Have you ever wondered how consulting firms deliver faster results with more sophisticated solutions and services to their clients while staying relevant given the many digital and business disruptions happening in today’s world? Like any other business, it is critical for consulting firms to create an agile business model that is capable of both knowledge transfer and knowledge management. And to accomplish this, consulting firms today are looking beyond the face of the traditional “pyramid business model” and unlocking the power of collaboration.
Why are collaborative structures important in consulting firms?
Since the emergence of the first consultants, the industry has seen many changes and growth into various fields of expertise. However, to date many consulting firms typically work with clients in a pyramid model, where the senior partner, as top management, is responsible for maintaining the relationship and communication with clients. Whereas junior consultants are responsible for strategizing and executing the project on behalf of the client.
While this model is still relevant in most fields of expertise, it may not be able to meet the evolving needs of clients wanting to receive a high-quality solution in a timely manner. If consulting firms want to gain a competitive advantage in terms of value creation, it is vital to adapt with emerging business models such as collaborative structures. With this model, consulting firms can increase their performance success through both cross-functional collaboration and external collaboration with other consultancies, depending on their needs.
Dorian Faveriel-Jeanjacques, banking consultant at Invoke Luxembourg, tells us: “Collaboration within my company involves a manager who manages three different teams, where you have a consultant who ensures the regulatory watch for banks and UCI. Then you have a second group of consultant developers who work on the development of the software that we distribute to our clients. And finally, another team of hotline staff or testers responsible for support and answering any questions from clients. In this way, collaboration is distributed within a company across the different teams, as well as with clients.”
Taking this example, it becomes clear that a collaborative structure relies on the three major pillars of performance:
- Knowledge sharing: where promotion of shared expertise across different teams and departments can help improve the quality of the solutions that the firm delivers to its clients.
- Innovation enhancement: where collaboration can spark new ideas and approaches to problem-solving and leads to innovative solutions that can differentiate a consulting firm from its competitors.
- Team culture: where building a sense of teamwork and shared responsibility among employees leads to greater job satisfaction and employee retention.
But how can consulting firms implement such collaborative structures?
Understanding a consulting firm’s core values is essential when it comes to transitioning into a collaborative work structure. A whitepaper article by the QMP group describes a collaborative structure as “a model with four circles of consultant collaboration,” where a company can only strive under the four umbrellas of trust, business development, thought leadership, and project execution while maintaining a focus on their core ethics, integrity, intellectual capital, and relationships. Taking this into consideration, firms can implement the said structure by adapting to one or more than one type of collaborative structure.
Consulting firms who are looking to stay close to home can implement the cross-functional type of collaborative structure. In this type, teams across different functions in the company bring together consultants from different departments or practice groups to work on a project. This structure clearly promotes knowledge and expertise sharing and can lead to a positive mix on a wide range of skills and perspectives.
Conversely, companies that are more inclined to create collaboration based on expertise can focus on implementing practice groups or communities of practice. In this type of consulting collaboration, firms can promote practice groups composed of consultants who specialize in a particular area of expertise such as finance, marketing, or technology. A schedule of regular meetings can be arranged to share best practices that can help build a sense of community as well as shared purpose within the firm.
Additionally, firms can also create and customize collaboration based on the project requirements, manpower requirements, and technological requirements, as well as strategic requirements across external firms.
What might be some obstacles to consider?
While collaborative structures can bring many benefits to a consulting firm, there can also be challenges and obstacles when it comes to implementing them effectively. Our interviewee, Dorian, remembers: “Sometimes people can be passively quitting, and trying to collaborate with them can be challenging. And in addition if the firm’s top management has a poor-quality communication with poor written policies, collaboration cannot exist, or at least it exists with insufficient results.”
The communication barrier is one of the major challenges for a firm adapting to collaboration. Making sure that everyone is on the same page can be a big hurdle to overcome. And if paired with ineffective management and resistance to change it can result in failure in establishing a culture of collaboration within the firm. In addition to that, another challenge that a company implementing collaboration often faces is concerns related to intellectual property. How can a consulting firm deal with a lot of sensitive and proprietary information since sharing of such information becomes essential?
Similarly, collaborative structures often rely on technology to facilitate communication and information sharing. However, if the technology is outdated, difficult to use, or not integrated across different teams or departments, it can create barriers to effective collaboration.
Do the benefits outweigh the drawbacks?
In spite of the challenges that a collaborative structure may raise, the benefits of high-efficiency, high-quality solutions and increased teamwork definitely outweigh the drawbacks. Consulting firms who are inclined to adapt to a collaborative structure can overcome the above-mentioned challenges by fostering open communication, clarifying individual roles and responsibilities, and establishing a training and support system, as well as addressing conflicts in a proactive manner. By prioritizing collaboration, consulting firms can differentiate themselves from their competitors and drive their firm’s future success.
HariKrishnan K; Mohamed Omar Ait Mouh; Shrisha Ranjitkar
