Can consultants solve clients’ biggest problem?
Among all the challenges client organisations face in the current environment, one stands out: the need to ensure better cross-organisational collaboration. Consulting firms may have the solution, but they’re not selling it.
Our latest quarterly client survey,¹ suggests that rising costs is again topping clients’ list of concerns, with a quarter of respondents saying that inflation is depressing their business confidence.
The clients we interview say it’s becoming increasingly difficult to pass increased costs onto their customers in the form of higher prices. At the same time, they recognise they need to invest in their businesses, especially their technology: Two thirds of clients say that they need to update their organisation’s technology as soon as possible in order to survive and 21% that their ambitions as a business outstrip their technology capabilities.² Not surprisingly, this is translating into significant spend on technology-related consulting services: Thirty-one percent of clients say that they’re most likely to bring consultants in to help with technology implementation, and 29% with adopting emerging technologies.
But both clients and consultants may be missing something here—and it may be the reason why this proportion of clients who say that they’re most likely to buy external support around technology implementation has in fact fallen from 36% in 2023, and, more dramatically, the proportion who say that technology strategy is top of the list has dropped by 17 percentage points, from 43% last year.
Clients, for all the sound and fury around technology, have a bigger problem: People. Organisations don’t have enough of the right kind of people—despite a more difficult labour market, 62% of clients say that many people have resigned in the last 12 months, and at a time when workloads have increased, according to 77%. Sixty-three percent of clients describe themselves as very short-staffed and 61% don’t think they have the depth of experience they need; 67% report being exhausted and stressed as a result.
But the biggest challenge clients face is around internal collaboration, with 81% of executives saying that this is fundamental to their ability to achieve their corporate objectives. And this chimes with what we hear from clients in interviews: “Getting stuff done”, whether that’s launching a new product, managing risk, or becoming more sustainable, cannot be achieved a single department acting alone.
Research we carried out in 2022 sheds some light on why internal collaboration is so crucial for clients. Towards the end of the pandemic, when there was an extraordinary level of pent-up demand for transformative change, three quarters of clients said that organisational agility was playing a very important role in large-scale projects. Behind this was a desire for speed: Forty-seven percent of the most successful organisations said that agility was important because it helped them get things done more quickly.
This had an impact on how clients wanted consultants to work: Eighty-two percent of clients said that it was very important for consultants to adopt a multidisciplinary approach. Forty percent said that “multidisciplinary” means ensuring that the different functional areas of a client’s organisation collaborate effectively together and a further 26% said it’s a mix of this and of a firm’s ability to bring different skills and perspectives to bear on project work. Asked why it was critical that consulting firms worked in this way, the most important reason among successful organisations, cited by 65% of clients, was that they needed consulting firms to help them, the client, take a more joined-up approach themselves.
The good news here is that 98% of clients think that consulting firms excel at working in a multidisciplinary way. But the bad news is that just 4% of clients say that they’re most likely to use external support for people and organisational-related issues. Given that the internal barriers to getting things done are so very significant for clients and consulting firms are perceived to be so very good at helping to overcome them, why are clients buying so much technology support and so little people-related support?
Our hypothesis is that the “how” of consulting—and, indeed, all professional services—gets buried in the “what”. Clients can buy a “what” (such as technology implementation) but it’s much harder for them to buy a “how” (like a multidisciplinary approach). How would you even begin to scope it, let alone cost it? Clients therefore don’t ask consultants to improve their cross-functional working, any more than they ask consultants to make them more innovative, for example. And because the “how” can’t be bought, consulting firms don’t sell it; because it doesn’t have a price, neither clients nor consultants value it.
The result of this is a huge amount of untapped value in the consulting market. To resolve clients’ issues around internal collaboration, consulting firms first need to demonstrate the utility of multidisciplinary working and the value it actually creates for clients—and then put a price on it.
If you would like to discuss any of the data that we reference in this article, or to delve deeper into our analysis of what clients want from firms in each sector, please get in touch.