We are living in a time when these management consultancy firms preach towards their customers: “Change, radically, because if you don´t, there is going to be trouble on the horizon. Digital power is strong and you desperately need to care. Yesterdays winners can be the losers of tomorrow”. And gosh, they are so right. But are they capable of swallowing their own medicine?
Management Consulting is a business that was not that big 30 years ago. Then it grew, heavily related to Globalization and the Berlin Wall breaking down, a massive period of mergers following out of that, and the industry in need of mainstreaming business. During that period companies like Accenture, McKinsey, BCG, and others also grew. Customers, mostly big Industry, at that time, needed them. They were good at helping Industry leaders out on this. Not the least they where really good in increasing productivity.
That actually means, if you go even further back in history of for instance Accenture; they went from being a tech-company, which they actually where in the really old days, to become a ”body-shopper” of fairly well-educated MBA-people so to speak.
This was the time when Management Consulting ”became”.
Before the 1990s…management Consulting was a rather small, and local, business. Mostly, it was occupied by older, experienced, former managers. Then, when this Industry grew, suddenly young people, not with the same kind of experience, in many cases not with even any practical business-experience at al, could enter this industry. What they brought to the table was instead a university degree, preferably something like an MBA, with high grades, high energy level and drive, and a desire to work hard for their managers, and customers, and not the least; earn pretty well.
Trust me, I know. I have spent decades on “producing” these kind of people. And I claim heavily, they are interesting, heavily interesting people, not the least when it comes to their desire to get “to the top” so to speak.
But life change, like always, and during the last decade a couple of things have become clear:
1. Body-shopping of well-educated people is gradually becoming a commodity. In some sense it is even becoming software (try Similarsites for instance, a competitor-list for you, just on the fly, and it is free at this moment). It is tricky to charge customers heavily for just having read Michael Porter, or on the capability of picking numbers from a database and crunch it a bit in Microsoft Excel, so to speak. Everyone, today, can easily read Porter…if that, for a strange reason, was what is needed.
(Actually; Porter is not what Industry need nowadays, see my latest book it you want to dig deeper into that, in particular chapter 4. What land? Whose land? Your land?).
2. Digital tech has become a far more important driver for change, than ”classical business-theories”. Leading to tech-knowledge becoming far more important than having an MBA nowadays (with tech-knowledge you can figure out what you actually can do, and how to do it, but with an MBA you can only figure out what might be nice to do, to overstate the differences a bit). And we constantly already see this: what kind of degree did for instance the founders of Google have? Tech is today´s answer.
3. Globalization is not what it was ten years ago. Today, it is even more likely to expect the opposite for the future (Globalization has never been a linear process, check out the old book “Future Perfect” for instance and you can see it for yourself). Well, of course, Covid have supported all that. ”Let´s produce locally instead in the future because our global Supply Chains have shown themselves to be rather unstable”. But it was a growing thing even before Covid. Trump throwing Tik Tok out from US is just one signal of it. Putin did try to stop Microsoft in Russia several years ago. And China have been building it´s own luxury brands for several years now. We are building up new boarders, again, so to speak. And we are very likely to continue doing that the upcoming decade.
And, of course; all that leads to, less need of the kind of consulting competence that ones grew after the Berlin Wall broke down 1989.
I have expected for long that all this would force management consultancy firms to change in a fundamental way (there is absolutely no reason to expect their top-managers not understanding all this, they are talented people you know, and I do really hope they already have understood; If not, I have been a lousy teacher for them when they where young). And we have already seen lot of signs of it:
1. These firms have started to buy tech-firms, something they never considered like 30 years ago (Accenture buying Symantech is just one recent example).
2. These firms starting to position themselves towards young well-educated people in a different way than before (look at this Hackathon for instance). Less business-suits-people, more of ”dirty tech-people” so to speak.
All this leads to the following conclusion: these firms are trying to become ”tech-firms” for the future, instead of being ”MBA-Power Point-suppliers”.
And Accenture nowadays showing on their own website how many ”patents” they have, is a clear sing of that. Look here and you can see for yourself.
I do not recall them showing that some years ago. Though they might, I really do not follow them on a daily basis.
So could you help me out here…when did Accenture start doing that? This year, last year, or even several years ago?
And; do you think they will manage this kind of radical change? It is not that uncommon for incumbents to break down when disruption is on the horizon you know. We have seen it happen before. EMI, Blockbuster, Kodak and so forth.
Who could be next?