Coatings World - January 2014

Strategies & Analysis

by Phil Phillips, PhD Contributing Editor phillips@chemarkconsulting.net

In Part One, we discussed the HBR conclusions: “We have come to the conclusion that the same forces that
disrupted so many businesses, from steel
to publishing, are starting to reshape the
world of consulting.”
We concluded with the two reasons,
up until now, HBR has for consultants
being immune to disruption . . . opacity
and agility.

Being opaque, the “black box” of the team room, causing extreme difficulty in the measurement of the consultant’s inputs in combination with the BIG GUYS agility, the flexibility to respond to the threat of disruption in the past, is being stripped away with new models from lesser-known more focused and targeted consultants.

In this issue we will examine two questions: Are Consultants in danger of disruption? & are Clients hiring the right firm for the job?

Legal Profession

For example, the legal industry has been
and is currently under pressure with
both their customer . . . . the disgruntled
client as well as their new competitor
models. An Advanced =Law survey of
general corporate councils found that
52 percent agree (and only 28 percent
disagree) with the statement that gen-
eral council “will make greater use of
temporary contract attorneys,” and 79
percent agree that “unbundling of legal
services . . . . will rise.”
“Cost pressures force clients to aban-
don the easy assumption that price is a
proxy for quality.”
So, the pressure is on ALL consultan-
cies but especially the branded large firms
where their fees are “line item” expenses
that stand out as large versus the mea-
sureable results clients receive.

These large branded firms have started to counter the pressure stemming from client inability to capture mea-sureable results by seeking out smaller, more-focused industry-knowledgeable boutique consulting firms,(to absorb or contract) in hopes by doing so they will maintain their higher fees but produce both solid qualitative and quantitative results in the process.

However, smarter more agile clients are finding these boutique consulting firms themselves thus “going direct” cutting enormous costs in the process.

Consultants... You Are In
Danger If...

• Recently it has become more difficult to win clients and satisfy them.

• You have been more and more left out of the loop when a client set of project objectives are being developed.

• When lower level personnel monitors your progress.

• You are competing with new rivals who are more specialized.

• Clients ask you to partner with other consultants.

• You are revising your business model in order to manage smaller projects.

Clients... Do You Have The
Right Consultant?

•What’s your time threshold for
outside consultancy review and
measurement? Have you examined
the opportunities for spreading
your work across more specialized
providers?

•Have you aggregated consultative spending across company to ID both the absolute amount and the patterns by individual firms?

• Do your consultancies make transparent the breakdown that underpins their recommendations? Can you standardize these analyses into hard assets?

• Do you bring in experienced professional services industry staff members when developing proposal and managing same?

• Do you have an “outcomes-based system” for measuring the quality of the providers work?

• Do your assessments “drive” decisions about future consultancy hirings?

It is very interesting to note that
HBR’s interviews with consultants
who rejected the notion of disruption
in their industry cited the difficulty
of getting large partnerships to agree
on revolutionary strategies. “Why try
something new, they asked, when what
they’ve been doing has worked so well
for so long?”
This is exactly the attitude that has
given a set of solid disruption opportu-
nity platforms to so many other indus-
tries over time . . . like the horse and
buggy to cars; the typewriter to desk-
top to laptop to iPad; land-line phones
to cell phones; mail to email and finally,
the stated disruption of the leaders in
the legal services industry’s top fran-
chised firms (Consultants), is undeni-
ably under way. CW