There is an adage in business that says that you win in the turns. When there are big shifts happening in the market, the most successful companies are those which possess the capacity to spot change and leap ahead when it occurs. For consulting and business advisory firms, the same is true, as the operating model needs to move in line with these changes.
The use of consulting firms has been prevalent since the early 1900s and many firms can trace their routes. Businesses have traditionally sought external advice and support for a range of critical issues from strategy to accounting and advisory services.
The years following the financial crisis of 2008, however, ushered in a new era that made organisations revisit how they were conducting business. The GCC region was specifically affected most notably by economic events such as the drop in oil prices. Several gaps in business controls and processes were exposed, with many organisations using this opportunity to put in place new policies and procedures to tighten up their infrastructure and address such risks. At the same time, businesses became more sophisticated and demanded a higher degree of involvement and greater accountability from their consultants.
Organisations are now taking a harder look at not just what they are doing, but how they can accomplish their goals in the light of current market and demand pressures, managing tough stakeholder expectations and a competitive environment. Specifically, they are looking at achieving operational and internal business efficiencies, combined with balance sheet restructuring, smarter sales and marketing efforts by getting closer to the customers and their behaviour.
And that brings us to the core of this article — what is the winning formula for consultants when conditions change? The broad message is exactly what the evolutionary theory states. It is neither the strongest species that survives, nor the most intelligent. Rather, it is the one that is most adaptable to change.
As businesses have borne the impact of historical significance, they have taken a fresh look at how they benefit from the use of their advisers. They no longer want consultants or advisers who merely make recommendations: they want experts who are capable of implementing their own recommendations, as well as being an integral part of the core team that sees the implementation through to a successful outcome. In practical terms, this means consultants have to work harder to stay relevant to their clients.
Further, when it comes to this market, advisers have the additional responsibility of implementing tighter controls and leading practices around core business processes, such as cash, governance, business continuity, geopolitical developments and risk mitigation — areas which have historically been less in focus.
Organisations today are thus increasingly asking themselves pertinent questions during transformation, in terms of their resources and capability. They are looking within to check if they have the right people to carry them through, while also planning ahead for the next phase of their development to be lean and efficient. Today, advisers are also well equipped to deploy and optimise use of technologies such as artificial intelligence, robotics, and data analytics to make processes quick and more efficient, and drive down costs as much as possible. As new technology is rapidly taking over routine and mechanical activities, advisers will now be expected to focus more on critical thinking, analysis, anticipating change and developing adequate methodologies and approaches — practices that were traditionally left to the experienced few.
In a bid to become leaner and more efficient, cost optimisation also plays an important role. But while it may be easy to cut down unnecessary costs, it is crucial that quality and productivity are not compromised. Another component of optimisation is unlocking cash from working capital expenditure, efficient supply chain management and the like. While much of this seems obvious and is often covered within the initial 100-day plan for a business, in today’s world, this type of plan is being replaced by the 1,000-day plan — signalling the need for ongoing performance improvement and a longer term, value-creation outlook.
Advisors may be privy to providing solutions for these matters, but their roles have expanded to more than a textbook definition of a consultant. Clients today want more than just financial expertise. They want those who have a strong track record of delivering measurable dollar value through hands-on, thorough and broad implementation support — the key ingredient in the recipe for creating success.
Raj Mehta is a Partner who leads KPMG Lower Gulf Performance Improvement initiative.