Why networks of independent consultants can benefit consulting firms

19 April 2018 Authored by Consultancy.uk

In the well-known Harvard Business Review article ‘Consulting on the Cusp of Disruption’, penned in 2013 by former McKinsey partner Clayton Christensen, among others, the authors spelled out the end of management consulting as we know it. One of the putative drivers of the forecasted disruption is that, with the undeniable shift towards the ‘gig economy’ at all levels including white collar workers, independent consultants would gradually take over. That model was forecast to chase the big consultancies away from their mainstream business, and client firms to review their ongoing relationships.

In the slipstream of the financial crisis, with client demands in state of flux and consulting growth under pressure, partners of consultancies have been pointing to the gig economy as a source of strong competition for years. In 2016, a study by Consultancy.uk conducted among 150+ CEO’s and Managing Directors of consulting firms found that one third saw the rise of independent consultants as their top concern, regarding the business model of their consultancy. They also feared that independents would eat into their market share, and about downwards pressure freelancers have on fees, along with the damage such freelancers could do to the reputation of the industry, which does not have a protected status, as a whole.

Yet according to Olivier van Calster, the CEO of Talmix, with over 40,000 global independent consultants in its network the globe’s largest top-tier freelance network, the threat of independents to consultants has not materialised in the way which was pictured back then. “In a surprising twist, at Talmix, we have actually found that it’s becoming evident that independent consultants support and complement traditional firms. And when clients engage with them directly, they can still be seen to offer a complementary and valuable service which improves quality of experience from the original engagement.”

Networks of independent consultants can benefit consulting firms

Talmix’s Chief Executive is also keen to stress that the independent consultants network is fundamentally not competing with consultancies. While Talmix typically focuses on sole independent and interim roles, this type of staffing is not the core business of the higher-end consulting firms, which focus on staffing of consulting teams. Moreover, Talmix’s network is aimed at helping consultancies improve their success rate, or offering a complementary service to end clients. Key to this offering are the three central themes of specialist knowledge, flexibility and rapid turn-around – all aspects that have enabled independent consultants to thrive in the 21st century gig economy.

Partnering with consulting firms

While most attention goes to the client matching business of players such as Talmix (i.e. matching clients with independent consultant), one aspect commonly in the shadow but generating a significant portion of revenue is working together with consulting firms. Just like corporate clients, consultancies also use the network’s marketplace to add much-needed capacity and expertise to their projects. “Management consultancies work with Talmix as long-term partners; and now represent a third of our business globally,” explained Van Calster.

Talmix’s CEO added that there are two main reasons why consutlancies would plug-in into Talmix’s database. First, the platform allows for “elastic sourcing” – a flexible bench of consultants which can be resourced according to the volume of work rather than having permanent consultants on the payroll. Van Calster explained that this allows for “stretching a company’s teams to the size that's needed to fulfil new work, but bouncing back to normal size when those assignments aren't active.”

In the group’s 40,000-strong network lies knowledge that can drill down to the most specialised requirement, an invaluable commodity in the consultancy scenario when deep expertise is required, but not on an always-on basis. Talmix’s database also includes consultants who have matured in the world's most well-known firms, holding with the skills and background to make them a “great resource in any firm”. As well as providing an assurance of consulting know-how in this aspect, Van Calster’s second point is that the platform allows for “specialised augmentation” – adding to the core team with relevant specialists to demonstrate an in-depth understanding of a client’s situation.

The industrial pedigree demonstrated by many members of Talmix’s consulting coral shows it is not just the boutique houses and smaller consultancies that are making use of matchmaking databases. Similarly to a few rival networks, Talmix’s database is tapped by a broad church of consultancies in every shape and size. Van Calster elaborated, “We see interest across the board: the mid-sized, established consultancies who like the access to independents with great resumes and solid backgrounds, but also from the most prestigious global strategy houses where we are building partnerships on both regional and global bases.”

Management consultancies work with Talmix as long-term partners; and now represent a third of our business globally.

Further to this, players such as Talmix specialise in finding the right consultant quickly, and boast innovative software to quickly match the right skills to the demand. Thanks to this blend of a deep talent pool and sturdy technological foundations, the network is building a reputation as a top matchmaker. Subsequently, one partner at a mid-sized consulting firm once told Van Calster, “Talmix is getting to be known as the go-to provider of specialist external resource for us”.

Alumni networks

Another reason why consulting firms are increasingly eyeing partnering with independent consultant networks is because of the assets they boast for their alumni networks. After having cut their teeth in the industry with larger firms, many consultants go independent not to sever links with consultancy entirely, but rather to balance their consulting skills with opportunities to develop their own business. As a result, many alumni who are well versed in the working practices of consulting firms also have specialised talents, which their former firms would do well to call upon on an interim basis.

According to Van Calster, these skilled, trained consultants who have also specialised in certain sectors and functional skills, or entered work in new regions, make Talmix increasingly attractive to large firms. He said, “Coming to the home of independent business talent means consultants keep their work options open, while pursuing these different, independent avenues. And it means that those alumni are now accessible to their former employers in one place.”

He also highlighted that Talmix now works with consultancies to create mini-networks, or talent pools, to deliver both alumni and similar profiles instantly. This is also helpful as after 3-5 years, many independents consider returning to formal employment, meaning consulting firms which foster working relationships with them in the interim will likely be their first port of call when they look to return to life at a firm.

Van Calster concluded, “Despite the challenging predictions from ‘Consulting on the Cusp’, the reality is that consultancies are embracing different models, and finding ways to use freelance talent to their advantage. And in the end that forward thinking is going to deliver a better service to clients, and flex capacity to suit the flow of business. It’s not so much as the end of consulting as we know it, but the future of consulting as we want it.”

Related: Four reasons independent consultants are happy with their career choice.

News

More news on