consulting startup

The Importance of a Disruptive Consulting Startup

The consulting business is one with a tried-and-true tenet: the consultant is, typically, the smartest person in the room. 

Companies rely on consultants to come in and take charge of problems that they have been unable to solve, and to provide solutions quickly and efficiently. Businesses large and small have, for the most part, learned what to expect from big consulting firms. 

Though there may seem to be little room for disruption in this industry, wherein the status quo seems to be working for both the consultant and their client, the degree of discourse in the relationships between consultants and clients tells a different story. After all, when the going joke is “a consultant is someone who borrows your watch and charges you to tell you the time,” that’s not a sign that things are going well in our industry.

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Breaking with tradition

Traditionally, consulting firms have operated with the same philosophy for decades: When dealing with clients, consultants are the ultimate authority. They tell companies what to do and expect those companies to implement the plans they draw up for them; internally, the industry is built on creating step-by-step playbooks that can be handed down to junior consultants to implement with minimal room for error, and can be repeated over again with the next client, or even better, the same client next time they go through the same issue. But while this approach is the most efficient for the consulting industry, and has proven profitable for decades, more savvy clients are recognizing that it may not be the best approach for the client. 

After over a decade as a senior leader in traditional Big Consulting, it became clear that the industry was ripe for disruption. Structural disruption needed to occur on both the above fronts: how consulting firms interact with clients (externally), and how they build their business model (internally). To identify the right disruption levels, I interviewed users of consulting services at all seniorities about what they hope to get from their consultants, what they end up getting and what they believe worked versus what didn’t. 

The consensus was that, while the need for consultants is strong, and the value they bring through best practices, the latest global thinking and cutting-edge methodologies is highly valuable, the “smartest person in the room” approach may not be the best solution. Teams are not responding well to it, which affects their willingness to cooperate with consultants. Even more seriously, it hinders them from enthusiastically implementing recommendations provided by people whose success they are not rooting for.

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Empowering ALL the smart people 

To disrupt the status quo, the concept of the “smartest in the room” has to be upended. Other than aggravating client teams, this mentality creates an atmosphere of codependency, where the client begins to rely heavily upon the consultant, which only benefits the consulting firm. After all, what happens when the smartest person in the room leaves?

Furthermore, it massively demotivates the client’s teams; why bother if nothing they say holds the same value as what the consultants say? Even more damaging, it disincentivizes consultants from helping client teams thrive and grow. If your value is in being the smartest person in the room, then you will never authentically share your best ideas with the teams ahead of meetings, or help them improve their own ideas, because that erodes your “value.” 

What if senior clients started evaluating consultants by how much their own teams grow and develop after an engagement? What if consultants shift their focus to developing the “other” smart people in the room? No matter how brilliant a consultant may be, they will never beat the combined intelligence and experience of a company’s own brightest minds. Consultants who help companies discover how to solve their own problems through creative and collaborative solutions enable and support their clients. This supportive perspective is an excellent way to lay a foundation for lasting change, rather than a codependent relationship between the client and consultant. 

In addition to disrupting how we approach consulting externally with clients, it is also essential to disrupt the industry internally. To really transform our industry, we as consultants should let go of the model of measuring success through off-the-shelf playbooks and repeat business. It is, of course, much easier to repeatedly do the same work over and over — which allows us to delegate to more junior teams and cut costs — but is that really best for our clients? 

I only consider an engagement a success if my clients never need to hire me again to do the same type of work, because their teams have learned how to do it themselves. It tells me that I developed them, and gave them the tools and empowerment they need to solve their own issues. That is how success should be defined, and this is where I believe disruption is paramount. 

The challenges of launching a consulting startup

Starting a consulting business is, arguably, far too easy. Launching one that succeeds beyond a year or two is a different ball game. 

One of the biggest challenges in the consulting industry is the lack of licensing or a foolproof set of credentials required to hang out one’s shingle. We exist in an industry where anyone can call themselves a consultant. Their skill and value — or lack thereof — are only uncovered through trial and error. There is no source of truth that tells potential clients who is legit, and who is not; thus, most clients who can afford it opt to take the less-risky route and hire Big Consulting firms. The elevated risk that comes with hiring an unknown or lesser-known firm has been a significant disservice to the industry, and a hurdle new consultants should consider early on. 

To successfully compete in this industry, one must first decide if they will compete on quality or price — the former being the road less traveled. Most consulting startups launch with the message, “If you can’t afford the big firms, you can hire me.” There is nothing wrong with that approach, especially since the number of clients who cannot afford Big Consulting is much larger than the number of those who can, but that needs to be a conscious choice and a strategic direction. It’s increasingly difficult to change your pool of clients, and even more difficult to raise prices. Taking this approach, however, you risk getting lost in a sea of competitors offering consulting services as a commodity and fighting to offer a lower price than the next team. 

An alternative strategy is to enter the industry with a unique value proposition, one that encourages clients at all scales — even those who can afford Big Consulting — to choose you. This can be a disruptive approach, a niche service that larger firms don’t offer, or deep expertise in a narrow field that is in high demand. That approach allows you to carve a part of the Big Consulting pie, and at rates comparable to theirs. 

Just like most other sectors, finding a unique value proposition that clients respond to is easier said than done. If it wasn’t challenging, all of us would have businesses as large and as successful as Amazon.  

With that said, whether we like it or not, in addition to a disruptive idea or a unique value proposition, the market still seeks “proof of skills.” They will look not only for any background experience you have in Big Consulting, but also proof that you succeeded in reaching senior leadership levels in Big Consulting before you were allowed to play in the major leagues. Until someone creates a disruptive business that accredits or evaluates consulting firms objectively, getting that brand name training and endorsement will — more often than not — be essential, especially if you’re not willing to compete on price.

A little bit of luck and a lot of great word-of-mouth

When setting out on your own in the consulting industry, building the infrastructure and scale required to service large clients can take time, and can be financially prohibitive to do before you get your first large client; hence, you’re stuck in a “chicken-or-egg” dilemma. This is true even for those who have had extensive experience working with large firms before building their own companies. 

As almost every successful startup or individual will tell you — if they are being honest with you — you have to do your part, but then the stars have to align and you have to get a little bit of pixie-dust luck for true success to kick in. Sometimes, it’s just as simple as being in the right place at the right time with the right person or having one large client willing to take a chance on your unorthodox approach, even if you don’t have the right infrastructure or proof-of-concept yet. 

When I first set out on my own, I knew the consulting industry needed to be disrupted. I knew how I wanted to do it, but I had no proof that my approach would work. I had no proof that client teams would be willing to work with me to “co-create”, or that what we co-created will be of equal quality to — and arguably better — than what Fortune 100 clients have come to expect from Big Consulting. It took one large blue-chip client who was so frustrated with traditional consulting that they were willing to take a leap of faith and allow me to test my approach on their company. 

When you keep proving your value to your clients, and when their teams who constantly complain about consultants are saying how much they’ve learned working with you and ask for more of your time, word gets around. The virtuous cycle of word-of-mouth takes care of the rest. New consultants may not believe one good or bad job can impact them, but clients within the same pool can — and will — talk. 

The consulting industry has been long-overdue and ripe for disruption, and clients are getting increasingly frustrated with an approach that aggravates their teams and demotivates them. I firmly believe that the consulting firms that empower client teams to become the “smartest people in the room” will be the ones best positioned to succeed.

Don’t forget that you still have to bring superior skills, extensive expertise and real value to the table. You just have to leave your ego behind, and use those assets to help your client shine.

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