Is traditional consulting a future-proof business model? A plea for re-orientation
The consulting industry is currently undergoing a radical change. Traditional strategy, restructuring, and implementation consulting agencies are more and more under pressure. The causes are manifold and can be anything from not meeting client requirements to new scientific findings and easier access to current knowledge via the internet. Alternative consulting approaches are focusing on the traditional consulting model’s weaknesses and become more and more important. We summarized four reasons for a reorientation of traditional consulting agencies.
What worked once does not automatically work everywhere.
New insights in the area of organizational psychology stress the individual character and dynamic of organizations. Up to the point that people in the management sciences are already talking about a “social shift”. Behind this is massive criticism of management, organizational, and consulting models that are solely based on the premise that linear “one fits all”- interventions are an appropriate tool to shape and change organizations. One of the reasons why these “n-step” models are utilized in traditional consulting is their simplicity, transferability, and fact-orientation. The chaotic reality of organizations is usually blanked out or not perceived due to the applied model’s top-down character.
The fact that this criticism is justified can be illustrated with the example of change programs that are still dominated by traditional consulting concepts. Only around one third of these programs achieve the desired results. The remaining two thirds fall short of expectations of fail completely.
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Numbers, data, and facts are only the tip of the iceberg.
Traditional consulting focuses strongly on numbers, data, facts as well as their analysis. For this reason, the well-known management coach and psychologist Kets de Vries ironically calls classical consultants “brains on a stick”. The traditional approach reaches its limits when it comes to behavioral or cultural changes or dysfunctionality in leadership, communication, or team work. Our new understanding of organizations as dynamic, social and emergent networks suggests that these factors play a critical role in most projects. Therefore, classical consulting often merely scratches the surface without considering these “soft factors” properly. In addition, classical consulting usually lacks the required expertise in psychology, sociology, and organizational behavior.
Sustainable change cannot (only) be controlled in a top-down manner.
In traditional consulting projects, changes in the organization are controlled by the top management. The result is a high pressure for change and quick successes. However, these results are often only visible as long as the pressure for change is maintained by the top management. The organization is behaving like a river whose flow is altered by a cut down tree. If adequate structures in the riverbed and its periphery were not prepared, the water will find a new path around the tree sooner or later. Water level and water pressure will go back to its initial state. However, the necessary structures can only be achieved bottom-up through the involvement and honest commitment of employees and leaders on all levels. Without being an (accepted) part of the organization, consultants are only partially able to fulfill the role of change agents.
Consultancy will also play an important role in the future. Having said this, their methods and concepts will undergo an immense change in the upcoming years. In this blog we introduced some arguments for this re-orientation. In our next blog we will present alternative consulting models that have already started going in a new direction and we will discuss how these models can be combined with traditional consulting approaches.
References and further reading
Hughes, M. 2014. Management Change. A critical perspective. 2nd edition. London: Chartered Institute of Personnel and Development.
Smith, A. C. T. and Graetz, F. M. 2011. Philosophies of Organizational Change. Cheltenham, UK: Edward Elgar.
Giddens, A. 1984. The Constitution of Society: Outline of the Theory of Structuration, United States: University of California Press.
Kets de Vries, M. F. R. 2011. Reflections on Groups and Organizations: On the Couch With Manfred Kets de Vries. West Sussex, UK: Jossey-Bass.
Markus is one of the founders of CQ and leads trainings in the area of Management and Mechanical Engineering. He holds a Master and Doctoral Degree in Economics and Computer Science from the Technical University of Vienna and a MSc in Organisational Behaviour from Birkbeck College, University of London. Being a dedicated "Knowledge Worker", Markus has continued his career with various private sector assignments in the management consulting, automotive and mechanical engineering industry.