Francois Kriel, Management Consultant and Director at Kriel & Co
In particular, consultants specialising in change management, digital transformation and related operational expertise are in the best position right now to support leadership teams.
Historically, management consultants by their very nature have been trusted by leaders of organisations to offer insights, recommendations and strategies based on objective data to help the organisation move forward. Management consultants also help navigate blind spots during journeys where organisations are often travelling full-speed on what resembles an Autobahn – a highway which bears no limit to the speed that travellers may reach.
I think it is safe to say we are finding ourselves in the middle of this limitless space. With challenging economic conditions as a direct result of one of the largest health pandemics the world had ever seen, executives are increasingly finding themselves in crisis-management mode to keep organisations and teams adjusting forward, and adapting to ‘business in the new normal’.
It’s not hard to realise that organisations, and especially SMEs, by an overwhelming majority have taken some of the hardest knocks. They are relying on their safety systems now more than ever before to manage the many curvy bends on the long road to economic recovery.Cash-strapped reality for organisations
At the onset of the lockdown Statistics South Africa acted fast to understand the impact on a business level. They polled 707 businesses in the formal sector to get an idea of how the current crisis has affected businesses from 30 March to 13 April, the two-week period at the onset of the lockdown. The bleak results were released shortly thereafter and serve as a good benchmark that is now a downward trend in sentiment and a stark reality for countless organisations.
The report showed that five out of six businesses surveyed had a drop in turnover while 85,4% of respondents reported worrying turnover below the normal range. The largest hit was the construction, real estate and other business services, as well as transport industries. More concerning were the 42,2% of respondents who indicated that they do not have confidence that they will be able to continue to operate through the pandemic due to dwindling financial resources. Over half of the respondents said that without turnover they can survive between one and three months.
This is bleak. And the outlook curves further downward as the weeks are progressing.A growing gig economy
While management consultants can admit that the scale for the type of work performed is most definitely tipped in the consultant’s favour, it is at this exact tipping point where we must consider the changing nature of our own landscape. It is not only within organisations where the winds of change can lead to better outcomes, but it is to our benefit to separate the wheat from the chaff within the management consulting industry when times are indeed changing for our own industry too.
A majority of organisations across industries such as tourism, health, financial, transportation and right through to consumer services are employing cost-cutting measures according to a simple equation. They are adapting business models to favour the delivery of services and products that bring the most value and save the most money.
It is brutal. Out with any clutter that does not turn to profit, while keeping or adopting any service offering that provides value in the short or long term.
Professionals may the need to adapt their own way of working to stay relevant, diversify income streams and offer real value. Is a gig economy approach the solution to adding value to the professional skill of navigating organisational change?
By nature, gig economy workers benefit from increased flexibility, the ability to choose projects that best align with their goals and interests, and the ability to earn income from multiple sources.
On the other hand, one obvious benefit to organisations is the ability to save costs by contracting talent to fulfil needs rather than employing full-time professionals. For instance, the average annual salary of a CIO is R1,220,180. Organisations can also avoid the costs and often lengthy-time period associated with the hiring process. Instead, companies can engage with a curated team consisting of the right people with the right skills for today’s project, right now, without having to worry about the long-term fit and HR impact.
Change management consultants as gig economy professionals are able to steer the organisation through these winding roads where side impact is a reality at every turn, and leadership is required to keep their eye on the road at all time to pre-empt change.
Widely adopting a gig economy for professionals may also dramatically change how company structures are arranged all together.How cheap is talk really?
The dizzying pace of digital transformation in the 21st Century established a lasting trend where organisational adaptation of new technology is here to stay. The consulting industry was ripe for disruption well before the onset of a global health pandemic. But traditional strategy consulting and the associated fees that come with the service have increasingly been pulled into question in recent years.
Case in point is the questionable trend which has seen traditional consulting firms profiting from significant contracts but at the same time shying away from accountability when things go awry. There is the example of a prestigious US-based management consulting firm’s refusal to fully accept responsibility for its role in State Capture during its consulting engagements with Transnet and Eskom, which resulted in a long-lasting negative impact on the country’s economy and on its society. Another example is another competing firm who were alleged to be complicit in damaging the South African Revenue Service (SARS).
The perception that these large firms are not willing to display accountability for their ‘costly advice’ and in some cases also benefited from fees associated with devious risk objective setting is something many organisations cannot afford to risk right now.
During a time when the balance between profit and people is at the forefront, the risk exists for the traditional approach to management consulting to become obsolete when they – for one – seem simply too costly right now – and secondly – when they don’t appear to objectively align with the best interest of the organisation and the broad definition of stakeholders in which these organisations operate, that the rise of the gig economy for professionals has come just at the right time.
The gig economy has forced the new breed of millennial professional to adapt their value propositions that resonate with organisations now more than ever. Management consultants with a formidable and proven network of professional services spanning IT, HR and OD and digital leadership capabilities have the potential to become the designated driver to oversee the safety of organisations travelling full speed ahead.