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Consulting is an immature industry in Asia

Organizations use consultants because the right consultants, engaged for the appropriate reasons and managed effectively can assist the organization to achieve greater levels of performance. However making sure that the expected value is actually delivered requires a lot more than good intentions. This is especially true in Asia where it is often difficult for organizations to source capable and qualified consultancies. While the consultancy industry is a mature one in the developed markets of the UK, most of Europe and the US, it is still in its nascent stage in Asia. The breadth of capability and depth of experience of consulting firms, even the global ones, in Asia is a fraction of that available in Western markets.

Building a consulting practice in Asia is challenging

Experienced executives in Asia know that it takes many years to truly understand the nuances and practical realities of building a business in each different country, particularly in the services industry. Building consultancies is even more difficult because the knowledge, techniques, and approaches of the consulting craft must be imparted to suitably qualified individuals across the strata of the consulting pyramid of senior managers, managers, senior consultants, consultants, and analysts. This is not a straightforward endeavor. Success depends on having a core team of experienced consulting partners who have invested the necessary years in consulting in Asia (either local hires or expatriates) and who are committed to remain in Asia to coach and mentor the consultants in their often rapidly-growing practices. Such consulting partners have been rare in the Asia operations of the global consulting firms. Due to the frequent rotation of consulting partners, loyalty to a firm has not been engendered at the consultant level, resulting in high staff mobility between firms fueled by the attraction of an instant promotion or salary increase. Thus local consultants often carry titles that are not justified by their cumulative client experiences and level of skills, but are nevertheless charged out at hourly rates that are at least one scale higher than those for comparable resources in Western markets. Further, consultant training programs are often an ineffective tool for developing strong local consultants because programs devised in the west are seldom adapted to acknowledge Asian approaches to learning, education and training, let alone to incorporate Asian business culture norms for how expertise is applied and change is facilitated, or for human interaction and communications. Compounding the challenge is the significant diversity of language and cultural in Asia that prohibits the development of a regional pool of consultants to be mobilized to apply the right expertise to clients in which ever country it is needed. Thus, the fortunes of consulting practices in Asia often rise and fall in three to five year cycles, synchronized with the tenure of Western expat consulting partners seconded to the region. Certainly most consulting firms have not been able to achieve a capability level in each Asian country that is consistent with their capability in Western markets. Asia-based clients of consulting firms should be careful that they are not paying for the learning curves and mistakes of ‘new-to-Asia’ consulting partners and fledgling consulting practices. That consulting firms are lagging behind their clients in establishing themselves Asia is part of the problem – instead of already having local knowledge and experience to provide to their clients, they are more likely to be learning on the job as they scramble to assemble teams to meet the requirements of their clients who are already operating in Asia. Yet executives are often convinced by the sales pitches of partners representing familiar Western brands, slick presentations by fly-in experts, logo-intense qualification statements, and reassurances that they can trust the global firm, and fail to assess the real on-the-ground capability.

Buyers must assess individual consultant capability

A buyer of consultancy services cannot assume that just because a consultancy has performed projects successfully for the organization in London or Paris, that the same consultancy will have equivalent capability in Asia. For example, buyers must learn to recognize when proposals presented to them are simply cut and paste exercises (borrowed from proposals and deliverables created in Western markets) without any depth of local knowledge and capability. And they must question the team’s capability if, during the proposal process, almost all the talking is done by the partners or fly-in subject matter expert—this is usually a sign that few members of the proposed project team (the people who will bill the majority of hours and fees) have actually worked on a similar assignment. Given the country, cultural, and language diversity in Asia, it is the individual consultants rather than the brand that will determine project success. Therefore anyone hiring consultants needs to invest the time to meet the actual team members to understand how relevant their experience is, and to verify that they are indeed available for the time commitment promised. Given the scarcity of consulting talent in Asia, buyers need to make sure that the resources promised are contractually committed to the project for the required duration and that the consulting firm cannot replace or substitute resources at will.

Proactive effort is required to extract value from consultants

Consulting buyers in Asia must carefully define the roles where consultants can truly add value, learn to identify which specific consulting resources have the necessary expertise, be creative in configuring an integrated team of internal and external resources (sometimes from multiple sources), and actively manage the consultants to deliver a well-defined business outcome, recognizing that approaches to using consultants, and indeed which consultancy can deliver, may vary from country to country in Asia.

For anyone planning to hire consultants in Asia, it is very much buyer beware.

Here is the link to the final report based on the consultant’ survey results – view the survey results here.

Since this survey was conducted we conducted similar research with consultants on their perceptions of the factors that determine client satisfaction – in April we will publish the comparison between the two surveys – which promises to be very interesting.

We enjoyed the discussion with Joe and look forward to some lively debate on this topic in Chicago.

No this is no April Fool’s joke!

Despite the UK Public Sector cutback on consulting expenditure, the City of London signs  ‘value-based’ deal with Accenture.

They will pay Accenture £12.5 million to save £30 million – over five years! This is a very expensive project. For a relatively modest saving! Consultants like to do procurement projects where they can earn a percentage of the achieved savings.  But the 42% contingency that this one contemplates seems outrageous! And surely the savings target should be much higher – a saving of £30 over five years hardly seems worth the effort!

via City of London signs £12.5 million ‘value-based’ deal with Accenture – ComputerworldUK.com.

This blog raises the question of where these people would come from (good question) and talks about them rising up through the ranks of the firms (bad answer)!

For the consulting industry to be able to provide quality over quantity, the old model of staff rising up through the ranks of the firm just wont work – there will not be enough of them, if the pyramid is gone.

Consulting firms have to become better at figuring out how to turn knowledgle, experienced industry hires into consultants. They will have to come up with proper training, mentoring and shadowing programs to allow non-career consultants to become effective at consulting.

So far consutling firms don’t have a good track record of doing this – one factor is arrogance – only someone who has worked their way up from consultant knows what it takes to be a good senior consultant. Another is fear. If consulting firms can turn non-consultants into consultants, then anyone can learn to become a consultant, their client staff too!

Why should the career path between consulting and industry be a one-way street? Surely consulting firms can see the value of having seasoned managers to position alongside client managers – someone who speaks their language and who has walked a mile in the client’s shoes.

With their focus on people development, learning, change management and other HR related competencies, developing this capability should be a no-brainer for consulting firms!

Related articles

• A tipping point in the structure of the firm (sourceforconsulting.com)

We are now making various presentations that we gave last year available on SlideShare.

This is a link to the presentation we gave to a group of MBA students at the University of Chicago Booth School of Business. Although most of them were more likely to become consultants, than to hire them, certainly in the immediate future, they found it valuable to understand what they should expect in terms of client’s expectations of consulting services.

If you haven’t used this resource, SlideShare is a great place to find all kinds of well thought out presentation material on a wide range of topics.

Related articles

• A year of innovation at SlideShare (slideshare.net)
• 7 Presentation Secrets From SlideShare (hubspot.com)

MIS Asia – How to Better Manage Consultants

Each issue, editors choose four recently released books to review. We were delighted to see that “Extract Value from Consultants: How to Hire, Control, and Fire Them” was one of the books selected for this month’s edition – check it out.