Strategic consulting is when it hurts.

Management consulting has increasingly mutated into digital consulting. It makes sense: digitalization is THE topic in corporate strategy and development. As a result of this change, one effect is more prominent than ever before: I call it “show consulting”.

(Reading time: 5 minutes)

Strategic consulting

Today, everything has become wonderfully strategic. Especially in consulting. Driven in no small part by the higher fee rates, I often hear “Yes, you know, I only do strategy”. Concrete implementation consulting has almost fallen into disrepute. Yet this is what usually brings companies much more.

Because I often observe that entrepreneurs and people from senior management usually have the right strategic steps in mind. Surprisingly, they often know exactly what needs to be done. Maybe they don’t have the digital slang down pat, ok.

What is missing is a direct link to implementation. How exactly do I go about it? What are the first steps? What is the right sequence of measures? Which investments make sense and which don’t? This is where the field starts to get tricky for consultants. Because in the end, the concrete results determine success or failure.

A strategy that has not yet been implemented is, so to speak, always potentially successful and a failure at the same time. It is a kind of “Schrödinger’s cat” of management consulting.

This floating, bipolar moment in the development of a new corporate direction is the perfect moment for management consultants to close the mandate. Everything that comes afterwards systematically increases the business risk.

Perplexed after strategy process

Not a fortnight goes by without someone from a large company asking me for advice on how to get started with the strategy developed by [insert any well-known major consultancy agency here].

The strategy papers that I get to read are usually so elaborate and complicated that I think they’re real brake pads. And peppered with digital bullshit bingo of the best kind. I don’t know how many times I’ve had to read that company XY wants to become the [insert some well-known digital super-disruptor here] of the [insert some completely dusty industry here]. I can’t listen to it anymore.

In essence, the recommendations and resulting strategies are usually so adapted and bland that they read like the perfect guide to creeping suicide.

Sometimes it hurts

You will already have guessed that the title of this article is exaggerated and the circumstances described are perhaps a little polemical. Of course, there are also management consultancies that work differently.

But I do indeed think that honest, serious strategic advice actually hurts a little. This is because managers usually go into such processes with expectations about their own (company’s) future. And you often have to dispel their illusions first. Make it clear that, from an external perspective, the company is not at all well positioned for the digital challenges. That steps backwards and clean-up work are necessary first. That the skeletons in the closet need to be disposed of or reanimated at great expense. The unpopular stuff.

That is tricky for the consultants. I have often seen consultants lose their mandate after such clear words and analyses. As a small consulting agency, you can usually afford that. But if I’m employed by a large consultancy and have to meet budgets, I think twice about it.

In my experience, such consulting firms don’t even think twice about this and simply go through with an adapted, pleasing recommendation for strategy and measures. This makes everyone happy: the client, who feels vindicated, the managers in the consulting firm, who were able to increase sales, and the consultants themselves, who have climbed another rung on the extremely long career ladder.

Moment of truth

I didn’t watch that much television as a child. But one program I was always allowed to watch was called “1, 2 or 3”. There’s this phrase in the quiz:

“You’ll see if you’re really in the right place when the light comes on.”

That has stayed with me. A light always comes on at some point.

And it’s the same with strategic decisions. No matter how much research you do, you can still make better decisions. It is intuitively assumed that more research also means more certainty. But this is not the case: The amount of additional research is usually degressive in relation to the certainty of the decision.

This has to do with the nature of strategic decisions: The more customized they become, the less promising they usually become. Brilliant strategies always have to do with taking risks. Especially in the digital sector.

And you can see whether a strategy is really successful when the market light comes on. Then the cards are on the table.

Horse and cart

Strategy and implementation go together like a horse and cart. Many entrepreneurs and managers are strong in one or the other. It is extremely rare for the two to coincide and for a person to be very strong in both areas.

I think I myself am above average in the analytical, strategic part, for example. It took me several years to realize that I am below average in the implementation part (my investors will surely love this statement…). But by recognizing (and admitting) this fact, I was able to change my focus. Invest much more time in implementation, work on deficits and behave differently. For example, hiring people who are very good at implementation and learning from them.

My experience is that entrepreneurs in top management, as already mentioned, are usually stronger in strategy than in implementation. And they actually need an honest assessment of their strategic plans on the one hand and, above all, help with concrete implementation on the other.

Huge market opportunity for management consultancies

Traditional management consultancies therefore need to move. In my article on the “new doers in consulting“, I have already explained that I think consulting firms should get more into “doing”.

And there are also various medium-sized consulting companies that have recognized the signs of the times and are involved in the entire process with the customer.

Another development is that large management consultancies are venturing more into implementation in the digital sector. Various players have bought digital agencies in order to benefit from the mostly high-volume implementation projects.

Take out risk

I think the desire of everyone involved to reduce risk is legitimate. In my opinion, the best way to do this is to “challenge” new strategies using “design thinking”, even if only partially. In my opinion at least, this is also the more exciting consulting work.

The disadvantage for management consultancies is that design thinking-based projects can be quickly abandoned. For example, if an initial MVP is unsuccessful. But that is precisely the point. In order to cushion this effect, it would only be fair that slightly higher fees are charged to clients.

Cultural change in consulting – but also for customers

In my opinion, a relatively large amount of rethinking is still needed to bring strategy and implementation closer together. In the long term, the majority of this rethinking will be forced by economic pressure. As a company, you first have to be able to afford the 7-digit strategy process with purely conceptual results. From a commercial perspective, but increasingly also from a time perspective. Because speed is becoming more important. Also or above all in consulting.

Market upheaval

I therefore believe that we will see considerable upheaval in the consulting industry over the next 8 to 15 years. It’s not really obvious yet. Especially if you look at the turnover of consulting firms. Business is booming.

However, we should not be fooled by this. The underlying drivers of rapid change, greater speed, increasing cost efficiency and agility require new strategies in response. It is to be hoped that the large management consultancies will soon start to launch their first “consulting MVPs”. Otherwise, new, technology-driven players will have an easy time of it.

They are in the starting blocks. At the moment, the good personal relationships between customers and advisors and the existing trust are preventing an easy market entry. Sooner or later, however, “bang for the buck” will decide. And there is not that much “bang” even in the 400-page strategy paper.