The Cambrian explosion in consulting

By Fiona Czerniawska

Around 540 million years ago, the earth was a seething cauldron of innovation.  Up to this point, most organisms were simple, single-cell affairs, but in the course of around 80 million years (the blink of an eye in evolutionary terms), life as we know it, with all its incredible diversity, simply happened.  Theories abound about what happened and why, but it may have simply been that our distant forebears had reached a tipping point – and the blobs suddenly became complex bodies.

So perhaps we shouldn’t be too surprised to see that the murky waters which flow between consulting, interim management and contracting are giving rise to a new type of firm – or at least that’s what we’ve argued in a new white paper, The Rise of the Hybrid.  This new creature, still emerging from the primordial consulting ooze, is important because of what it implies about the way a firm thinks about itself.

The first examples of this are coming ashore in the financial services sector.  Here, repeated waves of regulatory-driven change, combined with headcount restrictions for permanent staff have created a huge and systemic reliance on consultants.  It’s also been hugely expensive, but the increasing number of resource management firms willing to place individuals on demand, rather than entire teams and at cheaper rates, has created its own problem – a world in which heavily regulated institutions are running enormous risks by relying on armies of unsupervised contractors with little loyalty and certainly no incentive to transfer their know-how to permanent staff.  That situation has inevitably resulted in considerable blurring of the battle lines, with consulting firms in particularly behaving more like body-shops (unable, presumably, to resist the temptation of months of high volume, if low margin, work).  Clients, unsurprisingly, are confused: “First they told us that they could only provide a team with a partner in charge, then they said we could have as many junior people as we need, but that partner oversight wasn't necessary.”

So the fact we’re seeing firms combine both consulting and body-shopping isn’t what’s important here: such firms have been around for years.  What we note in our report is the emergence of a breed of firm which does this consciously, offering clients the chance to choose between one delivery model (consulting teams) and another (individual contractors), depending on their requirements, budgets and appetite for risk.  Rather than a chance mutation, it’s a deliberate attempt at genetic modification.

Stephen Jay Gould, writing about the Cambrian explosion cited Sigmund Freud’s comments that the great revolutions in the history of science have one common feature: “They knock human arrogance off one pedestal after another of our previous conviction about our own self-importance.”  Perhaps that's happening in consulting too.