Why can't consultants fix their own business while fixing other people's businesses?
Haebom
3
Created by
Haebom
Created at
The world’s largest consulting firms are in crisis. While demand for consulting services increased significantly during the COVID-19 pandemic, as business normalizes, clients are cutting costs. With consulting contracts plummeting, leading consulting firms such as McKinsey, BCG, and Deloitte have also begun restructuring, including layoffs, delayed promotions, and reduced benefits.
As the competition for hiring has been fierce, retraining or firing employees has not been easy, so there have been many cases of retaining employees even when there is no work. Some people work long hours, and some people watch Netflix because they have nothing to do. There are also cases where performance evaluations are strict and employees are quietly fired.
Clients are reducing their consultant budgets and investing in technologies such as artificial intelligence (AI). Of course, consulting firms are also exploring new business opportunities using AI. There are also changes in the industry, such as an increase in hiring solo freelance consultants.
Some executives are optimistic that this slowdown will be temporary, but spending cuts by clients are likely to continue for some time, as key businesses are shrinking due to the shrinking M&A market and restructuring of banks.
Meanwhile, the perception of a “lifetime job” is collapsing. Deloitte cut 1,200 jobs, and EY laid off more than 100 partners in the US. The layoffs were unusual and shocked the industry. McKinsey also cut 1,400 employees.
College hiring continues, but the timing of hiring is being delayed. According to a recent Wall Street Journal article, some new recruits are waiting for months without work and surviving by doing part-time delivery jobs. Some of them are having a hard time finding other jobs because of their high salary.
As the consulting industry faces a serious crisis, attention is focused on whether it can lead change on its own. It seems necessary to respond to changes in client needs and find new business opportunities. However, courage and a flexible mindset that are not afraid of change will be most important.
The reasons why consultants fail to do their jobs can be analyzed as follows:
Lack of objectivity: When you look at other people's problems, you are objective, but when it comes to your own organization, you tend to be subjective. It becomes difficult to face the essence of the problem.
Intertwined interests: The interests of each member are intertwined, making it difficult for anyone to easily lead change. They are unwilling to give up vested interests.
Inertia: We become so engrossed in long-term practices and cultures that we don’t feel the need for innovation. We just think of it as someone else’s story.
Lack of execution: They are good at prescribing prescriptions to others, but they are reluctant to take the initiative to solve problems in their own organization. Plans do not translate into action.
Limitations of the methodology: Typical consulting methodologies may not be sufficient to solve problems in one's own organization involving multiple stakeholders.
Overconfidence: The passion and energy you have for working for others is not transferred to your own work because you think you know too much.
In fact, monks cut their own hair.
Therefore, in order for consulting firms to overcome the crisis, they need to face themselves, not others, and have leadership that can communicate and persuade with sincerity so that all members can participate in the change. They need to find a new breakthrough with flexible thinking, without settling for existing practices and methodologies.
In some ways, the big three consulting firms and big four accounting firms are also trying to change by increasing their staff in the data and AI fields. There are talks that simply reducing staff or temporarily worsening financial situations is the end of consulting, but personally, I remember what a person who has been a consultant for more than 10 years recently said. He said that consulting is a logical process of "persuasion" and "creating reasons why something should be done." Looking at it this way, consulting felt like a very humane job.
Subscribe to 'haebom'
📚 Welcome to Haebom's archives. --- I post articles related to IT 💻, economy 💰, and humanities 🎭. If you are curious about my thoughts, perspectives or interests, please subscribe. Would you like to be notified when new articles are posted? 🔔 Yes, that means subscribe. haebom@kakao.com
