Transforming the transformation industry

The traditional strategic consulting model used by businesses to tackle transformation is no longer fit for purpose. At a time when every business in every industry must continually evolve and transform to meet the changing needs of their customers, many consulting firms and their services have not. Ironically, the transformation industry itself is now being disrupted and a new model is rapidly emerging.

Most of our memories of 2020 are dominated by COVID-19 and lockdowns. However, hidden beneath those headlines lies a more complex picture, of which the pandemic was just one element in a whole turbulent mix of pressures driving increased change and uncertainty in all areas of our lives. It’s a big list of elements: climate emergency, social injustice, unemployment, inequality, political populism, polarisation, trade wars, housing affordability, and yawning wealth gaps. These all came together to create a perfect storm that washed across not just our personal lives, but also our businesses, governments, and economies.

It’s, therefore, no surprise that the businesses thriving in this volatile environment are turning change and uncertainty into their competitive advantage.

They are embracing and leaning into change, anticipating and adapting faster than their competitors. They have turned the traditional business operating model on its head, deliberately engineering agile, customer-centric cultures that respond instantly like a living organism, rather than waiting for traditional robotic top-down command and control signals.

Their processes are lean and their products and services are design-led, constantly evolving and revolving around ever-changing customer needs.

Anyone in a senior leadership role knows this is actually harder than it sounds. It often requires reimagining and rebuilding organisational culture, processes, and systems from the ground up. Furthermore, the challenge is amplified for larger organisations with multiple silos, deeply embedded cultures, complex processes, and well-established products and services.

The most common issues I see are:

1. When starting on the journey of changing to embrace change, the path quickly becomes long, complex, and expensive — exactly the opposite of the agility and speed we aspire to
2. Adding horsepower to transformation generally means engaging consulting firms, which traditionally results in a huge bill and a 200-plus page report that's too academic to apply to the real world, and already outdated by the time it’s finished.

It’s no wonder a recent BCG survey found only 30 per cent of digital transformation projects delivered their target value and created sustainable change. Despite this disturbing statistic, the 2020 Gartner CEO and Senior Business Executive Survey revealed that 59 per cent of businesses are undergoing a significant structural transformation at any one point in time.

The modern leadership paradox is to know that transformation is highly risky, and yet to also know we must do it anyway. So, how are the successful leaders mitigating the risk and increasing their chances of success?

Part of the problem is that much of the industry of transformation hasn’t actually transformed itself. It still largely operates on old-world values and operating models that put their own business's needs before their customers.

For example, many traditional consulting firms will elongate and draw out the early transformation phases (strategy, roadmap, and design) to maximise billing revenues. That’s great for them but doesn’t add customer value, chews up valuable resources, and, most harmfully, draws out the process so the whole thing is irrelevant by the time you’re finished.

Many firms may bring in frameworks and talent to help solve your problem, then take them away again as soon as the last six-minute billing block is invoiced out. This creates a customer dependency on them for the next job. This approach was designed for a bygone era when bloated corporations used to restructure once a decade, but it simply isn’t fit for purpose in a world where transformation is a constant, ongoing, evolutionary process.

Put simply, the traditional value exchange that underpins much of the transformation industry is broken.

Ironically, the consulting industry itself is being rapidly disrupted. The new and newly transformed operators in the market work on a different kind of consulting model.

Instead of creating customer dependency, they co-invest in their customers’ success. In the traditional model, consultants are more focused on billable hours than customer outcomes. In the new world, they make their money if, and when, their customers succeed. They operate side by side, in the trenches with their customers, because they believe this is what genuine customer partnerships look like.

Instead of doing the work for you and taking their intellectual property when they leave, their people and frameworks are designed to enable your teams and equip them for ongoing change. They don’t pretend to know your business or your industry better than you do — they understand their value is working with you in specialist change catalyst areas, such as digital customer experience, agile culture change, and lean process automation. They will teach you how to apply it to your business and industry so you can embed it fully and continue to adapt and transform long after their last invoice.

This may sound too good to be true, but it’s actually just agility, customer-centricity, and genuine value exchange in action — something us consultants talk about all the time.

James leads our strategic advisory teams across Datacom New Zealand. He is a specialist in digital strategy and organisational agility.