While generalists from major consulting firms have historically thrived in the consulting landscape, advisory work needs to be more industry specific and trusted than ever before. The current Covid-19 crisis could lay the foundation for small and medium-sized consulting firms to become the new trusted and sparring partners for industries like aviation in the post pandemic era.
With the coronavirus pandemic resulting in a deep recession, the largest consulting firms are ultimately no more immune to the forces of disruption than any other industry. The consulting industry is primarily human-driven, and the golden rule of this industry is to charge the clients with hourly fees, rather than outcome or value-based pricing.
Consulting is much more than trading advice for money; it is more like a bundle of different types of services and functions bound up in a prestigious, expensive package.
As a client-driven industry, with clients’ needs changing constantly, consulting firms are forced to adapt their services, structure and operations quickly to remain competitive. Being nimble, flexible and agile has arguably never been more apparent than during this unprecedented global crisis. Many businesses now face a unique set of challenging pressures and they are turning to expert consultancy.
However, the consulting industry, in other words, has become inefficient, stagnant, and slow to adapt – even if large consulting firms have weathered existential crises before. Digital transformation is rendering counsel from consultants out of date nearly as soon as they are made. If we dig deeper into the portfolio of services offered by large consulting firms to clients today, it is clear that a tectonic disruption is hitting the consulting industry just as it has hit many other industries like the aviation industry before.
One of the conventional criticisms I have heard from several executives and managers is that the majority of consulting firms send generalists into companies to do a specialist’s job. Almost all senior partners were proud generalists. Junior partners, or those with less clout, specialised. Over the past few decades, large consulting firms always practiced the situational, “it depends” style of consulting.
Clayton Christensen, former professor at Harvard, compared the way most leading consulting firms today operate to an aircraft’s black box. They produce a solution to a problem but the visibility of what happens during that process is opaque. It can be highly difficult to measure and assess how effective a consultant’s recommendation was in generating a positive impact on the business.
According to research from Source Global Research, about 70 percent of the clients think that the quality of work done by the largest consulting firms can be rated either “very good” or “good”. However, the perceived difference between the quality of work done by the top-rated and bottom-rated firms is a meagre 9 percentage points.
They have a notorious reputation for using off-the-shelve solutions, which have been tried and tested before but are not tailored specifically to the client’s needs. They increasingly fail to meet the requirements of the client. From my point of view, the so-called one-size-fits-all model can be described as a diminishing business model in the post-pandemic era.
Until recently, the large consulting firms were the only places aggregating expertise from all those different avenues. Now it is much easier for businesses to get access to subject-matter experts with industry know-how through smaller and medium-sized consulting firms.
There is no need to work with large consulting firms to talk to someone with in-depth knowledge about aviation for instance. As industries like aviation become more complex, so do the needs of the businesses relying on the support of consultants.
Consultants nowadays are expected to know the operational reality of customers and offer tailored services that meet industry, functional and client demands. This in turn enables consulting firms to add more value to clients.
The client-consultant relationship is functioning at its best if the consultants as subject-matter experts provide information, expertise, insight, execution and implementation support to the client. Often, clients are more interested in sharing the risk of change programmes by partnering with consulting firms – instead of simply hiring consultants for a temporary period.
In times of shifting client demands and expectations for tailored services, having a wide network of subject-matter experts helps smaller and medium-sized consulting firms be in a position to deliver better value-added and tailor-made solutions for clients. Industries with higher complexity, like aviation, need new trusted and sparring partners in the post pandemic era.
Linus Benjamin Bauer, founder and managing director of Bauer Aviation Advisory, and visiting lecturer at the City University of London
by Staff Writer
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Specialist consulting firms now have the long-term advantage from the current pandemic
With the coronavirus pandemic resulting in a deep recession, the largest consulting firms are ultimately no more immune to the forces of disruption than any other industry
Linus Benjamin Bauer, founder and managing director of Bauer Aviation Advisory, and visiting lecturer at the City University of London
While generalists from major consulting firms have historically thrived in the consulting landscape, advisory work needs to be more industry specific and trusted than ever before. The current Covid-19 crisis could lay the foundation for small and medium-sized consulting firms to become the new trusted and sparring partners for industries like aviation in the post pandemic era.
With the coronavirus pandemic resulting in a deep recession, the largest consulting firms are ultimately no more immune to the forces of disruption than any other industry. The consulting industry is primarily human-driven, and the golden rule of this industry is to charge the clients with hourly fees, rather than outcome or value-based pricing.
Consulting is much more than trading advice for money; it is more like a bundle of different types of services and functions bound up in a prestigious, expensive package.
As a client-driven industry, with clients’ needs changing constantly, consulting firms are forced to adapt their services, structure and operations quickly to remain competitive. Being nimble, flexible and agile has arguably never been more apparent than during this unprecedented global crisis. Many businesses now face a unique set of challenging pressures and they are turning to expert consultancy.
However, the consulting industry, in other words, has become inefficient, stagnant, and slow to adapt – even if large consulting firms have weathered existential crises before. Digital transformation is rendering counsel from consultants out of date nearly as soon as they are made. If we dig deeper into the portfolio of services offered by large consulting firms to clients today, it is clear that a tectonic disruption is hitting the consulting industry just as it has hit many other industries like the aviation industry before.
One of the conventional criticisms I have heard from several executives and managers is that the majority of consulting firms send generalists into companies to do a specialist’s job. Almost all senior partners were proud generalists. Junior partners, or those with less clout, specialised. Over the past few decades, large consulting firms always practiced the situational, “it depends” style of consulting.
Clayton Christensen, former professor at Harvard, compared the way most leading consulting firms today operate to an aircraft’s black box. They produce a solution to a problem but the visibility of what happens during that process is opaque. It can be highly difficult to measure and assess how effective a consultant’s recommendation was in generating a positive impact on the business.
According to research from Source Global Research, about 70 percent of the clients think that the quality of work done by the largest consulting firms can be rated either “very good” or “good”. However, the perceived difference between the quality of work done by the top-rated and bottom-rated firms is a meagre 9 percentage points.
They have a notorious reputation for using off-the-shelve solutions, which have been tried and tested before but are not tailored specifically to the client’s needs. They increasingly fail to meet the requirements of the client. From my point of view, the so-called one-size-fits-all model can be described as a diminishing business model in the post-pandemic era.
Until recently, the large consulting firms were the only places aggregating expertise from all those different avenues. Now it is much easier for businesses to get access to subject-matter experts with industry know-how through smaller and medium-sized consulting firms.
There is no need to work with large consulting firms to talk to someone with in-depth knowledge about aviation for instance. As industries like aviation become more complex, so do the needs of the businesses relying on the support of consultants.
Consultants nowadays are expected to know the operational reality of customers and offer tailored services that meet industry, functional and client demands. This in turn enables consulting firms to add more value to clients.
The client-consultant relationship is functioning at its best if the consultants as subject-matter experts provide information, expertise, insight, execution and implementation support to the client. Often, clients are more interested in sharing the risk of change programmes by partnering with consulting firms – instead of simply hiring consultants for a temporary period.
In times of shifting client demands and expectations for tailored services, having a wide network of subject-matter experts helps smaller and medium-sized consulting firms be in a position to deliver better value-added and tailor-made solutions for clients. Industries with higher complexity, like aviation, need new trusted and sparring partners in the post pandemic era.
Linus Benjamin Bauer, founder and managing director of Bauer Aviation Advisory, and visiting lecturer at the City University of London
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