Working with large consultancies: stop or encore

Key Takeaways

Sourcing Consultants is not easy and choosing the right consulting firm is complex. There are many parameters to consider. And building a solid list of preferred providers, identifying who would be best, depending on your context, is a real jigsaw puzzle.

But that is also what makes consulting sourcing so exciting and so impactful when done correctly. And the good news is that it is possible with the right approach and the adequate level of consulting knowledge to do it right.

Transcript

Hello and welcome to episode 54 of our podcast: Smart Consulting Sourcing, THE podcast about Consulting Procurement.

My name is Hélène, and I’ll be your host today.

Each week I’ll give you the keys to better use, manage and source consulting services. This week, I’ll answer the question: “Working with large consultancies: stop or encore ”

Last week, I told a brief History of Consulting

We saw that The History of Consulting goes way back and is still ongoing. As clients have started to understand better what value consultants can bring them, many changes will shape the industry’s future: Brexit, Covid, remote working, etc.

But moving forward: Should you continue working with large consultancies. Short answer: yes. But why exactly?

The recent scandal with the NHS Test & Trace system led by Deloitte is on many minds. And many executives are frustrated with the increasing prices, lack of actionable recommendations, and juniorization of the consulting teams.

And indeed, there are many small to mid-sized consulting firms with high-quality consultants and in-depth expertise to service their needs.

Is it, however, a good enough reason to throw out the baby with the bathwater?

A vibrant and diverse market

You have to keep in mind that the market is vibrant and diverse

There are roughly 10,000 Consulting Firms globally, representing 250,000 consultants, without counting the independent Consultants. As a rule, large Consulting Firms tend to be one-stop shops (offering all capabilities and industries in most geographic regions). At the same time, smaller companies more often focus on one or two dimensions only.

Most Procurement Executives are looking at the market through the lens of capability/industry. They know that one-stop shops such as Mc Kinsey, Bain & Company, Booz Allen, Big 4, and consorts can cover the entire spectrum. So they identify a few other players focused on one capability or one industry. But this is not the only way to look at the market.

You can also screen the market through the Strategic vs. Operational dimension. Strategic Consulting is about high-level strategy, transformation, and large organization projects, very often at the Company’s highest level, instead of more operational projects such as lean, team effectiveness, purchasing, etc.

Sometimes you can approach the same capability with either a Hard or a Soft angle. For example, if we take the org design capability, Hard would be org charts, job descriptions, processes, and handbooks, while Soft would be team alignment, culture, change management, and talent.

And you can use many other dimensions to screen the market: Strategy Players with a touch of digital vs. Digital Players with a zest of strategy, Global vs. Local, Blue Chips vs. SMEs, Diagnosis Experts vs. Implementation Specialists, etc.

Consulting Firms are rarely present on the whole spectrum for one dimension, even the large ones, but the odds are pretty high that whatever your problem is, there is a Consulting Firm focused on it.

It is people that make the market

But ultimately, it is about the people!

As surprising as it may sound, identifying a Consulting Firm with the right expertise only gets you halfway there.

Consulting is a human-to-human service, and consultants are not commodities. To better source a project, executives need to understand who the people behind the Consulting Firms are and assess the fit with your Company’s context and culture.

The background of consultants can be essential to understanding the type of projects they can work on. For instance, life-long consultants will bring you perspective and benchmark, while former executives can bring you hands-on experience.

Always ask for detailed consultants’ profiles with a specific focus on those that will ultimately ensure the project’s delivery.

In fact, we could say that each consulting firm has its own DNA.

Suppose you can position a company on all these dimensions. In that case, you can identify its consulting DNA Profile, understand the range of projects they add the most value, and assess their proposal with reasonable expectations. Ultimately that will allow you always to maximize the chances of success for your Company.

When does working with large consultancies make sense?

If you want to accelerate the execution of a project and mobilize a significant amount of resources in a top-down fashion (post-merger integration, for instance), large firms with their very pyramidal organization and very structured processes and methodologies can be the right fit.

We recently heard a CEO explaining to the company employees in the context of an extensive transformation: “Do not worry, we use one of the most famous brands and have spent millions in Consulting; the execution will be flawless.” Not sure this convinced the employees amid the restructuring, but this was obviously his prime criteria.

Suppose you want to align and embark your management team on a disruptive transformation. In that case, you may want to leverage a boutique firm’s expertise and seniority that can customize on the fly their methodology to maximize appropriation.

Sometimes the Consulting Firm that led a very detailed analytical diagnosis is not necessarily the right one to facilitate the change process.

The right consulting firm is the one that will get you the best ROI for your project. And you often don’t know before you lay down the expectations if you should work with a small boutique or a blue-chip consulting firm.

Don’t underestimate the political value of your project.

It is no secret that there are political moves at play within any organization, big or small. And it often gets tricky to navigate complex terrain, even for an Executive, especially for an Executive actually. However, consultants can effectively contribute to smoother processes, introduction, facilitation of new measures, and much more.

A recent example of this political value is how the French president, Emmanuel Macron, has used the BCG prediction model at the beginning of the Covid-19 pandemic. The organization has indeed a stellar reputation. In a situation where you need to justify a decision or use a scapegoat working with a large consulting firm is your only solution.

More generally, the visibility of a project at the shareholder or the board level can legitimate working with large consulting firms. Also, you can work with the consulting firm used by the upper level. The consultants will speak favorably on the project, and who could criticize your choice if you use the same than your boss?

Sourcing Consultants is not easy, but there is hope.

In conclusion

As we see, choosing the right consulting firm is complex. There are many parameters to consider. And building a solid list of preferred providers, identifying who would be best, depending on your context, is a real jigsaw puzzle.

But that is also what makes consulting sourcing so exciting and so impactful when done correctly. And the good news is that it is possible with the right approach and the adequate level of consulting knowledge to do it right.

That’s it for today. Next time, I’ll tell you how to create value through demand management.

In the meantime, if you have any questions, or want to learn more about what we do at consulting quest, just send me an email at helene.laffitte@consultingquest.com

You can also have a look at our website smartconsultingsourcing.com to know more about our book and download free templates & guides to improve your consulting sourcing.

Bye and see you next week! Au revoir!

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