Many managers in traditional product-oriented organizations are struggling to turn their companies into solutions-oriented businesses, widely considered the route to success in the 21st century. A good shortcut may be to establish corporate consultancies — consulting units that offer customers solutions based on the traditional business’s products or expertise. Thus computer companies such as IBM are moving toward integrated information-technology solutions, and telecom-equipment manufacturers such as Nokia are providing turnkey network solutions.
Changing from a product-oriented manufacturer to a customer-focused solutions provider can be rewarding, but because it involves a sweeping reorientation of the organization, it is also difficult. That’s why the less radical approach of a consultative component often works best.
But even that strategy has its challenges, with success depending on determined managers who know what the pitfalls are and how to avoid them. Without firm management, the consultancy may be swept away by forces that draw it too far into the product business or too far away from it.
By thinking through the mission, identity and structure challenges and choosing the right strategy for handling them, leaders can both manage the consultative component and attain synergies between the product-centric business and the corporate consultancy’s customer solutions.
The Three Challenges of Corporate Consulting
Acknowledgments
The authors wish to express their gratitude to Andrew Davies, Richard Normann, Abraham B. (Rami) Shani and Bengt Stymne for comments on earlier versions of the article. They also would like to thank the executives who participated in the research project.
1 Comment On: The Three Challenges of Corporate Consulting
I’ve always been intrigued by Porsche’s consulting arm. The company as a sports car manufacturer certainly has some benefit to lend as a consulting firm, but it’s got to be difficult to maintain the edge in processes using as consultants reconciled with what the company is doing currently. I would imagine there’s some disconnect and perhaps some loss of focus by establishing a consulting arm of a successful corporation like Porsche AG.