Service design study on (independent) consulting services with F500 companies.
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New digital opportunities are transforming companies at a faster pace than ever. This has led to shifts in how organisations organise their workforce, moving to more flexible models, modern talent management practices, as well as a re-evaluation of their talent and partner ecosystem. Many companies have recognised this trend and reacted to it. For instance, Microsoft is actively promoting the open talent economy by taking down barriers and encouraging people to innovate, offering funding to anyone who is willing to work with freelance professionals. Tech giant Philips is opening up to remote and freelance work, creating its own ‘talent marketplace’ instead of keeping jobs local. Similarly, Unilever has created its own freelancing talent pool. These mechanisms allow them to access a broader network of scarce and valuable resources that they might otherwise not have had access to.
Riverflex conducted qualitative research in order to better understand the professional advisory needs of organisations in the digital age.
This was done by using a design thinking approach, with 10 selected senior members of F500 firms, to truly understand the behaviours and emotions behind finding, procuring, and working with partners. Based on this, we are able to shed light on key behaviours and trends in the procurement of professional advisory services. This study serves as an informational guide for corporates trying to get to the right mix of professional advisory services, leveraging the core strengths of big consulting firms, boutique consultancies/platforms, and freelancers.
Key questions addressed in the study:
- Selecting the right type of partner: When to look for big consulting, vs. boutique vs. freelance services in the digital age?
- How to find potential advisory partners that match your needs? Finding and first vetting.
- How to make a final choice? Trying to distinguish the good from the bad.
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Finding the right type of partner: When to look for big consulting, vs. boutique vs. freelance services in the digital age?
Figuring out what type of service and when to hire is not easy. Especially when there are many alternatives and options that become available to organisations. However, by making the right choice, instead of the ‘usual’ choice, can help avoid disappointment in the final services provided.
For example, in our interviews, we found that consulting teams who had been hired seemed too large. It felt unnecessary to pay for a manager instead of relying on these teams to do the work. This is an indication that companies are used to paying for outcome based models with coordination outsourced to a 3rd party. In reality, they were looking (but not realising) to procure in a way that keeps the ownership in-house, and just buying the right capacity and/or capabilities.
To help organisations navigate this better, we asked our interviewees what they consider in their partnership choices. The answers can roughly be divided into four dimensions described below.
Figure 1: The decision layers when hiring for professional advisory services.
Purpose: Are you solving for a capacity-, capability- or credibility-based challenge?
- Capacity. When facing capacity constraints, organisations seek external help to meet temporary labour needs. For example projects that ask for temporary project/interim management support, and operational/executional leverage. Typically, these requests have been formulated for both consulting firms and freelancers, with an upcoming trend on independent professionals to take up this role. The
quality of independents is rising as more experienced professionals and ex-consultants enter into this market. It has become more sustainable for organisations to have an interim manager, that can stay on for a longer period to see things through, than having a consultancy run it on a project base.
- Capability. Next to the capacity question, capability or experience & expertise often plays a big role. Especially in change projects, the right skill sets might not be readily available to build new capability, or specific knowledge is only required on a temporary basis. If so, there is no desire to hire internally. In this case, organisations often resort to advisory partners that have a specific focus and track records. Bringing in new perspectives, diversity, fresh thinking, knowledge, and ideas that companies would otherwise miss out on. Particularly, in this area, there seem to be differences in preference on the type of partners. Big consultancies often have a large range of capability and talent available, however, they may be lacking the right people with specific experience who have actually done the work before. Independents, on the other hand, might be more specialised and have deep industry and/or capability knowledge, but seem to dare the status quo less often due to their personal position – this could mean that the organisation misses out on some of the key insights they hired them for.
- Credibility. A third dimension, which seems to help organisations with the above question on which partner to choose, is if there is a requirement for credibility. The opinion of an MBB or Big4 firm can help align stakeholders and manage the politics in decisions. Especially with work relating to the C-suite and Board, this can guide the decision for a larger brand instead of a boutique consultancy or independent consultant.
Ownership interestingly enough was found to play a huge role in the decision between independent consultants/freelancers or (boutique consultancies). In general, independent professionals are almost always hired on a time/material based. As a consequence, they will be added into existing departments, programmes or projects, coordination provided by the client. The idea of hiring a team of different independents is almost not heard or thought off. Consultancies, on the other hand, are almost always contracting outcome based and take ownership of coordination and results. Interestingly enough this came up as one of the frustrations, that they are “too hierarchical” or adding a manager in between that they need to talk to, without much perceived value added. Although this should be one of the key reasons to hire a consultancy instead of an independent. Observation is that organisations are stuck in their mindset with the choices they made in the past looking at consultancies vs. independents, not considering new alternatives or different types of contracting that fit with their needs at that moment.
The size of the project has been found to be another important criterion. When organisations are looking for specific roles, the choice has shifted towards freelancers and independent consultants, or perhaps even recruitment agencies. Whereas large scale transformation programmes, with a lot of complexity, still have large consulting firms as the go-to advisory partner.
“If I need a single project to be managed I often decide on an independent consultant. However, in a big scale project involving business transformation with a lot of complexity, different processes and people turnover, I need someone that can provide sufficient resources for the project.”
Based on our research, companies prefer using consulting firms for large transformation projects. This helps them deliver across different types of capabilities (e.g. strategy, hr, finance), while having enough resources at hand to deliver on the scale, and a broad network in case specific industry experience is required. This is especially true for projects that are multi-country multi-language or involves large scale IT implementation like ERP/SAP.
Interestingly, on large scale projects with multiple partners involved, organisations like to include independent consultants as honest brokers. In a project where all partners involved want to lead, an honest broker can take some of the egos out which helps manage relationships on behalf of the organisation. More often than not, this results in one common plan and focus on the customer goal rather than partners competing with each other.
However, there are also projects and initiatives which lie in between, for which a decision is often made based on the next dimension; framing.
The nature of the service request seems to be of large impact in the interviews we’ve had. When a question is already mostly solved for a programme or initiative, it needs to be executed upon. This is when the most logical choice often leads to hiring a freelancer. When the question is broad and challenging, and there is a higher perceived risk, a consulting firm seems to be the best option. Especially if it’s a strategic question looking into the business model of an organisation.
However, this is a dimension where preferences appear to be shifting, especially in the digital space. New consulting companies with independent models seem to be at place here, as they bring high quality talent with new perspectives and ideas. These consulting companies are better at mitigating risks while working outcome based. This seems to solve the challenge between hiring an independent consultant, who most likely delivers better work, vs. the greater associated risk. Where companies often hesitate to hire a group of independent consultants due to the fact that they would need to provide overall coordination themselves and bear the risk of potential failure of bringing different profiles together, new digital consulting formats solve these issues.
“Hiring independent consultants is associated with greater risk, however, they generally deliver excellent work.”
||Boutique/digital age-consulting firms or platforms
||Big consulting firms
||Best fit if an organisation is looking for capacity in the form of a specific role that temporarily needs to be filled, and the organisation is looking to keep control and coordination in its own hands
||Best fit if an organisation is looking for capacity in the form of a specific role that temporarily needs to be filled, and if an organisation is looking to outsource coordination
||Not the ideal advisory partner looking at cost/value, however could be applicable in the case of large quantities of certain skill sets required (e.g. data scientists, Salesforce developers, etc.)
||Best fit if an organisation is looking for deep (industry) expertise or specific skill sets, and wants professionals that co-create and are embedded with their own teams
||Best fit if an organisation is looking for deep (industry) expertise or specific skill sets, and is looking for challenging of the status quo
||Best fit if an organisation is looking to transform and build capability across disciplines, and/or is looking for challenging of the status quo
||Not the ideal advisory partner for ‘credibility’ projects looking at brand/respectability
||Not the ideal advisory partner for ‘credibility’ projects looking at brand/respectability, unless it’s a reputable and well-known consultancy in its space
||Best fit, as MBB, big4 or similar type of well-known consultancies are due to brand and status in the market
||Best fit as freelancers and independent consultants usually work time and material
||Good fit, as boutique and digital age consulting firms often have both time and material as well as outcome based models
||Not the ideal advisory partner as big consulting firms almost always contract outcome based, and on a project basis
||Not the ideal advisory partner as freelancers/independents usually work time and material
||Good fit, as boutique and digital age consulting firms often have both time and material as well as outcome based models
||Best fit especially with larger programmes, as big consulting firms almost always contract outcome based, and can bear the risk if the value is not delivered.
||Not the ideal advisory partner, however could be applicable if an organisation is looking to add an ‘honest broker’ into the overall management of the programme
||Best fit if the organisation is looking to complete small to medium sized projects and/or if the project is in need of specific skill sets, experience, and/or expertise
||Best fit if the organisation is looking to complete a large transformation or implementation programme, across multi-disciplines, markets, and languages
||Best fit if an organisation is looking for a specialist role that temporarily needs to be filled. Especially in the organisation is looking for time/material contracting that can take place over a longer period
||Best fit if an organisation is looking for a generalist or specialist role(s) that temporarily needs to be filled. Especially in an organisation that is looking for outcome based contracting
||Not the ideal advisory partner looking at cost/value, however could be applicable in case certain roles need to be filled in the interim as part of a big transformation or implementation programme
||Not the ideal advisory partner looking at limitation in (unforeseen) skill sets and network required, and risk
||Best fit if an organisation is looking to solve for a question in a specific niche, or if deep expertise/experience is required
||Best fit if an organisation is looking to solve a large and complex open question that most likely involves multidisciplinary problem solving skills, a broad network, and capacity
||Best fit if an organisation is looking for a professional to deliver on the question at hand, and the organisation is looking to keep control and coordination in own hands
||Best fit if an organisation is looking for a professional to deliver on the question at hand, and the organisation is looking to outsource coordination
||Not the ideal advisory partner looking at cost/value
Figure 2: Perception of partner that fits better to each criterion
How to find potential advisory partners that match your needs? Finding and first vetting
Now, knowing what type of advisory service you are looking for is important, choosing the right partner often poses a challenge as there are hundreds of options in the market. Based on our interviews, we found out that most companies follow a similar scheme in their decision-making process.
Figure 3: How organisations explore their options to find the right partner.
Talking with the executives, a strong personal network plays an important role in finding the right independent consultant or (boutique) consulting firm, even in the digital world of today. A strong personal network plays a vital role in finding the right independent consultant or (boutique) consulting firm. Having said that, LinkedIn seems to be the most useful tool for organisational leaders to seek help and advice outside of their direct contacts. Google, on the other hand, does not seem to be a popular go-to platform to find new advisory partners, but can be used to find out more about a specific boutique or digital age consultancy/platform. This is particularly true when recommended by
Figure 4: How organisations find their partners.
How to make a final choice? Trying to distinguish the good from the bad.
Previously, we discussed the dimensions corporates usually take into consideration when deciding on the type of advisory partners to go with and how they go about finding a selection of partners that might fit their needs. However, when it’s time to make a final call on who to work with, it often comes down to a combination of objective measures (do they have the right ‘hard’ skills to do what they need to do) and subjective feelings (e.g. culture fit- do I believe this person or team is really going to help us?).
“I know whether a partner has the experience for my project after a ten-minute one-on-one conversation.”
Below you can see a rough overview of common steps performed by most organisations to sort out the best advisory partner for the job.
Choosing an independent consultant
Choosing a consulting firm
As you can see, the steps seem quite straightforward. However, the approach can differ between organisations interviewed inconsistency and completeness. For example, at one organisation they would define the criteria for a scorecard in advance while bringing a diverse representation of disciplines to the pitches. While at another organisation this was done on an ad hoc basis and on gut feel. In another organisation, they would always check the specific partner online before deciding on final procurement. In one case finding out that there were bad reviews on the glass door concerning sexual harassment by someone in the leadership team, was followed by a last minute no-go.
As usual, the devil is in the details. And as experienced by our interviewees, it’s hard to base a choice for a partner on someone’s CV, proposal, or a short face-to-face session at best. We’ve included a list of signs mentioned by our interviewees on how to distinguish the “good” from the “bad” during the decision making process.
- Limited mindset and adaptability. A lack of effort to get into the mindset of the company and understanding the unique challenge and business environment that a company is working in
- A cookie cutter solution. Without fully understanding the nuances of the company and the organisational environment. Assuming that just because a solution worked for one company, it will work in every organisational context
- Vague claims of experience. Showing off and claim to be an expert in any field without supporting it in a credible way (e.g. by providing clear explanations and situations with cases provided, while not having the actual experts at the table)
- Challenging for the sake of challenging. Challenging is considered as valuable when it involves new insights. However, when there are no clear ideas on how to better tackle the problem, the solutions may not be helpful
- An arrogant attitude. A humble and collaborative mindset will work best in making change happen in the organisation, and getting advice accepted
- Being too pushy and salesy. A prospect advisory partner that is already trying to sell beyond scope, has a higher chance of trying to pick-up scope beyond what is needed (e.g. looking to restructure the whole company without being asked to do so)
- Working style mismatch. Signs of a working style that does not fit your organisation (e.g. being very hierarchical while the company culture is flat). Some partners might be great experts in their field, but if they cannot adapt to the culture of your company it will be hard to collaborate and get value out of them
- Selling an army of people. Trying to sell large teams that double the role with the client organisation. Often this also includes a pyramid of support roles and/or senior roles without good reasoning behind why they are needed
“A junior consultant that produces nice PowerPoints and makes analysis does not provide added value. I have these resources internally as well.”
What organisations should be looking for
- Tailored solutions. Show the ability to quickly and efficiently familiarize themselves with the context of the organisation and what you are looking for, adjusting their toolkits according
- Evidence of external perspective and knowledge. This provides an indication of added value to the process and potential solutions which could help overcome business challenges
- A hands on approach and workstyle. Offer hands-on and goal-oriented solutions. Signs of an ability to define clear targets and show the ability to achieve them in an agile and unbureaucratic manner
- Frameworks, structures, a specific mind-set and skillset. This shows added value and the potential for the advisory partner to get to a fitting solution within a much shorter time frame than would otherwise have not been possible
- Constructive challenging of your organisational perspective. With interesting and alternative views, showing they do not take the status quo for granted
- Support between projects. The prospective advisory partner is already functioning as a soundboard in the first sessions, showing enthusiasm to help your organisation and team get to new insights and opportunities to improve
- Willingness to train and educate internal employees on how to do it. Showing intent to build long-lasting capability instead of dependency
Finally, after having made your selection, it is important to keep evaluating the performance of the advisory partner throughout the delivery cycle, and not just at the end. Success comes from expectation management and adjustment. Constant feedback and the extension of the evaluation criteria by more than just the final result improves the overall experience and outcome. Managers should not be hesitant to constantly evaluate partners and intervene if they believe that the wrong direction has been taken.
Danique Wagemaker is a digital strategy and transformation consultant. Former Deloitte Digital Manager specialised in digital strategy and marketing transformation, ex-Google digital advertising strategist. Past clients include Ahold Delhaize, Unilever, Adidas, Philips, and Danone.