Business model

Consultants really don’t help themselves sometimes.

The word “product” is one most firms would like to steer clear of. They think it smacks of a supermarket approach: put a standardised consulting process in a box, pile it high and sell it cheap. But this is a very narrow-minded way of thinking about it. Sure, you can productise a process in such a way that anyone can do it, destroying value to the client and consulting firm alike. But you can also take a more Lego-like approach, either:

Internal consultants have a chequered history: one minute they are on the up, eager recipients of corporate largesse; the next they are on the down, seen as a luxury the organisation can no longer afford. Lacking the brand and independence of external resources, they have widely been seen as the “poor manager’s consultant”, the people you use only when you don’t have the money for the real thing.

Recessions are extraordinarily effective tools for sorting winners from losers. Just as with retailers on the High Street, we’re seeing signs that the consulting firms with weaker business models are starting to sink to the bottom, leaving their more robust rivals bobbing around in the still choppy waters.

But a problem for one set of firms is unquestionably an opportunity for another. Recessions also give us a glimpse into the future, showing us which business models are likely to perform best.