Who Transforms The Transformer

Large advisory firms (Big Four and large management consulting practices) have cornered an expertise in transforming how large businesses deploy capital, manage human resources and IT, accelerate innovation and implement strategy. Yet many of those same “expert” firms are desperately in need of transformation.

How else do you explain the increasing tension between the commodity end of their work (outsourced shared service offerings) and the desire to grow the high-margin, high-value strategic advisory business? It is a fraying piece of string for those, who desire to play in both segments.

The complexity of the advisory businesses is such that an increasing proportion of front line employees time is being reserved for internal issues (tweaking matrix organisation structures, new value propositions, problem solving and fees), at the expense of the client. Yet there are very few people in those firms, who have the skills and volition to want to lead the change (“champion”).

Safety lies in the belief that your brand will get you the first meeting with the large client. Yet a cursory google search reveals very few Partners in these firms, who are demonstrably centres of expertise or objects of strong interest to C-level operatives and the wider global media. Inherently, the transformation business is a pricing battle dressed up in pseudo value-based fees.

Indeed, changing the operating beliefs that inform the behaviour of Partners and Directors in those firms is very hard. The outliers or mavericks in those firms are tolerated to the extent that they inject some colour into client relationships but they are very rarely embraced in the inner sanctum. So you end up with external market forces largely determining the future of these advisory firms.

A client¬†wouldn’t take advice from Hilary Clinton on email etiquette or Donald Trump on diplomatic communication, why would they hire these folks? The only conclusion is that they feel safe in hiring lots of extra pairs of hands from a known brand so long as the price is right.

You’ll have a hard time convincing me that is right for the client and the advisory firm’s future.

© James Berkeley 2016. All Rights Reserved.

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