Here at Vault, we're putting the finishing touches on several of our signature annual publications, including the upcoming 2010 Guide to the Top 50 Management Consulting Firms.
Arguably, there is no industry sector that is more closely aligned with the fate of the broader economy than that of management consulting, nor any group of professionals who spend more time trying to figure out where the thing is headed and how to take advantage of it. Any lessons gleaned from leaders in that field, therefore, tend to extrapolate pretty easily to other sectors of the economy.
One of the most interesting pieces I've come across in recent weeks is this article in Consulting Magazine, which focuses on the likely effects of the $787 billion stimulus bill. Where the article gets really interesting, however, is in a sidebar interview with A.T. Kearney CEO Paul Laudicina, who takes the view that the stimulus bill is only part of a much wider societal and economic shift—one brought on in large part by the crisis that made the stimulus bill necessary. According to Laudicina, "To look at this as a surge in government would be too narrow a focus." That means, he says, that "the important focus is to step back and look at how this crisis…represents a fundamental realignment and transformation of what Peter Drucker called the 'Theory of Business.'"
Further, Laudicina raises the question that all business leaders in any industry segment should be asking themselves these days: "How do you sustain profitability in an era of decreased resources, increased population, and increased demand in a world with free, ready and open communication 24/7?" (Emphasis added).
Note that the four factors Laudicina identifies aren't temporary. They’re shifts in the paradigm that will forever affect business theory. They suggest a future where we as a society—and therefore we as members of a business community—get used to doing more with less. Shifts are already under way in the energy industry, as the race to provide sustainable sources for powering our future heats up, while the events currently taking place in Iran show not only the political problems that can arise from too much demand on a finite resource, but also the power and ease of communications in the modern era.
Gone are the days when corporations could rely on abundance—be it of oil, cheap labor, or customers with money to burn—to keep their costs down and profit margins up. Gone too is an era where bad business practices and a lack of corporate responsibility could be hidden from view. If one of the most repressive regimes on the planet can't contain dissent, what chance does a corporation have at being able to control a negative message in a free country?
Given that the future of business is likely to be affected by all of these factors, current business models and plans will have to be adjusted to take them into account. For the consulting industry, that's another reason to be looking forward to a bright future. What's good for the consulting industry, however, tends to be expensive for the companies that employ it. By taking early, independent steps to address the questions and issues raised by the likes of Laudicina, however, those costs can be mitigated or avoided entirely. That's one way all execs can start doing more with less.
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Phil Stott is a staff writer at Vault.com in New York. Originally from Scotland, he has also lived and worked in Japan, South Korea and Eastern Europe. He holds an MA in English Literature and Modern History, and a Masters in Research in Civil Engineering, both from the University of Dundee.
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