Why is Facts Based Consulting Winning?

Thursday June 21, 2012 , 3 min Read

[The argument comes from a person who has managed to create a highly successful consultancy in just about 4 years]

A manufacturing company from India was gearing up for global expansion and was looking at a consulting firm who could support them with prioritization of countries & go-to-market strategy for those selected. Large consulting firms proposed Black box solution with lots of high level Gyan!

The client company and their senior leadership actually chose a partner who demonstrated "this is how we will collect recent, and relevant data, develop deep-rooted insights and based on facts will recommend a solution". Many such companies are doing the same to avoid black-box solutions from consultants with too many years of experience and not ready to dig the current data. Client are not looking for top-down estimations any more. They want hard worked data and insights to take important decisions!

We come across several client situations and bitter-experience stories of clients that are in need of action-oriented advice based on insights/data and facts. Not Gyan! Not Old but current!

Gone are those days when large corporations will necessarily call Big 4 consultants whenever they have to develop strategic direction. They are hiring Corporate Strategy from Ivy League and top consulting firms to do the same job internally with greater focus, attention and cost economics. And they are inviting consulting firms that can work with them especially bringing in the much needed insights and hard core data!

Even the Governments have started to think like that. Gone are the days when 2 senior partners from Big 4 will go and use their experience to devise hypothesis based strategy to government clients. Insights have to be recent, relevant and facts based!

Another reason why Experience is being severely questioned as a tool to devise future strategy is the speed of Change. Most of the new age industries and markets are changing so fast that if companies don't adapt fast, they may fall down the cliff. At the same time, consultants with tons of years of experience in a particular field are becoming increasingly redundant. And its very difficult to keep pace with all the developments. So, an active research based approach is what is working better. Thats is why you see so many generalist consultants these days.

One could argue that - do we really need consulting/research firms? Its like asking, whether you need a doctor when you get ill. Whether you need a doctor to make sure your kid is growing well. Yes? But you could take medication yourself. After all most of the time its the same medicine for Viral fever that you got? No. Like doctors consultants/researchers become extremely skillful in understanding and breaking down business problems (Minto's Pyramid principle, etc.), developing a framework/model/process using which the problem is solved. Since consultants would come in as outsiders it bring fresh solutions and perspectives to the table often consider a key advantage.

So wouldn't it make a lot of sense for solving business problems based on the approach described in this story above? Isn't data driven approach much better than gut feeling based decision making. Wouldn't it make more sense to replace 1 old school consultant with 25-30 years of experience by a team of 4-5 researchers (from the contemporary world) and advisors who take inputs from the entire eco-system to suggest a solution?