How Consulting Will Likely Change Because of the Pandemic – Disruptor League

If you work with consultants or have your own consultancy, take note: Things are changing, fast. Right around the corner are threats or opportunities, depending on how you respond.

I’ve already written about how the management-consulting industry is being disrupted by various trends like emerging technologies, the commodification of knowledge, and outdated business models. But with the dramatic overnight changes in work and society caused by the coronavirus crisis, the disruptive transformation of the consulting industry will only accelerate. Remote work, lean budgets, and the need for contingency plans are three big trends impacting the industry.

You can look to history to see that mature industries become ripe for disruption as they age. Cable TV is a great recent example with dozens of disrupters like YouTube, Netflix, Amazon, Google, Apple, and others nipping at the heals of–and taking bigger and bigger bites out of–established players like Comcast. Netflix alone doubled its original growth forecast in the first quarter of 2020 thanks to the millions of people sheltering in place, adding 15 million paid subscribers. In the same three-month period, Comcast lost almost half a million video subscribers. The entertainment industry was already undergoing digital disruption. The Covid-19 discontinuity is accelerating it.

Consulting is a $250 billion behemoth global market. Even prior to Covid-19, market growth had all but screeched to a halt with growth estimates for 2020 at 0.5 percent in the U.S., far below other industries, according to IBISWorld research.

It makes sense: The consulting industry is plagued by a stagnant business model ill-suited for today’s innovation-driven digital world. Consulting is labor intensive, revenue is almost entirely based on billable hours, and most knowledge in the form of tools and templates have become commodities due to SlideShare and other platforms.

That said, here are three additional significant trends that are rapidly refacing the industry.

1. Consulting Services Stratification

Consultants are increasingly being pigeonholed as either “strategic” (and worth the high price) or basic “resources” for implementation (and not worth more than a modest hourly rate). The uncertainty unleashed by the pandemic reinforced that strategic thinking is needed more than ever, and clients will continue to pay top dollar for contingency planning, scenario planning, and business strategy.

But the days are numbered for implementation services and their armies of well-dressed consultants plunking down in cubicles at client’s headquarters for weeks and months on end. Even when implementation is needed, it will be seen as an increasing commodity–a pair of hands–with lower and lower margins, especially when work is done virtually.

Consulting margins and “value pricing” will follow the unsustainable economic model of the haves and the have-nots–the haves will be the strategic thinkers and the have-nots the pairs of hands. If you can get it on Upwork, why pay a consulting firm to do it for twice the price?

2. Digital Delivery

The rapid adoption of remote work and related technologies that occurred during the pandemic will stick. As a result, clients will demand their consultants and consulting firms shift delivery models to the digital world. Since remote work highlights gaps in work processes themselves, clients will require methodologies and work processes be delivered remotely through digital technology.

How do you digitize a robust, collaborative business strategy process for an executive team, for example? Or create a way to help an executive team build their key performance indicator dashboard?

Digital delivery must go far beyond video conferencing and collaboration tools– differentiation in consulting offerings will come from designing offerings based on emerging technologies like no-code software and artificial intelligence to creating new digital methodologies that transform clients’ fundamental work processes.

3. Scalable Business Models

The traditional big-firm consulting business model is based on “leverage.” Senior partners sell projects that are primarily delivered by junior consultants. The billable margins on those freshly minted MBA consultants are substantial, which adds to the bottom line and covers the salaries and bonuses of the top tier partners. The more you bill, the more you make.

That’s why armies of consultants are dispatched to cover consulting engagements. The bigger the army, the bigger the bill. In a post-pandemic world where clients expect digital delivery, firms that create repeatable, scalable best-practice processes that deliver value far beyond billable hours will win.

Traditional consulting frameworks, tools, and templates will continue to be commoditized through free resources found on the net. Individual consultants and consulting firms alike must build branded digital solutions that reinvent consulting, changing it from being a project on a Gantt chart to being a solution that persists (through a subscription) far after the “engagement” ends.

Pandemic or no pandemic, every industry will be disrupted at some point in the future–it’s just a matter of time. Consulting is ripe for the picking.

This article was originally published on and has been syndicated for this blog.

Soren Kaplan is the bestselling and award-winning author of Leapfrogging and The Invisible Advantage, an affiliated professor at USC’s Center for Effective Organizations, a former corporate executive, and a co-founder of UpBOARD. He has been recognized by the Thinkers50 as one of the world’s top keynote speakers and thought leaders in business strategy and innovation.