Business Consultancy: Why The Old Model is Failing


Business Consultancy: Why The Old Model is Failing

There’s an old joke that a consultant is someone who steals your watch to tell you what time it is. As an entrepreneur and business leader, I’ve chuckled at this joke more than once. As a consultant, the fact that there is some truth to jokes like these sends shivers up my spine.

I first began my career as a consultant following a stint as a serial entrepreneur. One of the first lessons I was taught was to always put the client first. My response to this first lesson was quite simple:

As an entrepreneur, if I didn’t put my clients first, I didn’t eat, I didn’t pay the rent, I didn’t succeed.

I’ve always thought of consultants as doctors for business; good consultants are those who:

  • Engage the client and explore issues, opportunities and goals
  • Gather data and form hypotheses
  • Conduct tests and evaluations in order to prove or disprove hypotheses
  • Diagnose the issue and prescribe corrective measures

It doesn’t matter whether we’re talking about a business consultant, a business development consultant, an individual or a business consultancy. This approach is as valid today as it was 50 years ago when the modern management consulting industry first began, but the traditional model of consulting is going through rapid change.

Consulting exists when there is an asymmetry of information between two parties.

Plumbers, doctors, lawyers, psychologists, and consultants all engage their clients because the former knows something that the latter does not. In the world of business consulting, the knowledge gap between a business consultant and his or her client is rapidly closing.

  • The value of an MBA is increasingly under fire
  • The practice of taking young, gifted students out of top schools and label them “business consultants” by providing them with a few days of training is no longer valid
  • The Internet has democratized information, and many of the frameworks, methodologies and case studies that business consultants have traditionally relied upon are freely available on the web

The old model of business consulting is beginning to fail.

Clients are increasingly able to conduct their own analyses; to the extent that clients are in need of advice, it’s not around why their businesses might need to improve, but how to achieve that improvement.

Clients are increasingly looking for accountability and results—not simply advice.

To their credit, many consulting firms (including our own) are proactively responding to these changes and refining their business models and value propositions. At the Kabardian Group, for example, we operate under four key value propositions:

  • Measurable outcomes: We focus on business growth and profitability improvement; these are areas where it is possible to quantify the impact of our work.
  • Work from design through implementation: We partner with clients to deliver advice with real-world applicability; this provides a unique mix of strategic advice and tactical resources to implement the strategies we develop.
  • Capacity building model: Our engagement teams are lean and led by senior practitioners; rather than loading a project with junior resources, we partner with our clients and develop joint project teams; this reduces costs and ensures that insights from our work become part of the DNA of our clients.
  • Pay for performance: Because of our approach, in select cases, we are able to put “skin in the game” and work on a pay for performance basis with our clients. In such cases, our compensation is based in large part on the results we deliver.

While our model may not work for every business consultant or every client, it seems to work well for us. We often tell our clients that one of the keys to success is to remain focused and flexible at the same time.

At the Kabardian Group, we are focused on delivering lasting, measurable improvements to our clients’ performance. We happen to be quite flexible in terms of how we do so.

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