With many businesses challenged by COVID-19 and Brexit there may be a real urgent need to adapt, pivot and change but little budget spend - how do you get help?
You can get some of the best management consultants in the UK adding value in your business for a fraction of the cost of what the Big Four type consultancies will charge you, delivering better outcomes, and more lasting improvements. Here is the simple how and the why, and to explain, let's start with the status quo...
Management Consultants have their place and are highly valuable
Despite the old jokes about consultants borrowing your watch to tell you the time, management and business consultants can play an essential role in determining the health and performance of a business. I like to think of our domain analogously spanning that of doctors and surgeons on one hand and elite sports scientists and coaches on the other; helping businesses survive, be healthy and outperform their competitors. You don’t need this kind of help every day, but when you do, you certainly do.
So much so, consultancy is big business, and is worth around £80 billion in the UK alone. The Big Four (PwC, Deloitte, EY and KPMG) are huge and account for about 40% of this market. While they may dominate much of the press, business opinion and thought leadership every consultant will tell you that projects are sold on relationships and trust with individuals not Big Four brand names. There is such a broad spectrum out there.
Why is Management Consultancy so expensive?
First you need to understand the, on-the-back-of-a-fag-packet, rough cost model of running a management consultancy. A big, but by no means the only, cost is the consultants' salaries, and equally the biggest misunderstanding. There is always someone on the client project who does the footballer comparison… “what, £1600/day, that’s £8K/week, so you make £400K/year? and you are only 29?” … just not true. Day rates firstly need to factor in utilisation (between 40%-100% depending on seniority of consultant) - ironically the more experienced and valuable an individual becomes the less they actually practice (in big firms). Then there are many overheads (IT, marketing, accounts), and ‘BD work’, and R&D, and prime London offices, and all the other employment costs and taxes - so in reality, the consultants ‘basic salary’ may only be 20% of the day rate (x250) you are being charged.
"They’re still rich, arrogant tossers!:” I’m sorry, this is also such a misconception. While I have met a d!ckhead or two along the way, my experience in management consultancy is that the individuals drawn to work in this field are some of the nicest, brightest, honest, most interesting, well rounded, well meaning, motivated, caring, responsible individuals - certainly those that stand the test of time (… to my earlier point - projects are sold on relationships and trust).
Okay, so how DO you get a top consultancy service at a 75% discount?
In short, tap in the ‘dark web’ of independent management consultants. Independent, as in, one-man ltd co. bands. Web, because we form a natural network, we all know 5-10 similar independents, who all know 5-10 more each - within a couple of phone calls the network (or lets call it virtual team!) is 10’s or 100’s. And ‘dark’ (web), because the network is largely invisible from the vantage point of most businesses.
Who are they? Here is the persona; Independent management consultants, typically aged in their 40’s and 50’s, worked in industry, worked in big and/or small management consultancies, had enough of the consultancy corporate politics and BD/sales targets, want to be more hands-on, positively choosing work/life balance over the jetset and most crucially highly capable individuals that will survive as independents without the corporate crutch i.e. they survive on the quality of their work, the relationships they build and the referrals they receive.
5 reasons you should tap this independent network:
…"independent consultants deliver at least 4x better ROI than the Big Four” (Me, 11/11/2020)
Day rate - expect to pay between 35%-65% of the day rate compare to a medium or large consultancy. Independents have a completely different cost base and day rates carry a fraction of the overheads (although utilisation is still a factor).
Quality and experience - get the grey-haired guy not the keen young graduate. Independents are typically highly experienced (would be partners and directors in large firms) but have a passion and preference to work hands on the problem in hand.
No. of project days - independents won’t (can’t?!) bloat the project, where big firms want to sell in a whole team, oh and plus an extra body for ‘project office’ to boot! Independents are more likely to lean (no pun intended) the opposite way keeping it lean to deliver the maximum value in the least billable days.
Internal leverage - independents will deliver more of a project using the business's own internal resources. Working closely with the internal team has many subtle benefits in terms of engagement, learning and making sustained change.
Invisible specialist team - independents’ strength in depth of ’squad’ remains largely invisible until a specialist need emerges, but you can bet 9 times out 10 the independent has a specialist who can brought in. Putting a team together of handful of top consultants is where this ‘dark web’ of independent consultants really comes into its own. You don’t know it is there until you present the need.
So do the maths… 50% of the number of billable days @ 50% of the day rate = 25% of total cost.
And consider the quality… more experienced consultants, with more skin-in-the-game, more internal engagement and greater knowledge transfer.
Take away...
Over 25 years I’ve never had a job that was about the routine and repetition - I’ve always had to challenge and question the status quo. Management consultancy has its place, and is complementary to business-as-usual and good management, in the same way as your GP or PT is complementary to a healthy lifestyle.
Accessing the help and support of some of the best consultants, at a fraction of the going rate, might be the smart decision that gets you ahead of the competition.
About Emanto Consulting
We are consultancy engaged in technology and digital transformation, helping business either develop technology better, or use technology better.