Jul 15, 2021 at 6: 11 pm

Digital Disruption Comes of Age for the Consulting Industry

Digital Disruption for Consulting has arrived today - The focus on people, and how we can all collaborate, will deliver long term profitable success.

Scott Newton


The consulting and advisory industries have remained relatively unchanged for centuries. Leaders or board perceive a problem and call for the best trusted advisors who promptly arrive and provide them with an answer and roadmap to resolve the issue. Relationships and reputation, built over decades, determine who receives the most prestigious assignments and largest fee structures.

I think of the consulting industry mindset today as similar to the IBM advertising campaigns of the 1970s when the company famously ran advertisements titled “Nobody ever got fired for buying IBM.” The message was simple in that it effectively conveyed that managers and boards should not take risks with computing when the “best” solution was already known to everyone. This type of communication, while propping up the sales of IBM for years, is an example of the complacency that ultimately disrupted the firm and is disrupting consulting and advisory globally today.

Digital disruption in consulting is accelerating due to three key points:

1. The customer now understands their pain points better than many suppliers

Customers are better informed than ever before on what their challenges are, and how a consulting organization can help to solve the biggest issues. Many of the people leading successful businesses today have a background in consultancy and advisory and are aware of the most effective ways they can use professional services. As the customer has become more aware of their problems, they are discovering that a large number of consultancies are no longer meeting their requirements, and are turning to new solutions.

2. The shift towards ecosystems and platforms has created new business models

The previous business model of professional services relied on a “mark up” of costs for professionals, and a talent pool largely driven from top universities willing to work long hours for the potential road to partnership. Talent exchanged certainty of highly competitive salaries and quality training and leadership programmes for the opportunity to become an equity partner one day in the firm. Customers accepted higher mark ups as a guarantee for quality, and assurance that their decisions would be validated by well-respected outside parties. Today, technology has enabled the disintermediation of the full service consultancy and allowed a large number of highly-talented individuals and niche-focused teams to create new ways of working, new routes to the customer, and the ability to provide highly competitive services with compensation and flexibility models that are a far better match for the best professionals in the business.

3. The speed and timeframe of business have changed

The calendar where the preparation of a Strategy and Budget commenced in June/ July and was approved by the board in November/December had worked for decades. Organizations had the time for wide-scale consulting “interventions” where large teams would descend on the firm and draft PowerPoint “decks” of 150 pages loaded with the latest “best practices.” Today, even the largest multinationals need to work quickly, with focused small teams, and the ability to recognize and capture value with new opportunities that did not exist even three months ago. Organizations are looking far outside their industries and verticals and rewarding curiosity and risk taking to drive their value creation.

We can consider consulting today as similar to where Tesla was in 2008. Car makers were thinking with one mindset and Tesla proposed a completely different arena. Consulting today has many organizations proposing similar solutions, and yet the buyer is actively seeking a new and different answer. Great opportunity.

Will you become the Tesla of Consulting?

Technology is now being touted by the largest industry players as the solution that will ensure their businesses stay profitable and relevant. There are five key considerations which point to the industry facing a more disruptive shift, and one in which we will see new ways to serve the market and new companies becoming the first choice:

1. AI is not a “silver bullet” and will not work miracles by itself

2. The technology almost always works – it is the people part that is a challenge and that is not yet answered

3. Poorly defined problem statements make for insufficient solutions – the questions being asked are still missing the actual challenges that must be solved to increase Total Shareholder Return (TSR)

4. Business Model Fit: What is the business model (how will we make money) and how well does it align with the capabilities and the nature/direction of the firm?

5. Network effects: How likely is a network/ecosystem effect to be activated for creating larger value? What is the magnitude of this impact?

The biggest error is focusing on the technology and not the people.

Secondly – still today there are many solutions looking for a problem.

Lastly – there is so much opportunity! The focus on people, and how we can all collaborate, will deliver long term profitable success.

Boards and Management know that they must develop their own internal capabilities to be successful in the long term. Shareholders are highly aware that the companies they invest in are spending billions with poor results and negative outcomes. PR scandals involving advisory and consultancies are hitting front pages of newspapers and court documents around the world.

Digital Disruption for Consulting has arrived today.


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Scott Newton

Scott Newton

Scott Newton works with boards, CEOs, private equity, family office, senior leaders and company owners in Fortune 1000 businesses with a particular emphasis on Middle Market mid-sized companies with annual sales of 100million-3 billion USD to impact sustainable growth and profitability opportunities.


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