Shaping the future of consulting

There's a growing consensus amongst consulting firms that the pyramid model, around which their industry has so far shaped itself, might have had its day. Geared towards the idea of a nice shiny partner selling in his formidable knowledge before deploying legions of fresh-faced young guns with intellects the size of Massachusetts to mop up margin, clients are starting to question whose interests the model serves best. Few are concluding that it's theirs.

Anticipating, if not already experiencing, a rebellion, many consulting firms are starting to look to a future beyond the pyramid. In the course of researching a recently-launched report - A new front in the war for talent, produced in partnership with Penna -  we heard consultants talking about thinner pyramids, coffins, mushrooms, barrels and, most commonly, diamonds. Diamonds have a number of advantages. Firstly they recognise the idea that client demand for consulting services (as opposed to interim resources) no longer favours firms with...ahem...wide bottoms. Secondly they accept that lovely as it might be, moving to a top-heavy model (stop it) is neither easy (because the most senior people tend to be the hardest to recruit) nor without risk (because these are people you can't afford to have on the bench). And lastly diamonds just sound nicer than mushrooms and barrels, and infinitely more optomistic than coffins.

We're not completely convinced by any of these shapes, but then we'd be the first to accept that our latest suggestion - the hourglass - isn't exactly without fault either. What we are convinced about is that something needs to change. A new front in the war for talent found evidence of a growing competitive interface between clients and consulting firms to sit alongside the existing front between consulting firms and their competitors where talent is concerned. Fuelled by a growing desire amongst clients to recruit consultants, this front is both different - consulting firms don't want to beat clients, they want to work with them - and one in which the battle (friendly though it may be) is over something far more significant than talent: the future of consulting itself. The competition is increasing, too: the average consulting firm we surveyed said they had lost 8% of their full-time consultants to industry in the last year. Against a backdrop of attrition rates running at about 11%, that's quite a chunk. And many - as the chart below shows - expect it to continue growing over the next three years.

What consulting is, and, just as importantly, what it isn't, are matters about which clients are becoming increasingly clear. Demand is moving to the extremes of the pyramid: at the top end, clients are looking for solutions from the most experienced consultants and are willing to pay top dollar for them. At the bottom, they're buying contingent labour and - while they may be happy to buy that from consulting firms - they're not willing to pay consulting rates for it.  Threatening though that may feel to many consultants, the reality, at a time when consulting has become a dirty word, is that change can't come soon enough.

There's still time for consulting firms to figure out what shape suits them best, but figure it out they must, and doing so will start with one question above all else: what business do we want to be in?