There was a great article in the Financial Times entitled The strategy consultants in search of a strategy.
This article comes on the heels of the very vigorous discussions going on at Relationship Economy and here at Smarter-Companies about the future of consulting which make it clear that consultants themselves see change coming.
And it’s a continuation of the discussions we have had since the publication of Intangible Capital where we talk about the implications of the rise of the digital economy. One of the big implications we wrote about was the shift from strategy to innovation as a management focus (the others include the shift from org charts to networks, the shift from command and control to orchestration and the shift from accounting to ICounting).
Strategy is at its roots a largely top-down exercise that assumes the people at the top have and know how to use all the knowledge necessary for a company to succeed. But one of the basic changes in the digital economy is that knowledge and collaboration reside throughout a company’s network. This means that emergent strategy, or innovation, is growing in importance. This view says that information and learning need to come from the bottom up and outside in rather than just the top down.
It’s in this context that I see the disruption of strategy consulting. You’re not helping much if you facilitate management teams sitting in ivory towers to develop their views of what needs to be done and then implement “change management” programs to essentially “sell” the strategy to all the underlings. Consultants in this case are caught in their own industrial, top-down mode of thinking.
The alternative is consulting that helps companies listen, engage and learn from their stakeholders. What do the company’s stakeholders need? How do they experience the company? What are the drivers of growth and profitability? This alternative is what leads consultants to the study of intangible capital. Today, 80% of the value of the average U.S. company and 100% of its competitive advantage is intangible.
Strategic consulting is being disrupted because the nature of strategic advantage is being disrupted. Today it’s about intangibles like people, process, partners and purpose. To be a “strategic” consultant, you have to help companies see, measure and optimize these intangibles. It’s not about formulating a plan and driving execution (although there will always be a place for this). It’s much more about understanding the intangibles driving the future success of your clients’ businesses and incorporating stakeholders in the conversation about how to maximize the potential of these intangibles through innovation and growth.
Comments
Hi Craig. There will always be a need for top down controls but a lot the top down work needs to be synthesizing the signals and learning coming from the bottom up and outside in.
I am more and more convinced that corporate measurement will increasingly be in thebhands of the organization's stakeholders. That's why we are focusing our ICounts Graphs platform on stakeholder assessment of all the key intangibles of an organization. Does that make sense to you?
Hi Mary,
I find very appealing your message about making use of the knowledge and collaboration throughout an organization's network, rather than crafting a strategy at the top level and implementing it. I would love to hear more about the connection between a more dispersed taking in of information and learning (not just at the top level) and the optimization intangible value.
I could see an argument that command and control does create intangible value i.e. top management doesn't just acquire hard assets - it also may prescribe policy around people, process, partners and purpose. Perhaps the distinction is that some intangible assets are more intangible than others e.g. training employees in the principles of sound customer service vs. a detailed procedure manual.
Craig