The Death of Strategy and Management Consulting

While I think it is is truly great what the top five strategy consulting firms have brought to many industries in terms of structured analysis of the world that guide companies through a complex world, I have to say that I think there is no need for them anymore. When looking at how tech companies are organized, but also how SMEs become more and more important in the market, I had some thoughts:

Strategy consulting companies work best where they can achieve a better understanding through an outside view. As Conway’s law puts it: “Organizations which design systems […] are constrained to produce designs which are copies of the communication structures of these organizations.” This applies for respective IT, organizational but also strategy choices. However,

  • People are now trained during education to have frequent or infrequent this outside view themselves (strategy courses, critical thinking courses, reflection competence courses) -> there is no need for the specific knowledge anymore
  • Companies that are so large, that the company complexity requires such an outside view are becoming less and less, SMEs are much more dynamic and take over market share -> there will be fewer potential customers
  • Many large MNCs build up their own internal auditor and consulting teams -> there is more in-house capability, thus less demand for outside counsel

So what to do:

  • Specialize in niche topics: Create “T” teams that have know how down to the detail and gain traction in SME markets (with more reasonable priced offerings and being more approachable)
  • Integrate vertically, not horizontally: Become tech-companies yourselves so that you can implement the ideas you create
  • Become a partner to your clients, not a supplier
  • Make as much off-boarding as possible to your clients so that these people later order your services

Nevertheless, I believe that the era of strategy and management consulting is over and will not return.

 

 

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