While we were recovering from our turkey-induced slumbers, we read the
What’s next for Monitor and Michael Porter?
shocking news that Michael Porter’s Monitor Group has filed for bankruptcy, and is being acquired by Delloitte .
The best coverage of this story has been by Steve Denning, and we encourage you to read his articles here and here. The Economist also has an interesting, albeit somewhat superficial, take on the situation.
Perhaps the most disturbing comment (for us at least) was this one:
In this world, Monitor’s value proposition of a supposed sustainable competitive advantage achieved by studying the numbers and the existing structure of the industry became increasingly implausible and irrelevant. Its consultants were not people with deep experience in understanding what customers might want or what is involved in actually making things or delivering services in particular industries or how to innovate and create new value.
This is a real wake up call for consultancies that focus on the “10,000 foot view” and not on the downstream, operational considerations. If anything, this speaks to the need for consultancies (ours included) to really focus on:
Operational Issues and Processes – This is precisely why we view business development as a process. Yes, there is a need for an overarching BD strategy that’s linked to corporate strategy. But a BD strategy without a clearly defined, tactically-rich process (and accompanying financial models) is pointless.
Grey Hairs – The days of consultancies building their firms on the back of newly-minted MBAs are likely coming to an end. This is especially true when there are so many highly experienced, former senior-level executives available to work on a consulting basis (cf., LinkedIn). Yes there will always be a need for number-crunching, presentations, and writing and many senior executives of a certain vintage prefer to have the number crunching done by others. But if you’re a CEO, who would you rather have advise you, an MBA with 5 years experience, or a former CEO from another company who faced similar problems? Better still, that CEO can out-source much of that work at minimal cost, and have a top-quality deliverable and advice without building a consulting empire.
Focus, Focus, Focus – In our line of work, we come across consultancies of many sizes who attempt to enter into new lines of consulting (such as business development) without the prerequisite experience. We’ve heard stories of senior executives retaining these firms based more so on their overall reputation, and not on their prowess in that particular discipline. In fact, at BIO Europe, we met with a CEO who had to fire a strategy consulting that was performing poorly on a licensing engagement. If anything, we blame the CEO for hiring the wrong firm in the first place!
Our focus happens to be business development, and the corresponding activities related to that discipline. If we need assistance in other disciplines, such as clinical development, we bring other consultants into a project on an as-needed basis (and fully transparent to the client). We do this because it’s in the best interest of our client. We’re not wedded to a particular framework or template. Rather, we tailor our projects to the needs of the client, and not the other way around (cf., Monitor).
We think we’re already seeing the day in which companies will have a portfolio of consultants (individuals, small shops, and large shops) at their disposal, each of which will have expertise in very specific areas. Depth of expertise and experience will come at the expense of consultancies who have recognized brand names, but lack the depth of experience in key areas.
Markets, including the pharmaceutical/biotech markets, are changing remarkably quickly. Consulting firms, especially the branded ones we’ve all heard of, should take special care to transform their business models in order to keep up with these rapid changes. Else, they may find themselves following Dr. Porter back to school.