TeamFit is a skill management platform for professional services companies. We spend a lot of time speaking with the leadership of different companies to understand their strategies and the business pressures they are under. A surprising number of these companies have expressed a strategic intent to move into business and strategy consulting. I have heard this from accounting firms, consulting engineering firms and IT services companies in the past few weeks.
Of course this is nothing new. The big four accounting firms (Deloitte, PwC, KPMG, Accenture) all have strategy consulting arms that compete directly with McKinsey, Bain and BCG. Deloitte bought Monitor Group a couple of years ago and Accenture, which once upon a time sold its consulting business to IBM (this is the origin of IBM Global Business Services) has been rebuilding consulting for some time.
The same time the smell of money in infrastructure is luring the business consulting firms to compete for parts of large infrastructure projects. I have heard this recently from the CEOs of three mid-sized consulting engineering firms who are concerned that strategy consulting firms are trying to scoop up the strategy and planning phase of major infrastructure projects. There are signals from the thought leadership at the business consulting companies that they have a growing interest in infrastructure (here is an interesting report from the McKinsey Global Institute) so there may be some fire underneath this smoke. This is a concern for the consulting engineering firms as this tends to be a relatively profitable part of their work and it sets the context for successful design work.
This is not a one way street though. Even as the business consulting firms try to expand their footprint other organizations that provide advisory services are trying to compete with them. A senior lawyer that I work with has suggested that law firms are well positioned to give business strategy advice! (I am sceptical.) The managing partner at a mid-sized accounting firm has laid out her plans for offering forward looking business advice to her accounting clients.
Lawyers, accountants and IT companies becoming business consultants. Business consultants are becoming design agencies and stepping on the toes of the consulting engineers. Software companies, as they grow, expanding their own consulting and advisory offerings. The lines seem to be blurring. Why is this?
There are two things driving professional services companies into each other’s niches.
Skill commoditization is one. The skill lifecycle means that skills move through a natural lifecycle from trace to differentiating to core to commodity. Improved training and knowledge sharing plus smart tools are making it easier for people to acquire skills and global networks mean that contracts can be evaluated in The Philippines, tax returns processed in India and market research outsourced to Sri Lanka. Differentiation is increasingly hard to come by and sustain.
Artificial intelligence and robots are the other. It is not just other humans that are getting smarter. The rapid advance in artificial intelligence and deep learning technologies has many people running scared. In the not too distant future tax returns will be processed by software (already most of us use applications like Turbotax for our personal tax returns, software will be written by software (accelerating the expansion of software into all areas of the economy), patent claims will be generated and validated by software, websites will be designed by algorithms and on and on. If you are running a professional services firm this is frightening and exciting. Frightening as this future is close but in most cases it is not here. People and their skills remain critical to success so building an effective talent network remains critical to having a resilient and scalable business. Here is a good summary of some the industries where automation is processing fastest.
These two forces are driving well established professional services companies into each others space. The boundaries between the professions are blurring. This is generally a good thing. Innovation is most common at the edges of business ecosystems, where different skills, business models and customer solutions rub up against each other. It will be interesting to see what new concepts a McKinsey or a BCG brings to planning for an infrastructure project. Or how the consulting engineering companies will respond to the new competition by upping their own games.
We predict a number of responses. All of these can already be seen in one sector or another
Each of these strategic responses will require new skills. Some of these are already hidden away in the organization and just need to be uncovered and applied. Others can be developed based on the foundational skills (skills used to develop other skills) that people have. In some cases new hires will be needed or consultants engaged (leveraging the extended talent network). If I were to pick two skill sets that will be critical for all of these different companies I would focus on two areas.
Integrative skills – the skills needed to bring together different skill sets.
Partnering skills – the skills needed to build and manage partnerships, creating value for both sides.
TeamFit is the most powerful tool available for understanding the skills of your people, how they are connected to actual work, and how to leverage them to optimize potential.
At the top is an image of lateral gene transfer, one way genetic information is transferred between species.
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