“The Innovators Dilemma” for a Consultancy Company

okt 18, 2015

“Disruptive Technologies”, “The Service Economy” and “The Innovators Dilemma”

As owner, founder and entrepreneur, I have for over 30 years led a highly successful international consultancy company, with a turnover of 15 million euros per year. We developed with and for our customers the appropriate (business) vision, strategy, process, IT-architectures, including migration- and implementation plans.  If required, we assumed responsibility for the program/project management for the actual implementation. To ensure, the project predefined goals and value-added were realized, we worked under a “Process Obligation” (halfway between an effort and result-obligation). However, the Consultancy world is drastically changing today.

The emergence of new “Disruptive Technologies” in conjunction with the emergence of the “Service Economy” made it (against expectations) extremely difficult to implement the changes, as outlined below, within my existing successful consultancy company. This because the existing business demanded too much time and energy, to allow me to think and work ahead on creating a new future proof consultancy business. A classic “The Innovators Dilemma”. This dilemma motivated me to completely transfer my existing business to new management and owners.

Consequently, I made a start from scratch creating a new, fully autonomous, well-connected, networked top consultancy boutique (with a size of approx. 10 fte). This consultancy boutique is supported by a strong and diverse community, in terms of highly engaged (potential) customers, employees, product & service developers, researchers and supporters. For acquisition and staffing (“Staffing-on-Demand”) we intend to make maximum use of this community.

We set the bar very high. We dare to dream and have defined a challenging and promising mission:

The new firm, Mabs4.0, aims to set the future standard for “world class” IT consultancy in the BENELUX (Belgium, Netherlands, Luxembourg) and the DACH (Germany, Austria, Swiss) countries. We will work together with trusted partners to unlock specialized knowledge. If required by the client, we will take the full program / project responsibility for the implementation of our recommendations and plans.

In the past, we have learned that the fastest way to change, is to pretend you are already there. This approach brings you fast as lightning to where you want to be. Our culture is mainly built on what we do and less on what we say! Exemplary behavior is of great importance. In particular, we show guts, because “success is not for cowards!”. Few entrepreneurs in the consultancy world have gone as far as us, with regards to “The Innovators Dilemma”.

Currently we do also projects for small IT start-ups, viable, with exponential growth potential, strongly services oriented (outside-in), highly adaptive, well-connected and well-networked, where the customer is part of the operations processes. Our Mabs4.0 business models range from time-material, fixed project price, revenue-sharing, to co-investments (shares and/or loans) or combinations, with maximal focus on sharing risks with the start-up companies.

The changing world as context for the “Future Consultancy Company”: the “Red Queen Hypothesis or Race”

The (exponential) world of new business today is a totally different world. It is a world of connected devices, business models and companies. An internet year lasts for three months only. Exponential developments follow each other very quickly. The linear organization seems to be obsolete. Primary focus is on the value proposition and not on profit. Business cases become value cases. The alignment of IT and business has evolved to business = ICT & ICT = business and has now further evolved to business = data & data = business.

Consumers adopt to these exponential developments faster than companies. They connect, they form “networked communities” allowing them to quickly share information and to organize themselves into powerful “interest groups”. Companies should be much more open to consumer needs and questions if they want to survive.

This fourth industrial revolution leads to a Service Economy, the growth in developed economies will mainly come from services. Services cannot be developed in isolation, such as products. Services originate in co-creation with the clients and are interdependent with larger service networks and clusters. Services are complex and with the explicit introduction of customers into the operation a variety is created which is difficult to plan. Organizations have to change, they need to find ways to adapt to increasing volumes, speed and variety. Starting at the edges of the organization, where people and systems interact directly with customers, partners and suppliers. These adjustments are the beginning of the new networked and connected organization (“The Connected Company”)!

Structural change is needed. In the past growth and evolution have led to increasing specialization in organizations (“efficiency”). However this specialization limits the adaptive power of an organization. When an organization operates at or near its peak effectiveness, and the operating environment changes, the organization must also undergo fundamental structural change and has to become adaptive within a network (“flexibility” is more important than “efficiency”).

This new networked economy creates an ambiguous, insecure, highly competitive landscape. Companies should be flexible enough to respond quickly to changes in their environment, or they risk elimination. You can only change if you are on the move, you have to continue running to keep up with your customers. In doing so, companies maximize their adaptive capacity. Generally not the fittest companies will survive, but especially the most adaptive one (“Red Queen Hypothesis or Race”). “Survival of the fittest” has changed into “survival of the most adaptive”. To adapt, companies must act as learning organisms, purposefully interacting with their environment and continuously improving, based on experiments and customer feedback. In addition, Promise (what we promise the customer), Purpose (what the customer wants) and Performance (what we do) will become in balance with each other!

Conclusion: Consultancy will never be the same!

This blog is number four in a series of seven. In this series of blogs about “Future Consultancy” appeared previously: