The Future of Management Consulting

As consultants we all know (and enjoy trotting out to our clients) the old adages about the state of the taps in a plumber’s house and the state of the shoes on a cobbler’s child.  It allows us consultants to open up transformational conversations with our clients based on their nagging fear that they may be missing a trick and be falling behind the competition.  However, as part of a global industry that has enjoyed almost continual growth for the last 50 years and is now busy helping the world adapt to the new “digital realities” the irony that our own core business model has not changed for 50 years is seemingly lost on us.

Yes in some cases we’ve lengthened our “value chains”, moving away from advice and process reengineering to providing deep IT system integration skills and capabilities and in some cases provided outsourced capabilities to our clients too, and yes it is true that in the last 20 years we have had to source those capabilities globally, but, the actual consulting part of the value chain – advice and process change – has seemingly remained unchanged.  Or has it?  Surely our own consulting business models are virtually untouched by Web 2.0 and our businesses continue to survive and thrive?

My belief is that actually a quiet revolution is taking place in the world of management consultancy and the last people to realise it are, of course, the consultants themselves.  So what exactly is this revolution?

Imagine a typical challenge given to say an HRD from the CEO at any time over the last 50 years.  “We are not delivering on our promises to manage the performance of our people – fix the performance management system”.  20 years ago the HRD sets up a team to explore the challenge and may well have ended up buying support from a management consultancy to map and reengineer the performance management process.  Today the HRD’s first instinct is to look at what pre built software packages are available as either additions to their ERPs or as standalone web hosted solutions.  The role of the management consultant as process reengineer is gone.  The process is already optimally engineered based on global best practice – all that remains is to configure it to that client.  The consultant may provide some minimal procurement advice on which package to buy and maybe a bit of configuration support but that is all. 

So is HR typical – absolutely - all across the back office (HR, Finance, IT, Procurement) the process reengineering is now the domain of the software providers.  And now the really scary bit for consultants – now the back office has been “owned” by the software providers they are now looking to make in-roads into the middle and front offices – picking off process after process and offering it all to the client via a Web 2.0 solution.  This effectively removes the need for management consultancies as engineers of process.  So is the solution to head back to the heartland of “advice givers” – ironically if there is one thing we know that Web 2.0 can deliver it’s the experiences of others at speed – and we are now seeing new model consulting websites springing up to “crowd source” real solutions to very real business problems at a very interesting price point.

So why are the consultancies not collapsing faster when their heartlands are eroding – ostensibly two key reasons – firstly organisations are still undergoing huge amounts of organisational change and are still looking for large quantities of flexible and bright, capable resources to augment their own staff teams at a price point that only large quantities can render profitable and secondly the Web 2.0 capabilities are still not seen as honed enough by the baby boomer CEOs to replace sage experience and advice.  However, as the X’ers and Y’ers take over in the boardroom and Web 3.0 (the Semantic Web) takes hold then expect the cost of sage advice to plummet too.

So what is the future for management consulting – in my opinion – it is an industry that needs to have a serious look at its own taps or shoes and invent a new business model or very, very quickly it will be rendered obsolescent by the very same technological tsunami it seeks to advise its clients on.

Merlin strikes again... SME Digital Innovation

When will UK businesses start taking the SME business world seriously?

Note to large corporates - you're missing a massive opportunity 

In exciting recent news, UK Government experts announced the re-discovery of SME’s, long thought to be extinct by lenders and service providers alike.  Delighted by this ground breaking insight, Vince Cable has proclaimed that the Government will never forget about SME’s again and fight the good fight to support them; and rightly so.

Traditionally, businesses, lenders and service providers have been exemplary at licking the boots of big corporations and catering to their every whim.  However, whilst SME’s continue to amble towards the dangling carrots offered by lenders and service providers the reality is they still get poor antiquated service and the moment a big Corporation rocks up with blank cheque, SME’s are shown the door faster than Ken Clarke at a Women’s Rights convention. 

So why are the services provided for SME’s still so shockingly poor when there’s such an obvious gap in the market?  The SME market stands at an estimated 4.5 million organisations in the UK, producing half of the total UK private sector turnover.  Surely, providers are missing a trick?  The reality is the SME Market has been poorly served because it is notoriously diverse and demanding - having the tastes of a big corporate and the financial flexibility of a high street shopper.

However, in order to grow, service providers must start to realise that trying to force feed the same services suitable for big Corporations to the  SME’s is like trying to squeeze a pig into a spandex jumpsuit.  One size does not fit all.  Instead, they should capitalise on this gaping void in the market and gain competitive advantage by catering for the needs of SME’s and providing services that complement them. 

The way to do this is simple and is facilitated by the capabilities of the new digital technologies. Provide quality, provide flexibility and provide services that work for the customer, on mobile and online, 24:7.

That’s it. 

Innovation: Rubber to the Road

CEOs demanding “Innovation” from their direct reports without specifically providing bonuses for delivering it, is as pointless as a chocolate fireguard.

Having spent the last three months talking non-stop to executives about innovation, I have got to the end of my patience.   Let’s be clear – without specific innovation targets being attached to executive bonuses the chances of an organisation miraculously delivering new growth are non-existent.

 

The word ‘innovation’ has been echoed again and again by organisations across the globe as if by merely repeating the incantation it will increase revenue and promote growth.  No results occur and yet we continue to beat the hollow drum and chant the slogan ‘innovation’ without any real substance, commitment or direction.  Corporate UK has lost the plot.

The secret to success in realising innovation is simple.  In order to transform ideas into business value, innovation requires investment in intellectual effort and resource, an appetite for change, and a top-level steer through remit and reward to put the pedal to the metal.  Without this commitment and prioritisation and a framework for execution, employees will take their bright ideas home with them. 

Most crucially, innovation demands endorsement and accountability at a senior level through clear targets and incentives; a driving force to translate thought into action and put the rubber to the road.

Rant over – for now

Digital Customer Experience Tips and Trends

Excited by talk of new digital customer experience trends, and never one to miss out on writing a good list, Capgemini decided to think about what New Year resolutions customer experience professionals should be thinking about to ensure they make 2011 a year to remember:

1)      Learn something new
Twitter, Facebook, LinkedIn, YouTube and TripAdvisor are no longer hamlets in the ‘land of the brave’ but rather regular features of day-to-day life for millions of people (for instance, did you know that Facebook has over 500million active users, 70% of which are outside the US (Facebook stats) whilst in April last year, the co-owner of Twitter announced at a press conference that the site had over 105 million registered users and was growing at 300000 a day).  The past couple of years may have been spent talking about Web 2.0 but 2011 is the year for doing and organisations need to get involved sharpish if they don’t want to be left behind.  Read Capgemini blog posts on  foundations for success with social media, looking to implement social media in 2011and six social media lessons from businesses from 2010 to get some ideas about how you can start if you haven’t already.

2)      Fight the fat
Quantity is better than quality right?Especially when it comes to channels and communicating with customers. Actually, no.  Getting the right channel mix is by far more important than simply offering lots of channels,  as shown by the success of First Direct, which was been named Which magazine’s ‘Best Financial Services Provider’ for the 21st year running in 2010 (quite impressive given that it has no branches and offers internet, telephone and mobile banking only).  If you’re interested in trimming your channel fat I’d recommend a recent blog on Delivering high-quality, low-cost Public Services across channels (which has implications beyond the public sector) alongside blog.channelmanagement.com  for  some interesting points that start to de-mystify the channel challenge.

3)      Spend more time with family and friends
Ok, a pretty fundamental one – it’s cheaper to retain current customers than it is to attract new ones.  Whilst this isn’t new, it is a worsening problem in the age of digital media.  The amount of ‘noise’ consumers are faced with everyday means organisations have to push harder to make themselves heard and even when they do win a customer, that individual is empowered to such a degree that securing loyalty is quite the battle.  Organisations need to crack it though, so why not look for tips from Loyalty 360’s top loyalty trends for 2011, advice from an author on the Social Customer website or a previous Capgemini posts on what Dutch insurance firms are doing in this area?

4)       Enjoy life more
Have you heard of Doritos’ ‘Crash the Superbowl’ campaign, Coke’s Expedition 206 or Jimmy Choo’s ‘Trainer Hunt’?  These are prime examples of organisations understanding that customer engagement today is about more than transactions and good customer service.  Today’s customers expect to be entertained and rewarded like never before and organisations need to embrace this.  The usual suspects can help with this (e.g. Facebook, Twitter, YouTube etc) whilst less known examples like FourSquare can help you differentiate but technology’s only half the battle – creating a killer campaign is really where the challenge lies.

5)      Get organised
Finally, if any organisation is to be truly customer-oriented and reap the rewards associated with this, they need to be set up accordingly.  This can be scary and will often require major transformation but without it, initiatives risk being confined to limited success.  Organisations need to understand that customer-centricity is not a buzz word, or the focus for one quarter, or something ‘we’ve got to do because everyone else is’ but rather a way of managing an entire business, motivating staff and delivering results.  How to take 5000 people on a journey, Forrester’s case study on Cardinal Health  and How to build a customer centric culture all  make for interesting reading and provide a starting point for thinking about how to implement a fundamental shift to a customer-driven organisation.

All that’s left is for organisations to start implementing some of the ideas above and for spectators to see if the predictions for 2011 come true.   Undoubtedly there’ll be winners and losers throughout the course of the year, now we just need to see who’ll end up where.

Digital Transformation: 2011: A round up on what’s going to be big in digi...

Digital Transformation: 2011: A round up on what’s going to be big in digi...: "2011: A round up on what’s going to be big in digital customer experience this yearAs we build momentum in 2011, there’s plenty of interesti..."

2011: A round up on what’s going to be big in digital customer experience this year

As we build momentum in 2011, there’s plenty of interesting reading out there on predictions for what will be big in digital media and customer experience this year.  So, here's a simple guide to the big themes that will be prominent in Digital customer experience in 2011.

The ‘professionalisation’ of digital media:  This appears in many guises  throughout the different lists and I’ve chosen ‘professionalisation’ to reflect trends to do with firms understanding that ‘social’ isn’t the remit of one employee or one team but is now the nature of their business, and indeed all business.  Examples to look out for include: increased demand for in-house digital talent; recognition of Facebook and Twitter as standalone channels; increased awareness of the importance of privacy, and investment to ensure this is handled appropriately; use of social feedback to inform strategic decisions; and increased maturity and use of data analytics.

Let’s go mobile:  This one’s simple – it’s the importance of mobility.  We’re talking mobile as a channel, mobile web and mobile apps. If the experts are to be believed, mobile will be big business in 2011.  There are still loads of questions about how it’s going to work, whether solutions will be supported on all popular mobile operating systems and how ROI will be measured but we should start to see some answers emerge over the next 12 months alongside a whole host of exciting new solutions.

The human touch:  For all its techie wizardry, digital media is ultimately still about people and we can expect to see more of this in 2011.  Be it the ‘humanisation’ of the online user experience (through things such as live chat, virtual environments, co-browsing, streaming of live events, virtual sales characters and improved personalisation), the increased demand for full sensory experience (highlighted through the expected growth of video) or the set up of community platforms and applications that bring people together around a particular topic or context– Digital media is finding its heart.

Global Innovation Survey Summary

Capgemini Global Innovation Survey 2010

 

Innovation is considered a top strategic priority, with a primary focus on identifying new business opportunities to take advantage of an economic upturn.

 

As the knowledge partner of the World Innovation Forum, Capgemini Consulting has recently completed its global innovation survey on the current state of innovation. The result is our second innovation leader versus laggard study. It covers five key areas that affect a company’s innovation success: the strategic outlook companies have with respect to innovation, their capabilities to manage the innovation process, the overall impact of technology, the innovation function, and how these factors influence companies’ spending plans.

The study offers a unique perspective by looking at the differences in behaviour of innovation leaders vis-à-vis laggards across these key areas. Finally, this report offers an overview of the most important implications for innovation executives – looking to improve the material impact of their innovation efforts on the business results.

 

In summary, this study reveals that given the strategic priority companies allocate to innovation and their corresponding spending plans, the maturity of their formal innovation governance structure lags behind considerably.  To overcome many of the innovation bottlenecks encountered, it is time to establish an innovation function that is able to deal with this kind of innovation governance and decision-making. Furthermore, there is an enormous unlocked potential for innovation in the involvement of external parties in the innovation process. Innovation leaders may have outpaced their peers by simply being better at involving external parties, leveraging a much broader innovation network and increasing innovation potential. Also, the study shows that more value, in terms of impact on business results, is to be expected from business model innovation, than from any other form of innovation. Targeting new business opportunities in emerging markets is much more likely to be successful when approached outside of the traditional competitive landscape. These and a wide range of other relevant findings for innovation and business executives are elaborated on in this report. The most important findings per area can be summarized as follows.

• Innovation in considered a top-three strategic priority in the recent global survey by more than seventy-six percent of the respondents at Capgemini Consulting. Moreover, making innovation a top priority pays off. This is evidenced by the correlation found between ranking innovation as the top priority and its positive impact on the business results, as illustrated by the leader versus laggard comparison.
• Most innovation efforts are put into customer-focused innovation whereas fewest resources are allocated to business model innovation. Innovation leaders put relatively more effort into business model innovation, whereas innovation laggards allocate more efforts to incremental product improvement. 
• As the global economy begins to rebound, identifying new business opportunities is the primary area of focus for 46 percent of respondents. In addition, innovation leaders are preparing themselves for hyper growth in a new business cycle whilst innovation laggards are focusing on increasing productivity of existing assets.

Key opportunity areas with respect to innovation management are the formalization of the innovation governance structure and the capability to engage external parties in the innovation process.

• Executive level commitment and the idea generation and enablement process are the overall best developed innovation management capabilities.  Most concerns exists around the innovation governance structure among respondents. 
• Most respondents – 53.5 percent – indicate they have developed relationships with third parties to support their innovation efforts on an ongoing basis.
• The large majority of 89 percent of survey respondents has made the step to somehow involve their customers in the innovation process.  
• Leaders have advanced to a high level of maturity when it comes to engaging third parties. They maintain ongoing dialogue with their customers or even integrate them into their innovation project teams. On the other hand, laggards are predominantly stuck at the ad-hoc engagement of third parties for innovation and have advanced less in terms of customer involvement.

 

 

Emerging technologies are expected to have a significant impact on companies’ value chains, however few companies feel highly capable of adapting rapidly to anticipated changes.

• Technological innovation is anticipated by the majority of respondents to have an incremental (42 percent) up to fundamental (38 percent) impact on their organizations’ value chains. 
• Fifty-six percent of respondents say their organization is somewhat capable of adapting rapidly to emerging technological innovations.
• Clearly, our innovation leader group is the best equipped for emerging technological innovations, scoring thirty percent higher in the category ‘highly capable and prepared’ than their lagging counterparts.

Establishing accountability for innovation through a corporate function or dedicated executive is part of the solution towards attaining innovation leadership.

• When looking at the innovation function within organizations the most frequently mentioned hurdles to innovation success are urgency of pressing day-to-day business demands (54 percent of respondents) and financial constraints (41 percent). 
• There seems to be a clear relationship between the appointment of an accountable innovation executive and the innovation success rate, with 59 percent of innovation leaders having such an accountable executive versus only 32 percent of the next best performers.
• The following types of innovation decisions are mentioned most as decisions to be made by the innovation executive or the corporate innovation function: determining the focus of innovation efforts – i.e. the innovation strategy (80 percent of respondents), and the allocation of funds and innovation portfolio management (67 percent).

Companies are increasing their spending on innovation across a wide variety of areas to improve their capabilities and competitiveness.

• The large majority of our survey respondents – 63.5 percent – anticipate an increase in their innovation spending over the next 12 months. 
• More than half of the respondents (56 percent) say they are planning to increase their innovation investments in rapidly developing economies. 
• When it comes to innovation investment areas our respondents are not intending to change the focus of their efforts: new product development (59 percent) and customer focused innovation (54 percent) come out on top. When making the split by success rate it appears that innovation leaders tend to invest more in customer focused and business model innovation, whereas laggards invest relatively more in incremental product improvement. 
• Nearly half of the respondents say they are likely to invest in M&A to improve their innovation capabilities, in particular to gain access to new markets.