Types of Consulting Firms: Forked Roads and Parallel Paths [Part 2 of 3]

August 28, 2019 Emily Slayton

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« Previously: Independent Consultants vs. Big Firms

In the first part of our latest series on independent consulting, we looked at the differences between independent consultants and the consultants that are employed by big firms. The people themselves are a big part of the story, but they tend to share the same roots. Look at problem-solving approaches, however, and you’ll see how different types of consulting firms start to diverge from the other.

This isn’t to say the frameworks applied or their underlying principles vary all that much. “Most of the core methodologies of management consulting are very, very similar,” Sandra Pinnavaia, EVP and Chief Knowledge Officer at Business Talent Group (BTG), said. “They’re called different things, and they have different kinds of consulting associated with them, but they’re not that wildly different.”

Types of Consulting Firms: Push or Pull

The primary difference is that big consulting firms are, well, big. You get a big name, a big team, and resources that span the globe. But big-firm consulting teams tend to be composed of generalists who use standardized frameworks to analyze problems and present solutions.

“All the big consulting firms are out selling solutions and yes, they modify them, absolutely they do,” Pinnavaia said. “But they’re pushing solutions onto clients.”

Independent consultants, on the other hand, are often alumni of the big firms. They can work alone or in teams that deliver more specialized expertise than big firms typically offer. But the most important distinction is that these consultants are highly collaborative in tailoring their approach. So, too, are marketplaces like Business Talent Group, which are designed to vet and curate independent consultants—and make the market easier for big companies to tap.

“We embrace the problem and we staff the right people to help solve that problem. And we do it bespoke every single time,” Pinnavaia said. “We structure the engagement in a way that is as closely aligned to what the client thinks they need as possible—as opposed to coming in and saying, ‘This is how it’s gonna run.’”

Implementation Meets Collaboration

That’s the other thing with big firms: Once the strategy work is complete, it’s largely (if not entirely) on the business to execute the plan. They might leave a consultant or two behind to advise on execution, but those people are unlikely to be partner-level advisors.

At the same time, implementation work often involves significant scale. But while global firms like Deloitte and Accenture might have the advantage when it comes to a project that requires input from 40 or 50 people worldwide, there’s still the opportunity for talent platforms like BTG to build out squads of independent consultants to drive bigger implementations.

And this is exactly what BTG is doing with its PM FlexHub model: instead of delivering one or two people, BTG delivers a whole team of consultants and adds or removes people as needed. In doing so, independents are able to come together to do bigger pieces of implementation work.

Here’s how PM FlexHub works:

  • Scope: BTG identifies, vets, and presents the best-fit project managers for stakeholder interviews
  • Deploy: We manage the onboarding of all talent, from contracting to culture
  • Oversee: We build a centralized project governance hub that’s customized to the client’s needs, delivering status reports, insights, and improvement opportunities

“We wrap around the team, and it’s very effective,” Pinnavaia said. “What clients love about it is, since the talent is not our full-time, permanent employee, we can adjust the staffing with much more fine-tuning than a traditional firm can. A big firm would put 45 people on it, and they’re running against that the whole time. We can say, this week we need six; next week we need nine.”

Technology as an Engine

Over the past decade, the democratization of information has dramatically shifted the way big firms and independents approach their own businesses. Writing in Harvard Business Review, HBS Professor and disruptive innovation expert Clay Christensen cites the 2002 recession as having been particularly influential in the emergence of “disaggregate consulting,” with cost pressures spurring the modularization of services:

“The shift is generally triggered when customers realize that they are paying too much for features they don’t value and that they want greater speed, responsiveness, and control,” writes Christensen. “As access to knowledge is democratized, opacity fades and clients no longer have to pay the fees of big consulting firms.”

Of course, technology itself is a big driver. Businesses once relied solely on consultants for data collection and analysis in order to understand where opportunities lie. Now, databases, market research tools, and advanced analytics make it possible for businesses to gather that information independently.

In addition to giving rise to different types of consulting firms such as BTG, this trend toward asset-based consulting is also being addressed by traditional firms. Many are productizing their services, packaging them into smaller, more discrete bundles. McKinsey Solutions is one such example, offering seven sub-brands and 85 distinct solutions.

The Future: A Shared Challenge

But so far, this is less a revolution than it is an evolution. The current productization of services has enhanced the market rather than upending it. These “solutions” can be used repeatedly across a range of clients, but the resulting recommendations still require tailored implementation—which is often where experienced independent consultants come in. As BTG consultant Thomas Collet writes, “Sometimes, knowing what not to do is as important as knowing how to do it. Without a sense of focus that is informed by experience, it is easy to get lost in the [weeds].”

Right now, companies are still struggling to get comfortable with the data science revolution. The concern is that by the time they do, artificial intelligence will already be here. Pinnavaia believes the “AI revolution” is still a ways off, but acknowledges that reskilling looms large as a growing challenge for independents and traditional firms alike.

“There is a generational shift that’s coming, and maybe it’s even two generations,” Pinnavaia said. “The first generation is advanced analytics. The second starts to become the AI stuff, the sort of black box, whiz-bang stuff. I think that will be a challenge for consultants who have to reskill.”

One thing is sure: the future of technology won’t eliminate the need for management consulting, whether from traditional or alternative models. If anything, it will make it more essential as businesses themselves grapple with technological advancement.

“I think there is a huge amount of exciting promise in these technologies,” Pinnavaia said. “I think it’s a little like liberal arts, where everybody’s going to have more STEM, but you still want them to be really good thinkers. So, I am optimistic that we will have core consulting always, but the toolkit is going to be a challenging generation or two to migrate through.”

Next: Different Types of Consulting Services »


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About the Author

Emily Slayton

Emily is an award-winning writer who specializes in B2B marketing. She has been helping global brands reach targeted audiences to drive sales and awareness for more than 15 years. As a small business owner herself (skeletonkeybrewery.com), she understands what it's like to source a team that can scale with sudden growth.

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