The case against management consulting.

Over the past year it's become fashionable to hate on management consulting and we are all in. While others have written about their questionable morals, our thesis has different pillars:

Management consulting has crippled business

Fifty years of management consulting has created a huge industry of analysts, consultants and experts. But companies haven’t actually gotten any healthier. 

The average lifespan of companies has declined from over 60 years in 1950 to less than 20 years today. This appalling statistic masks deeper, fundamental weaknesses within business and the economy. 

Companies aren't just dying sooner, they’re being birthed at a much lower rate; and power, talent and wealth are concentrating at a smaller and smaller group of mega-corporations, leading to deep inequality in business and the economy as a whole.

Management consultants are incentivized to weaken your company

Consultants prey on the have-nots of the industry. It may sound strange to call some of the largest businesses in the world “have-nots” but in today’s business culture they lack some critical internal capabilities that are needed to compete and continually innovate. 

However, leaning on traditional consulting to fill necessary gaps will not only be a waste of valuable time and resources, it actually weakens your organization. Because consulting models rely on you outsourcing vital strategic capability in perpetuity, your people are not only missing out on valuable growth opportunities, they feel less ownership of the business. Inevitably, they are less curious and imaginative about the path forward, and are given the impression that your organization can’t innovate without help.  

Consulting is a backwards-looking practice, the challenges of today require inventing the future

Traditionally, consultants are brought in to provide management with an objective point of view on how to tackle business problems within an existing market: how to accelerate or scale the business, how to make the business more efficient, how to make it more profitable. For many years, tackling these problems with an approach that combined vertical industry expertise, analytical scrutiny and strategic decision-making frameworks proved at least somewhat successful.

But these tactics need traditional companies to work. In our new era, consistency is less valuable than adaptability, longevity is less valuable than agility, and analysis of the past is less valuable than the ability to imagine and create the future. 

Younger businesses have become not just change agents but dominant players today, creating entirely new markets, and dramatically shaping or morphing existing markets. These companies have a genetic advantage in that imagination, experimentation, adaptability and agility are baked into the core of their businesses. They have aligned culture, capabilities, structure, systems, partnerships and metrics to ensure they constantly evolve and innovate. They thrive on change. 

Today’s business climate is a radical departure from where we’ve been in the past and this is creating massive headwinds for many businesses. In their desire to transform, many of these businesses are still turning to management consulting for answers. However, traditional consulting can no longer help you compete. 

Don’t outsource strategic and creative thinking, instead build capability within your own teams

The path to success in the new environment is rooted in adaptability, self-sufficiency and the ability of organizations to control their own destiny. This means building capability within, not sourcing it from outside. And it means cultivating a very different set of capabilities than were needed in the past.

At the heart of this mindset shift is a new capability – I&I – that combines two important skills:

Imagination – the ability to envision the future, and the business landscape in radically new ways. 

Ingenuity – the ability to invent new ways of applying assets, people and processes to solve new problems.

I&I isn’t a new department, or the domain of a thin layer of leadership. It must be built into the fabric of an organization - everything it thinks and does. I&I can’t be bought, it has to be cultivated, nurtured and practiced daily. The organizations that are leading today make it an expectation rather than an exception. Most importantly, it can only be developed from within – consultants and interlopers can’t magically give an organization this capability.

We'll be sharing more about this in the weeks to come.