s leadership organize this work properly.

I believe that a strategic consultant is a coach, a mentor, and a methodological expert rather than a person who knows what to do. That’s my private opinion, but it is based on years of practice, both as a CEO and a strategic consultant.

Subscribe to read more articles on foresight and strategy. Follow me on Twitter or LinkedIn. Watch the video versions of these articles on YouTube.