There is a place in business for both global consultancies and independent consultants - but when is it appropriate to use one rather than the other? Management consultant, Jorge Zazueta, draws on his experience to discuss the important roles both have to play.
When you are planning to relocate your manufacturing operations in 23 countries across the globe to a few selected sites, deeply vetted through concurrent primary research in seven languages, a good bet is to partner with a large consultancy equipped with the global expertise and resources to undertake such a task.
Defining the relationship with global consultancies ought to be an explicit part of your operating model. In our hypercompetitive environment, you will be confronted with deep, global scale business transformation projects that call for that specific relationship.
The Role of Global Consultancies
Global consultancies handle complex large-scale projects through a highly structured program management approach, where a partner sets the strategic direction for a group of projects—or work streams—each led by an experienced consultant (director or manager) supported by a team of analysts or junior consultants. All of the parts coordinated by a fully staffed Program Management Office whose role is to ensure contract compliance and drive program cadence.
As most engagements undertaken by global consultancies tend to be large, this structure becomes standard. However, as scale goes down, the very structure that enables large program success, becomes a burden that can slow down and even damage the effectiveness of a smaller, more focused initiative.
Not long ago, I was involved in one of those large global programs. My work stream was tasked with developing a business case for the overall transformation and we inherited the typical structure. Our team included a part-time partner, myself as a lead and a junior consultant. Our progress tightly managed by the PMO. To be fair, the business case turned out pretty good and the client was quite pleased with our work. Nonetheless—at least in my view—the team structure was just too heavy for the task.
The strategic direction was clear enough to obviate the partner’s direction, and the support provided by our junior consultant was more of a luxury than a requirement. In short, a single person project would have been not only as effective, but more efficient, with a finer focus on the project and a more intimate and natural communication with the client, eliminating the formalities imposed by a larger structure. It was a job for an independent consultant.
Why Independents Are Critical to your Operating Model
As organizations grow leaner, the need for specialized external resources becomes more apparent than ever. That doesn’t mean, however, that you need to spend a million quid every time you need help or an external insight.
Independent consultants are lean by design and can deliver better value for your money when paired to the right projects. Working with an independent has many advantages beyond availability and makes better strategic sense than a large consultancy in a number of situations.
There is no better person to produce an impartial assessment than an independent party. Back to our business case story, a large firm who can, in principle, benefit from the implementation of the project being analyzed has a spurious incentive to find the investment feasible, while an independent consultant, ineligible to lead the big project coming ahead, is uniquely motivated to get things right. To make the best recommendation so she is called back next time.
Flexibility and customization are more amenable to an independent as she is not selling a methodology, but her ability to deliver on many. Changing reporting standards or re-defining a whole deliverable is seamless for a sole practitioner and complicated for a large firm.
An apparent limitation of working with individual experts is their breadth of knowledge. After all, expertise is naturally narrow. But from an operating model perspective, you are not limited to an individual. The relationship expands to a network that, as a whole, encompasses a broader range of expertise than any one firm in the world.
You Can Have It Both Ways
Relationships with consultants are not mutually exclusive, but complementary. By explicitly considering these relationships in your operating model design, you are building a more effective and efficient professional services supply chain that leverages scale when necessary, while maintaining itself nimble to respond to the challenges of an increasingly complex and hypercompetitive world.
About the Author
Jorge has 20+ years of combined industry and consulting experience working on a broad gamut of areas from finance and capital planning to procurement and operations in more than ten countries, developing a pragmatic perspective that allows him to craft innovative strategies that recognize the complexity of real world operations. During his professional life, Jorge has helped his clients achieve cumulative savings of hundreds of millions of dollars though efficiency improvements and optimized operating models.More Content by Jorge Zazueta