By Fiona Czerniawska
When I wrote an article on this blog about changing business models a couple of weeks ago, I had no idea I was mining such a deep vein of interest. Sadly, most of the comments can’t be published in an open forum – not surprisingly, perhaps, given the strategic nature of the question – but it’s been a salutary reminder of just how important an issue this has become for consulting firms.
Most of the behind-the-scenes debate has focused on the question of how much needs to change: is this a cosmetic problem, or something more deep-rooted?
Cosmetic doesn’t mean unimportant. We hear constantly from clients about the importance of specialist skills and how frustrated they get at the inability of consulting firms to explain clearly and unequivocally what they’re good at. Here, the argument goes that what consulting firms need to do is separate out the different parts of their business under different sub-brands. Thus, a healthcare practice, say, would be presented to clients as a separate entity, a different name under the main brand of course, but distinctive nonetheless. Corporate communications, thought leadership and websites would all be reconfigured to support this. At worst, this could be a recipe for unbridled chaos (would anyone like to hazard a guess about just how many sub-brands would be spawned from a typical big firm if the iron hand of brand control was lifted?). But at best – and that means probably confining this strategy to a small number of key sub-brands – it would allow firms to put more investment and marketing effort behind specific areas of high growth potential. Nor can this strategy be entirely superficial: clients might reasonably expect to see a firm’s real experts and most senior in a field working together. But they’re equally unlikely to expect that expertise to permeate the lower rungs of consulting, so firms would be able to keep their resource pools flexible, allowing junior and mid-ranking consultants to work in different areas as required.
Those in favour of changing business models argue that this level of change won’t always be sufficient and that the inherent problem is that the people involved in different areas need to be charged out at, and paid, different rates. Indeed, it’s over prices that the debate about which sub-brand tips over into one about which business model. While clients accept that consultants can work in different fields, they really struggle with the notion that someone is charging X for one project but only Y for another. Confusion reigns, with clients worrying that they’ve been over charged. The result of that is that, if you have a different business model, you have to have a different sub-brand.
So here’s my highly simplistic advice to all those firms which have been emailing me recently. Ask yourself if the price point is different: if it is, then you’ll almost certainly need or want to pay people differently. If that’s the case, you’ve got a different business model – and a different business model needs a different brand.
End of discussion.
Source:: Source for Consultants