Future of Consulting - Interview with Barry Salzberg (Former Global CEO of Deloitte)
About two years ago I published a post called “[The Future of Consulting](https://www.linkedin.com/pulse/future-consulting-thoughts-how-industry-should-evolve-douglas-cole" Target=" Blank),” based on the experience of participating in a guest lecture at Columbia Business School. The professor, [Barry Salzberg](https://www.linkedin.com/pub/barry-salzberg/9/8b/a5" Target=" blank), who was also Global CEO of Deloitte at the time, had invited some colleagues and me to take part, and the post was a distillation of our contribution to the discussion.
I recently re-connected with Barry and asked him to reflect on the ongoing evolution of the consulting industry. His perspective is a unique one, based on his longstanding tenure at Deloitte, his full-time role at Columbia, and his board responsibilities.
How did you get into the consulting industry?
In fact my involvement in consulting has always been indirect. For the first half of my career I was in the tax advisory business, but in 2003 I was elected to the position of Managing Partner of Deloitte’s US business, which included Audit, Tax, and Consulting. I had a responsibility to lead the overall firm, including the Consulting practice, at a time when there had been discussions about separating it. My mandate was to integrate our Consulting business back into Deloitte, and to grow the Consulting business in a post-Sarbanes-Oxley era. I retired from my executive position at Deloitte in 2015, but I currently keep myself busy as a full-time academic and with Board-related responsibilities.
What are the most conspicuous changes you’re observing in the consulting industry today?
There are lots of interesting things happening in the consulting space, but let me highlight just three of them.
I would say the first thing has been the shift from strategy to implementation. Clients are looking for more than just good advice; they want their consulting partners to help make things happen. This includes bringing all sorts of new technologies, processes, and enablers to the table. Even the more traditional strategy firms are embracing this shift.
The second trend is an increased emphasis on specialization. Clients today are not nearly as open to generalist teams as they once were. They insist on industry-specific — indeed sub-industry-specific —expertise, as well as service line capabilities in supply chain, finance, or whatever. This is becoming more important as a basis for the client’s choice of a consulting partner.
Finally, there is the issue of talent and staffing, whether in terms of the types of people consulting firms are hiring, or whether in terms of the way engagements are staffed. Consulting firms are increasingly interested in hiring candidates from outside the traditional MBA generalist pool — doctors, engineers, technical specialists, for example. And whereas projects were once staffed largely with employees, there is now a much greater openness to freelancing elements on project teams.
The convergence of all these trends makes something ...what clients are looking for today.
Can you share any specific examples from the front lines – based on personal or second-hand experience – that illustrate a dramatic shift in the consulting paradigm?
The first thing that comes to mind is [McKinsey Solutions](http://www.mckinsey.com/solutions" target=" blank), whereby a traditional strategy firm now provides technology, proprietary data, and domain expertise to support high-stakes decisions. The emergence of McKinsey Solutions shows that while McKinsey continues to offer strategic advice as its mainstay, it also embraces the complementary strength of an implementation-oriented offering. Moreover, it’s clear that this offering is rooted in deep domain expertise. This makes eminent sense, as clients are putting more weight on the ability to help them get things done.
Another example comes to mind from a recent on-site visit to Deloitte. One of the Partners there said “we go to market with jeans and a suit.” He was getting at the fact that, alongside traditional strategy consultants, technology and digital specialists now form an integral part of the consulting team. These are very different types of thinkers, and they collaborate in close to real time on many consulting engagements today.
Extrapolating from the innovations you’ve observed, how do you envision the ‘consulting firm of the future’ – in, say, 10 to 20 years? What might the new operating model look like, and how might this re-define the ‘trusted advisor’ relationship with clients?
I would say the traditional talent model is moving from a pyramid to an hour glass. The traditional model was bottom-heavy, stacked with entry- to mid-level employees who performed the majority of the work. Given clients’ demand for greater specialization, however, I think we are going to see more of a top- and bottom-heavy staffing configuration. Clients will not be as willing to support a substructure of generalists, in effect. But they will be looking for senior advisors, and consulting firms will still rely on an entry-level community for analysis, apprenticeship, and implementation.
Thus, the middle of the pyramid will be hollowed out simply because the top of the pyramid will become more sought after, based on the need for deeper specialization, which tends to come with experience and age. And while the top will get wider the bottom will stay largely the same, based on the continued need for staffing leverage.
As this plays out, it won’t dramatically alter the trust-based nature of the consultant-client relationship. But that trust will have to be maintained through an adjustment to the consulting firm’s delivery model. If anything, I would say trust will become even more critical, since the consulting firm of the future will be called upon to perform a much wider range of tasks: advise, implement, operate, and so forth. Given the expanded scope of responsibility, trust will probably support the client-consultant relationship in a deeper way.
What is driving consulting firms to change now after years of being relatively immune to disruption?
The simple fact is that no industry is immune to disruption. It’s true that professional services have been slower than, say, the retail or telecom industries to feel the effects of disruption. But change is a constant, and everyone feels it eventually. I would say change is happening now in the consulting industry because of a confluence of factors — everything from rapid technology development to globalization to constricting budgetary parameters to evolving corporate buying strategies to the proliferation of data. I don’t see it as one overarching variable but rather many that have come together in a surprisingly short period of time.
It seems that one of the most obvious barriers to change within consulting is the partnership structure, which doesn’t always lend itself to innovation. Partners may agree in principle with the need for disruption but feel less than enthusiastic about, say, outsourcing a portion of their team’s work if this results in lower margins. Each partner is, after all, very much like an independent business owner within the firm. How can incentives be re-aligned to overcome institutional conservatism of this kind?
The biggest impediment is people, which is the case any time you have a conflict between a traditional and innovative way of doing things. Many people don’t like change. They see it as distracting or disempowering or both. But with the people who can visualize the future and imagine how they could be part of it, you start to see progress.
I teach a budget allocation case in my Columbia University course on consulting. One of the recommendations in the course is to invest in a plant outside the home country, based on an analysis of the risks of cannibalizing the home market. It’s often very difficult for some people to get their heads around this recommendation, because it is good for the company but not so good for individuals affiliated with the home office. Again, resistance to change is a universal phenomenon. But people have to get on with the show.
The good news, I think, is that consultants tend to be more adaptable than other corporate professionals. They usually have a comfortable relationship with ambiguity. This will help in re-orienting the consulting mindset as our industry adjusts to the new reality.
It’s already clear that the gig economy has changed the consulting landscape, with the growth of talent platforms and expert networks. Is the ‘Uberization’ of consulting inevitable? What will limit the impact of this particular trend?
I agree that the uberization of professional services is inevitable. But it’s about where this will happen over time. So far, crowdsourcing has been focused largely on staffing. That’s certainly the logical place to start, but it doesn’t yet amount to what I would consider a disruption of the consulting industry. As the uberization trend continues, however, I think we will begin to see situations where the crowd will become part of a more complex solution, one that involves new structures, frameworks, technologies, and so forth. We will start to move beyond the transactional services that currently prevail to a world that is, quite honestly, not easy to envision. I don’t think crowdsourcing will replace the traditional consulting firm entirely. Not by any means. But it will become an increasingly important component of the delivery model, creating more value than it currently does.
What would be your advice to people launching a career in consulting today? Should they be thinking about their career progression differently than they might have done in the past?
First, I would say expect to reinvent yourself every 4-5 years. This kind of flexibility is increasingly important, given today's pace of change. Second, I would say get some tech experience. The reality is that technology is vital to every industry, and whether you are doing advisory or implementation work, fluency in technology is now a table stakes competency in many areas. Finally, I would say specialize early. It isn’t that generalist skills are a thing of the past; only that, because clients demand domain knowledge, you need to be able to ramp up quickly in specific areas. In this sense, consultants today should try to optimize not only for particular expertise, but also for the speed with which they acquire them.
On a more personal note, where are you looking to make the greatest impact at this stage of your career?
I’ve had 38 years of business experience, and I worked very hard to drive the success of Deloitte in particular. Now it’s about having the opportunity, the flexibility, and the platform to help others. I enjoy helping students become future leaders, helping early stage companies build a platform for their success, and helping public companies compete in an increasingly turbulent environment. It jazzes me to be able to help pay it back and see immediate returns on the investment of my time.
In a somewhat self-interested way, I’ve concluded that to stay young you need to surround yourself with the young. There is no better way to maintain your energy level than through the eyes of youth.
Note: The above article is a re-published with permission from the author