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Most people feel very comfortable wrapped in the corporate cotton wool of full-time employment under the leadership of others. Their company brand is what represents them and they are proud to be one small cog in something much bigger.
But an increasing number of professionals prefer to live without the corporate family and the notion of having their year ahead determined by others. They are the independent consultants who perish the thought of getting paid a fraction of what another company has sold them for. They are the independent consultants who have learned to successfully blend their core capabilities with a strong dose of entrepreneurial spirit and independence to write their own success and failure stories and steer their own journeys. I’m one of those, and have been since the 1990s.
Phantom ex Machina
Back in 2015, out of the blue I got a tweet from Rod Schatz, who I didn’t know at the time, but he was one of my twenty thousand or so followers on Twitter. Rod wanted to know if I’d like to be involved in a new book called, “Phantom Ex Machina – Digital Disruption’s Role in Business Model Transformation”, which he, Anshuman Khare, and Brian Stewart had embarked upon.
At the time I was up to my neck in transformation, but the idea of writing just one chapter in a book was palatable, so I agreed and quickly decided to write about how the digital economy is transforming the world of consulting. I was inspired by the well-known Harvard article from Clayton Christensen, Dina Wang, and Derek van Bever, called “Consulting on the Cusp of Disruption” which I’d read back in 2013. Clay, Dina and Derek had explained how the management consulting industry that has long helped others sidestep strategic threats, was now being turned on its head.
Expert360 Casy Study
I wanted to use a case study in my chapter of the book, but I wanted something new, fresh, and with information that came straight from the horse’s mouth so to speak. So after a few hours of research I stumbled upon a company that I’d heard about before, but never paid much attention to. That company was Expert360.
Expert360 is an online platform connecting client companies with consultants who can provide external capability, capacity, or expertise.
I zoned in on co-founders Bridget Loudon and Emily Yue, and the following week was on a Skype call with Bridget the CEO, to understand how and why two bright young Bain consultants jumped ship to max out their credit cards in a gutsy attempt to make a humble dent in the dusty old-boys-club world of management consulting.
SpaceX and Consulting
During our video chat, Bridget told me how she had read about the SpaceX venture, and how Elon Musk learned that the raw materials which go into a rocket only account for about 3% of the costs, and how he felt he could make a much cheaper rocket.
Bridget and Emily also capitalised on this concept. With the raw materials in the management consulting industry being smart business professionals, they simply rearranged the parts and created a business model that increased the reach, access, and choice in the management consulting industry.
Platform Business Models and Exponential Numbers
As Alex Moazed and Nick Johnson explain in their book “Modern Monopolies“, although the idea of the Platform business model may be simple, the implications for conventional businesses are colossal. Expert360 is simply another company that has embraced the platform model’s potential and followed in the wake of Apple, Google, Facebook, Uber and Alibaba, etc.
While Uber connects drivers with passengers, Expert360 connects independent consultants with companies – but they both do it with exponential potential using the platform business model. A model that poses a threat to every company out there, which not only fails to digitise, but which also fails to adopt a platform model.
In just three years, Expert360 can offer over 10,000 high calibre independent consultants to over 2,500 customers in 87 countries. Can you imagine how long it would have taken an old bricks and mortar style consulting firm to scale at such a phenomenal rate?
Delivering Business Value Through Digital
While thousands of companies are adopting digital technologies, the most that many are achieving is a technology upgrade. While transformation is their goal, change is as good as it gets in reality. They proceed without understanding that while change fixes the past, transformation creates the future, and they lull themselves into a false sense of transformation security.
Expert360 has transformed the traditional yet ageing management consulting model through the adoption of the platform, which is enabled by digital technology and a digital workforce. In fact when I spoke with Bridget back in March 2016, she told me that 40% of her company’s employees were “technical” and focused on how digital can be used more extensively to provide increasing levels of value to their consultants and clients.
It’s important to recognise Expert360’s focus on using digital to deliver value, and to transform an old business model. Bridget and her team are not simply implementing technology to keep up with SMAC trends. They are exploiting technology for pure business reasons, and not for technology’s sake.
Management Consulting From 1886 to 2016
Since 1886 when the consulting firm Arthur D. Little was founded in Massachusetts, the management consulting business has evolved considerably, with McKinsey & Company now considered by many to be the world’s most prestigious among them.
But as Christensen and his crew suggested back in October 2013, consulting was already on the cusp of disruption and Expert360’s digital business model is just one of thousands that are eating into the profits of incumbents. Fintech firms are doing the same to banks and the likes of Betterment are siphoning off profits from complacent wealth management companies at a phenomenal rate. All because they understand how to leverage the full potential of digital business, and not simply plug in new technology without being able to measure the new business value it generates.
Executives anticipating moderate to massive digital disruption in next 12 months
Steven Kotler’s Six D’s of Exponential Technology have well and truly gotten their teeth into the management consulting industry.
Digitised Consulting on Any Scale
The beauty of digital business transformation is that any business in any industry and of any size can embrace it and thrive in the digital economy. While Bridget and Emily elected to go all out and raise millions to scale up, there are thousands of entrepreneurial independent consultants that are also leveraging technology to steal some of the profits away from large consulting firms.
Take me for example. Since 1997 I’ve gone out onto client sites around the world and delivered my consulting services to firms like Unilever, DHL, SAP and others. But like any consultant, I can only physically be with one client at any one time.
Now with a selection of inexpensive digital tools that power my business processes, along with some innovative thinking, I sell my consulting expertise seven days a week to customers all around the world at any time of day. I haven’t yet retired my trusty old business model, but now I have a new digital revenue channel, which is well on its way to being on par, and one day outperforming my old business model. It’s a model that is fit for the digital economy and is something I could not possibly have achieved just a few years ago. Don’t get me wrong, it has taken a LOT of hard work and mistakes, but it’s not that complex when you have learned what works and what doesn’t.
In the way that many companies of all sizes are failing to genuinely transform, many independent consultants are still stuck in the past and not exploiting the tools that can enable them to transform their own small business. A bit of sharing and caring on LinkedIn is about as digital as it gets for many, but that’s not nearly enough.
Digital Revenue Channels
The world is full of people participating in the digital economy. They spend more and more of their income on digital toys, and feel very digital. But most are only investing their time and money in the digital economy or helping other companies generate profits from it. Only the minority have learned how to extract revenue from the digital economy themselves.
Digitised consultants have already identified how to transform or even cannibalise their old business models and extract profits from the digital economy. And the best part is that they can do it with very little money and with virtually no technical skills.
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