Consultants and agencies in an 'arms race' as industry boundaries blur

17 July 2018 Consultancy.uk

Consulting firms and design agencies are converging into a common industrial arena, according to the statements of IBM iX executive Matt Candy. Speaking at an event to celebrate a quarter century of the Worshipful Company of Management Consultants, Candy said that the lines between the two were now likely to blur, as an “arms race” ensues between the two sectors.

The Worshipful Company of Management Consultants is a Livery Company based in the City of London, which has helped to shape the consulting culture of the municipality for the past 25 years. Now, as it prepares to support the industry through a period of uncertainty and disruption, the group has hosted a dinner to bring together the City’s industry heads in order to share best practices, and support valuable charity work.

The event, which took place at the Honourable Artillery Company in London, was addressed by Matt Candy, Global Leader of digital agency IBM iX, who addressed challenges to the industry and how they may shape the future consultancy profession, while Immediate Past Lord Mayor of London, Alderman Sir Andrew Parmley, would later join proceedings to reflect on the contribution made by the Worshipful Company to the Civic City in light of his 35 years’ involvement in the City.

Matt Candy and David Johnson

Candy used the opportunity to address one of the key trends of modern consulting; the increasing clash between the consulting industry and digital design agencies. Amid an age of disruption, designers are thought by consultants to be at the heart of many solutions for business problems of the future, and as such Candy anticipated that the boundaries between management consultancies and digital agencies is likely to shift, blur and eventually disappear.

In line with this, in what Candy termed an “arms race to fill the skills gap” created by the digital revolution, top consulting firms broke out multi-million war chests last year in order to fulfil targeted acquisition campaigns in the design space during 2017. This saw the MBB strategy firms and the Big Four of the professional services world quickly building digital arms, alongside Accenture which made the most notable spend of $1.2 billion.

Candy, elaborated, “Standalone strategy is no longer sufficient – it now needs to be accompanied by creating and making, such that clients can touch and feel solutions, not just hear about what they could have. In consulting, we didn’t possess the storytellers, the artists, the creators and the makers.”

In terms of the agency world, Candy added that due to this trend, the sector had been forced to start to build consulting skills. This has already been exemplified by the beefing up of advertising giant WPP’s recently unified advisory organ, Kantar Consulting. Speaking at the time of its consolidation, Phil Smiley, Kantar Consulting’s CEO, had commented, “We live in a new era of consumption. Growth can no longer be assumed, yet there are more, not fewer, opportunities to build breakout brands and new lines of business. Future growth exists, but beyond the comfort zone of most organisations; it is more granular, less siloed and more opportunistic.”

Now, as design firms move toward possessing organisational change experts, process skills, and deeper technology skills, while consulting firms likewise move into the design sphere, Candy said that companies like his, IBM iX, were emerging as a fusion of consultancy and agency strengths, helping clients reinvent their business via design. He added, “Design Thinking is the science of the 21st century.”

Following on from Candy, the Worshipful Company of Management Consultants’ incumbent Master, David Johnson concurred, “We are seeing a vast amount of disruption in the world and this is being reflected in our industry… Consultancies will need to reshape their businesses to ensure they remain the disruptors and not the disrupted.  But they must not lose sight of the ethical foundations which underpin the profession and are equally vital to its future.”

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Accenture's push into the creative sector is an identity crisis

18 April 2019 Consultancy.uk

In its latest push into the creative sector, Accenture Interactive acquired New York and London-based ad agency Droga5 earlier this month, adding illustrious clients such as HBO, Amazon and The New York Times to its roster of clients. With the latest in a long line of similar purchases, Accenture Interactive further demonstrated its ambition of becoming the globe’s leading trusted advisor to chief marketing officers. Yet according to Ben Langdon, Chairman of Class35, Accenture’s strategy may be heading in the wrong direction.

A press release on Accenture’s website announcing the acquisition sits next to a quote stating that “brands aren’t built through advertising” – a huge contradiction from a consultancy firm hell-bent on becoming the ‘CMO agency of choice’. It’s not alone of course. The entire consulting industry wants a piece of the creative pie right now. In addition to Accenture Interactive, recent acquisitions by PwC Digital, IBM iX, and Deloitte Digital meant that in 2017, for the first time ever, four of the world’s ten largest creative agencies were consultancies.

So just what it is that Accenture wants to achieve from this? For one thing, it’s clearly trying to be a digital transformation business. A one-stop creative shop rivalling more traditional models, it wants to lure CMOs in with the promise of lower ad spend and a “more impactful customer experience”. At the same time, though, it’s still in thrall to those same slinky, shiny branding and advertising agencies it’s attempting to disrupt. The Droga5 acquisition and that of Karmarama a few years before are both testament to this.

There’s a fundamental problem with this, though. Digital transformation businesses don’t sell to CMOs. These people have enough on their plates trying to transform their own marketing skills in order to keep up with an ever-changing market – they just don’t have the time or the energy to concern themselves with digitally transforming a whole business. If Accenture’s purpose is digital transformation, then going after creative agencies is barking up the wrong tree.Is Accenture's push into the creative sector an identity crisis?

Worlds apart

Perhaps more importantly, these two industries are worlds apart in terms of the way they think. Creative agencies are all about ideas, campaigns and consumers. Digital businesses, on the other hand, are customer-driven – they think in terms such as lifetime value, measurement, and efficiency. Customer-led thinking is an entirely different beast to consumer-led thinking.

The reality is that the arrival of digital and an all-encompassing obsession with technology, measurement and social has led to the death of agencies in a reductive, zero-sum, efficiency-focused battle with brands. Indeed, agencies have become so obsessed with the latest tech fads, they’re beginning to forget how brands work. Worse still, they’re beginning to forget how brands are built. And, by forgetting, they’re destroying their own values.

Killing creativity

All things considered, it really feels to me as though Accenture is a chip leader in a game it doesn’t understand. Expensive acquisitions like these show that they’ve got the big money, but they don’t appear to have any idea what they’re doing with it. Take talent, for example. The best talent in the creative industry right now is out in the market; it’s not tied to any one agency. Both agencies might well be at the top of their game, but why would a consulting firm waste so much money on buying them when they could hire high-quality creative talent on a contingent basis instead?

As their presence in the top 10 creative agencies shows, there is a growing trend in which Accenture, like many of the other big players, are buying up agencies as if they were nothing more than keywords. What they’re really buying, though, is a collection of credentials, clients and IP. Unfortunately, the talent that created those credentials aren’t going to stay at the business, the clients that hired the agency in the first place won’t be interested in buying what is basically just another part of Accenture, and the IP never really existed to begin with.

Droga5, for example, was one of the few agencies that did great brand work the old-fashioned way – undoubtedly something that made it attractive to Accenture in the first place. The irony, though, is that by leading it further away from the way of working that made it so special, the consulting giant will kill its creativity.

“Accenture Interactive has been dazzled by its ambitions to become the CMO agency of record…. But, in flashing its cash, it is spending millions on acquiring nothing of any value.”

If pressed, the recently acquired agency staff at Accenture will tell you just how dysfunctional the new arrangement is. They’re largely unfulfilled. Rarely do they feel their work has any sort of meaning or purpose. What’s more, the different disciplines have found little or no common ground, and find it hard to work together as a cohesive whole. It’s not surprising, then, to see talented people leaving in droves.

Beyond the window dressing 

It’s clear, then, that consulting firms and creative agencies are no easy bedfellows. But in his company’s defence, Accenture Interactive’s Senior Managing Director for North America, Glen Hartman, described its culture as being “far, far away from what a stereotypical consulting firm would look like. Our office and studios look a lot like Droga5’s.”

In demonstrating a belief that office design equates to workplace culture, this statement serves as an illustration of how confused Accenture is right now. It wants to justify its new strategy so badly, it’s started dressing like a creative agency. But if you look beyond the window dressing and see that you and your partners are speaking a different language with a different purpose, selling to different people in a different market, there’s no getting away from the fact that you’re different.

Accenture Interactive has been dazzled by its ambitions to become the CMO agency of record, and it wants to dazzle others with its new direction. But, in flashing its cash, it is spending millions on acquiring nothing of any value.

Related: Space between consulting firms and creative agencies is converging.