A new consulting contract

One of the issues that we have debated the most these months in Recúbica\ has been how we wanted to name what we were going to do: agency, studio, consultancy or boutique. The decision is not trivial, since the nature of the company, represented by its denomination, places a specific type of service and culture in people’s heads, which conditions expectations regarding the type of work and its value.

The truth is that for some years I have been detecting a growing rejection for the word “consulting”, even in the largest companies, which in theory are the natural customer of this sector. I do not want to go into an exhaustive analysis of the reasons why I think we have come to this, but I will try to summarize them in a simplified way: consulting has ceased to provide relevant value to organizations.

At another time I will comment on the importance of the word “relevant” in Recúbica, but I think it is quite appropriate to question the real value consulting  offers to current organizations. These have evolved and matured, and cover, within the organization,  much of the knowledge that was usually requested to external collaborators.

This has a key direct implication: the consultant’s “deliverable” has changed. The client does not expect to receive a solution but rather a facilitation to find it for itself through the definition of the appropriate questions and the co-creation. It is evident that in this model the value creation must be different and so will be its measurement. This of course includes a redefinition of the economic case of the projects, both in terms of price and of success indicators.

In the 80s and 90s the objective in any organization was to standardize, identify, incorporate and follow their sectors’ best practices. This led to the definition of standard processes in the company’s most important areas: financial management, purchases, human resources or sales were defined through standardized tasks and roles. Each sector also had its own processes, marked by laws and best practices: banking, insurance, health, travel and even the new telecommunications sector observed how all organizations converged towards similar structures and dynamics. Efficiency and predictability were the end goal.

Predictability today is an unrealizable utopia. It is no longer easy to predict anything with certainty beyond a few months, so the analysis of our possible futures has now become even more important than it already was. Organizations can’t ignore how their context will evolve in a more distant future than that contained within their traditional two or three-year strategic plans. We must look beyond what is known (2–3 years ahead) to be able to identify trends and opportunities with which to create the future of organizations.

Regarding the objective of efficiency, in today’s organizations this factor is not enough to guarantee its future sustainability. Not only economically, since this will also depend on elements such as the quality of the company’s customer’s relationship, its employee’s happiness, its environmental and social relationship as well as many other factors over which it is not easy to have control. Working in these areas takes us out of the “ISO standards” and leads us fully into creative processes, user experience, service design, etc.

One of the implications of all of the above is how to generate the value provided to the customer. We must assume that it will no longer depend only on our services, but that we must incorporate an ecosystem’s knowledge and value: specialized startups with disruptive products, specialized studies in specific sectors or skills, data providers, public bodies, etc. Companies must therefore be able to collaborate and do so not only efficiently but generating a value which otherwise would be impossible to generate separately. Suppliers are often partners. This should not be alien to the consulting sector as it represents one of the more pressing needs they have. Current consultants must be able to cooperate on projects with other companies in order to generate value for their clients.

Finally, we cannot forget transparency and honesty. On many occasions when the consultant’s work has not been adequately justified, less transparent explanations and models have been used. However, clients (often ex-consultants) know the system well enough to question and demand more and more of it.

All of the above requires a new consulting contract, in which everyone’s expectations and demands are reviewed and in which new assessments, evaluations and work systems are defined. As a consequence, the consulting business model itself is under review and cannot be separated from the efforts we are asking organizations to make: lighter, more customer-focused, more agile.

At Recúbica\ we advocate for a new, more transparent and lighter contract, closer to the reality of each organization and that, at the same time, incorporates a new vision of the business and its strategy. We need to commit to the methodologies and transformations we are asking our clients. And now is the time to do it.