I had two very interesting calls this morning: They are the impetus of this article; one was with a potential client in the banking and financial industry and the other was with a LinkedIn colleague looking to join the management consulting industry. Both conversations landed on the same topic—the state of the consulting industry right now.
I wont hide that the consulting industry, while still very sizeable, is facing challenges that have led to cooler (some would even say “colder”) reception from some corners of the business community. In many regards, the cold shoulder is understood and warranted. BUT—not all firms are the same. I can only speak for myself: PM Principle was created to be different, to deliver different, and to earn different. Here's a breakdown of the current state of the management consulting industry. I want to specifically focus on the impact of the large firms and the trickle-down effect it’s having on the overall industry. THIS ARTICLE IS NOT MEANT TO BE CRITICAL—IT’S JUST STRAIGHTFORWARD, GRIPPING, AND AS TRUTHFUL AS POSSIBLE.
1. Reasons for Potential Disenchantment with Large Consulting Firms:
· One-size-fits-all solutions: Clients are feeling that larger firms are overusing their ‘standardized approaches’ over custom solutions. [Vault, Consulting: Industry Outlook].
· High fees and perceived lack of ROI: The cost of engaging big-name consultants ARE significant, and some businesses are questioning the return on investment. (Especially when the solutions aren't highly customized and recent graduates lacking the real experience necessary to truly be consultants are deployed [IBISWorld, Management Consulting in the US].
· Focus on "blockbuster" projects: There's a perception that MBB firms prioritize large, pricey, splashy projects over smaller engagements that could benefit mid-sized businesses [NMS Consulting, Management Consulting Industry Trends in 2023].
· Brand Cache: Many of the larger firms simply have a strong brand recognition. With the poor ROI, the overpricing, and inexperienced staff, clients are feeling disenchanted.
2. Impact on Smaller Firms:
While these trends might lead some companies away from the bigger players, it can be a double-edged sword for smaller consultancies. They are mistakenly lumped in with their larger cohorts. PM Principle, for example, was founded over 10 years ago after witnessing these practices from the inside out. We were born to be different—THE ALTERNATIVE TO THE BIG FIRMS. We create only tailored, custom solutions; our consultants have 20 years of real tangible business and senior experience (as opposed to just Ivy League school name—though we have that too); and we are less about blockbuster projects or even our company branding. We promote our consultants, our employees, and their successes; in essence, we consider ourselves a holding tank for superior brain power. I won't lie, though PM Principle IS different and has made great impacts with that difference—we are still caught in the wave created by the larger firms.
3. It's important to note that the industry is still growing:
· The global management consulting market is expected to reach $343.5 billion by 2025 [NMS Consulting, Management Consulting Industry Trends in 2023].
· The US market specifically is estimated at $368.5 billion in 2024, with a strong projected growth rate [IBISWorld, Management Consulting in the US].
There is still the need for consulting—that “outsider looking in" perspective is still powerful and is still very much needed in, and by, the business world. For smaller firms:
· Potential for increased demand: As businesses seek more specific solutions and potentially lower fees, smaller, more agile firms could see a rise in demand.
· Pressure to compete on value: Smaller firms will need to clearly demonstrate their expertise and cost-effectiveness to stand out from the crowd.
Overall, the management consulting industry is adapting to a changing business landscape. While large firms face some criticism, the industry as a whole is still experiencing growth. Smaller consultancies have an opportunity to capitalize on the potential shift in client needs, but they'll need to focus on demonstrating their value proposition.
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Sources:
Vault, Consulting: Industry Outlook [Vault, Consulting: Industry Outlook]
IBISWorld, Management Consulting in the US [IBISWorld, Management Consulting in the US]
NMS Consulting, Management Consulting Industry Trends in 2023 [NMS Consulting, Management Consulting Industry Trends in 2023]
May 10, 2024
I was recently asked to speak at a client sponsored meeting about major topics On The Minds Business Leaders. I was given 30 minutes and only two days to prepare. I chose to talk about the ethical considerations surrounding AI and Generative AI and what that means to business. Here is a summary of what I discussed and PM Principles stance on the issue.
The six (6) the top ethical considerations surrounding Generative AI in the business world:
1. Deepfakes and Dis[Mis]information: A Threat to Trust
The Issue: Generative AI is powerful--it can create incredibly realistic videos and images (deepfakes) that can be used to spread misinformation and manipulate public opinion. We, as humans, tend to believe that we see. So, if we see a created video or picture—we tend not to question its authenticity. This could easily damage company reputations, sow discord, and erode trust in the brand.
Why it Matters: Businesses rely on built trust with their customers and partners. Deepfakes used for malicious purposes can wreak havoc on brand reputation and market stability.
The Business Impact: Deepfake attacks could lead to financial losses, regulatory scrutiny, and a crisis of confidence in a company's products or services. Most companies today really don’t know how to protect their brands and image—they’ve simply focused on building that brand and image.
PM Principle’s Position: Businesses need robust safeguards against deepfakes, including educating employees and customers on how to spot them. This should be incorporated in to the Crisis Management process. Collaboration with tech companies and policymakers is crucial to develop detection methods and even mitigation strategies and possible ‘legal penalties or recourse’. However, AI should be viewed as tool—and we don’t see that changing. In fact, we see it getting more powerful and more accessible.
#Deepfakes #Misinformation #TrustInBusiness
2. AI-Generated Content and Copyright Chaos
The Issue: Generative AI was built to create content that mimics existing styles, blurring the line between inspiration and imitation. This raises questions about copyright ownership and fair-use of creative materials. Authors are hating their work, their style, their uniqueness being synthetically imitated.
Why it Matters: Businesses [and users] need clear guidelines on how to use AI-generated content responsibly, ensuring they don't infringe on existing copyrights or stifle creativity. As a global community we may also need to clearly define ‘creative material’ verses ‘knowledge material.’
The Business Impact: Copyright lawsuits and accusations of plagiarism can be costly and damage a company's reputation, increase costs, and even introduce other complications. Business leaders may need to define the ‘when, how, who, and even what’ to use AI for.
PM Principle’s Position: As management consultants we have been disseminating data, practices, and methodologies for a long-time. We did manually, for a cost, and held those secrets for sale. For some firms (and we’re not judging) selling this type of information was their sole business practice. But, AI has now opened it up—democratized it, collectively, and disseminates it without cost. The legal landscape surrounding AI-generated content is still evolving. Businesses are pushing for clearer copyright frameworks to encourage responsible innovation in this field. Until then, I companies may need to form internal stances and positions. As a company, PM Principle uses AI—but those who have worked with us, know that we know the difference between foundational knowledge and competitive knowledge.
#GenerativeAI #Copyright #ContentCreation
3. AI-Driven Automation and the Future of Jobs
The Issue: Generative AI can automate many tasks currently performed by humans, leading to job displacement across various industries. Like computers, like the internet (thanks Al Gore), and even like the Amazon this is disruptive. It is a change. It will change our workforce. But we have to remember that “change” and “displace” are different.
Why it Matters: Businesses need to navigate the ethical implications of AI automation, ensuring a smooth transition for workers and fostering upskilling initiatives to avoid displacement.
The Business Impact: the role of Business is no longer just allegiance to a customer-base; it has evolved to include an allegiance to their workforce. Businesses have a responsibility to help workers adapt to the changing job. That means, we as workers, have to learn how to learn—constantly learn, and businesses have to make [adult] learning part of their change management practices.
PM Principle’s Position: A focus on reskilling and retraining talent is crucial to ensure a smooth transition as AI automates tasks. I specifically went to Harvard for my master’s in psychology simply to better help guide my clients in adult learning. Businesses should assume some responsibility for implementation of AI; however, a business’s main responsibility is to generate profits. Hence they will always seek greater efficiencies.
#GenerativeAI #FutureOfWork #Automation
4. Algorithmic Bias and Unequal Opportunities
The Issue: Generative AI models trained on biased data can perpetuate and heighten those inequalities. Imagine that perpetuating areas like your hiring, loan approvals for your company, and maybe internal risk assessments.
Why it Matters: Businesses have a responsibility to ensure fair and unbiased outcomes for all stakeholders. Biased AI can lead to discrimination and exacerbate existing social inequalities. Can data be fair? Can it be made unbiased?
The Business Impact: Public backlash, regulatory fines, and legal action can follow discriminatory practices fueled by biased AI. An “AI did it” may not be a good enough defense.
PM Principle’s Position: DATA MANAGEMENT!!!! Implementing rigorous data auditing and fairness checks for AI development is essential. Many of clients hate this word, but governance is essential. I recall a past client who just didn’t want to modernize their data practices. It was a battle. (One we unfortunately lost). Businesses should also strive for diverse teams that can identify and mitigate potential biases in data and AI algorithms.
#GenerativeAI #AlgorithmicBias #FairnessInAI
5. Privacy Concerns and the Power of Synthetic Data
The Issue: Generative AI can create synthetic data, which is realistic, but fabricated information nonetheless—extrapolated (if you want to use the statistical term). Additionally, there are also concerns about data privacy and potential misuse of personal information or business information.
Why it Matters: Businesses must ensure smart and responsible use of data, safeguarding user privacy, and adhering to data protection regulations are now essential elements of running a business. Significant changes in these areas should also be expected in the near future. New tools will arise in this space too. Additionally, securing business, customer, and other data will become increasingly important.
PM Principle’s Position: Data breaches, security violations, and privacy abuses can erode a customer trust and lead to heavy losses. Simply making if a point to know the details of your data, behind your data, how your data is used and stored, can a significant advantage. Customer data is key. Production secrets need to be well vaulted. Businesses need to be transparent about how they use data as much as how they secure data.
#GenerativeAI #Privacy #SyntheticData
6. The Black Box Problem and Explainability of AI
The Issue: Many Generative AI models are complex, making it difficult to understand how they arrive at their outputs, the algorithms used, and the ingredients in the secrete sauce. This inability to clearly understand and explain the answers that AI gives us, raises concerns—not only about accuracy and power, buy about accountability and potential misuse.
Why it Matters: Businesses need to be able to know and be able to explain the reasoning behind AI-generated decisions, especially when these decisions have a significant impact on individuals, society, customers, business, employees—they need to know to be able to defend and support.
The Business Impact: Lack of transparency in AI decision-making can lead to a loss of public trust and difficulty in defending against accusations of bias or unfairness. New costs in data protection, audits, governance, etc. may become necessary.
PM Principle’s Position: There's a growing movement towards developing explainable AI (xAI or exAI) models that can provide clear insights into their reasoning. This is crucial for building trust and ensuring responsible use of Generative AI.
#GenerativeAI #ExplainableAI #BlackBoxProblem
By fostering open discussions about these ethical considerations, businesses can harness the power of Generative AI for positive change while navigating the potential pitfalls. Let's continue the conversation!
Let us know how we can help.
March 7, 2024
In the rapidly evolving landscape of technology, artificial intelligence (AI) emerges as a revolutionary force, fundamentally changing how businesses operate, innovate, and engage with their customers. The transformative power of AI extends across every sector, offering unprecedented opportunities for growth, efficiency, and competitive advantage. Yet, AI remains shrouded in complexity and uncertainty for many business leaders. This article seeks to demystify AI, offering a comprehensive understanding of its capabilities, benefits, challenges, and practical applications in the business world. By embracing AI, businesses can unlock new frontiers of possibility, enhancing their operations and setting new benchmarks in customer satisfaction and innovation.
First, let’s really try to define AI: Artificial intelligence encompasses technologies that enable machines to mimic human intelligence processes, including learning, reasoning, and self-correction. At its core, AI can be classified into three types: narrow (or weak) AI, designed for specific tasks; general AI, which can understand and learn any intellectual task that a human being can; and superintelligent AI, which surpasses human intelligence. Key subsets of AI include machine learning (ML), where algorithms improve through experience, and deep learning, a type of ML based on neural networks with multiple layers.
Now for the business world: AI IS reshaping industries by offering smarter solutions to age-old problems. From retail and healthcare to finance and manufacturing, AI's adoption is widespread, driving efficiency, innovation, and improved decision-making. Businesses leverage AI for various applications, such as customer service bots, predictive maintenance, fraud detection, and personalized marketing strategies, demonstrating AI's versatility and impact. These adopters are gaining a significant competitive advantage. Imagine that you and your competitor have a similar product; they sell for $98, and you sell for $96. If it costs them less to make their product, THEY have a higher profit margin, and that wiggle room means they can easily deal with your lower price point—they just have to drop their price slightly, and now they are directly competing.
AI's adoption is rapidly expanding across all sectors, transforming traditional business models and processes. For example, we recently used AI in retail to enhance customer experience through personalization and recommendations. A client also asked us to use AI for smarter inventory management. In healthcare and Pharma, we use it to improve patient care with predictive analytics and diagnostic tools. Our number-crunchers in finance benefit from AI in fraud detection and automated customer service, while in manufacturing and “make,” there are significant advancements in Industry 4.0, predictive maintenance, and supply chain optimization—smart manufacturing in the factory of the future. These examples underscore AI's versatile applications, driving operational efficiencies and innovation. Reducing costs, increasing margins, and creating a new competitive playing field.
AI spans several varying capabilities and technologies, each offering unique benefits:
· Natural Language Processing (NLP): Enables machines to understand and interpret human language, facilitating interactions between computers and humans. Applications include chatbots and sentiment analysis.
· Computer Vision: Empowers machines to process and interpret visual information from the world, applied in facial recognition systems and even autonomous vehicles.
· Predictive Analytics: Uses historical data to predict future outcomes, aiding decision-making processes across finance, marketing, and beyond.
Now think of how these tools can make you smarter, your manufacturing line better or more accurate, or even your finance process more precise or indicative. Imagine how your industry, your world, your way of doing business, or even the way you communicate, connect with, or service your customers can or has changed.
September 12, 2023
In the consulting industry, where I've carved out my business, I find myself grappling with a recent sense of disillusionment. I’ve set up media alerts to keep a finger on the pulse of the industry—today’s brought nothing but a cascade of grim headlines. Slalom Consulting axed 900 positions; McKinsey “reshuffled” this year too, affecting around 1400 individuals; and the list extends: EY, KPMG, and Deloitte all laying off hundreds of people. This barrage of bad news forces me to ask: what the hell is going on in the consulting world? Why the sudden onslaught of layoffs? Why the plummeting reputations to the consulting giants? Basically, WTF is going on?
Let's cut to the chase. Consulting, at its core, is a straightforward deal: “I have the knowledge you need, and I'm ready to sell it to you. Lets make a deal.” It's a simple exchange of business secrets, tax strategies, marketing insights, or tech wizardry. But then the internet burst onto the scene (thanks Al Gore), spilling all the giant’s secrets left and right, forcing them to rethink their product. “Fine,” said the consulting world, we will add services to the mix. So the consulting world scrambled and added services to their once "secret sauce."
Now, what crafts a powerhouse consultant? How did the likes of Bain, McKinsey, and Deloitte rise to dominate the industry? It boils down to a potent mix of tactical and strategic knowledge, a blend that created behemoths in various sectors, each holding a unique edge in specific domains.
But the real catalyst behind the industry's meteoric rise was the market, a landscape that echoed the mantra, "Leave no stone unturned, leave no customer on the table." Globalization was the game-changer: opening doors to untapped markets and unprecedented profits. Yet, it also ushered in a complex, dynamic competitive landscape, where information overload became the norm, and navigating the corporate ship through hostile waters became a high-stakes game.
But here we are, witnessing the giants stumble, failing to adapt to shifting sands, clinging to outdated strategies that no longer resonate with the evolving demands. They opted for a shortcut, recruiting fresh faces from top universities, offering them a crash course in consulting, and sending them out, ill-prepared, into the field. This strategy, aimed at boosting profit margins, has backfired spectacularly, diluting the expertise pool and fostering a breeding ground for dissatisfaction among clients.
So, where to from here? The answer is glaringly obvious: listen to the market, the customers, the industry. As a consultant, that is what I would advise.
In my firm, we're doing just that. Leveraging the rich reservoir of experience that my partners and I bring to the table, we're committed to delivering strategies that empower our clients to function autonomously if that is what their end goal is. Our approach is grounded in humility, steering clear of grandiose profit margins to prioritize purposeful and effective outcomes that foster our and our client’s satisfaction and happiness.
We're here to shake things up, to bring back the sharp, incisive consulting that the industry was once renowned for, driven by expertise, integrity, and a genuine desire to see our clients succeed. It's high time the consulting world got back its edge, and we're here to lead the charge.
July 3, 2023
In the last few days—months—the term "metaverse" has become a buzzword for virtually everyone in every industry, sparking intrigue and excitement…and concern. However, in all these fancy articles, with great graphics and head-turning headline pics, no one bothered to clearly explain what the metaverse was or why and what I needed to know. Here, I am going to try to do just that: unveiled the secrets of the metaverse.
In simple terms, the metaverse is a virtual reality space—but a mixed space where users can interact with a computer-generated environment and other individuals in real time. It mixes VR and AR—Virtual Reality and Augmented Reality and the Internet.
For those of us who are curious, and I am, the term comes from a 1992 book, “Snow Crash” where the author, Neal Stephenson, portrayed a virtual reality where users could virtually engage with the expanses of the digital universe. He thought he was writing fiction.
The metaverse is real…but like all things, it runs on something—something fuels the metaverse—and that something, is data. Every action, interaction, and transaction within this virtual universe generates vast amounts of data. From user preferences and behavior to purchasing habits and social connections, the metaverse thrives on data. But what opportunities does this bring for business, for the everyday consumer, for everyone?
1. Hyper Customer Connection: Businesses will have deeper insights into customer preferences enabling in-depth personalization. Businesses will be expected, by their customers, to deliver a highly customized, tailored, individualized customer experience.
2. Precision Targeting: Businesses will know their customer better—and will now be able to market to their customers better. Imagine the optimized marketing capabilities! Imagine the precision targeting capabilities!
3. Innovation and Development: Data gathered from the metaverse can help businesses identify trends, analyze feedback, and gain valuable insights about products, usage, preferences, and more. By using this data, companies can make better decisions about product development, leading to more successful and market-aligned offerings.
4. Communications: imagine a new type of Teams, or Zoom, or FaceTime…imagine a new virtual workspace or workplace. Imagine how that could change sales or education, or just the daily call to your loved ones. Just imagine…
Here is something else that we have to keep in mind when talking about the metaverse—Yes, it is real, but it is still very much evolving—and like all things—will always be evolving. So many tech and consulting companies (and I know quite a few) are hesitant to define and describe the metaverse simply because they genuinely do not fully understand it. After all—it is complex and the possibilities are endless. It's understandable. As a result, the “metaverse” often takes different forms in different contexts, making it difficult to pinpoint a universally accepted definition. Despite all this, the business, social, education, communication, and the “everything else” possibilities are endless: seamless digital experience, collaborative workspaces and workplaces, new revenue streams, new social engagement, and new possibilities.
PS: there is a way to ready your organization for the metaverse. Let’s see if you can guess what it is.
Customer Success isn't just about keeping clients happy (although that's definitely part of it!). It's a strategic approach that fuels incredible business results.
Here are 6 insights I've gleaned from industry experts that will transform your customer success strategy:
1. Proactive is Profitable: Don't wait for issues to arise. Anticipate needs and
proactively guide customers to maximize value. (Reduced churn, increased
product adoption)
2. Metrics that Matter: Track the right data! Measure success beyond vanity
metrics and focus on customer health & engagement. (Improved customer
lifetime value, data-driven decision-making)
3. Content is King (and Queen): Empower customers with self-service
resources & personalized content. A knowledge base is your secret
weapon! (Reduced support tickets, faster onboarding)
4. The Power of Community: Foster connections between customers. User
groups and forums create a loyal ecosystem and valuable feedback loop.
(Increased brand advocacy, valuable customer insights)
5. Listen to Learn: Actively gather customer feedback through surveys &
calls. It's the roadmap to continuous improvement. (Enhanced product
development, happier customers)
6. Celebrate Success Stories: Showcase customer wins! Testimonials and
case studies are powerful magnets for new business. (Increased brand
trust, attracts high-quality leads)
By prioritizing these elements, you'll cultivate a thriving customer base that fuels sustainable growth.
