Fragmentation and Disaggregation
It is no surprise that our worlds have become more fragmented. Not only do established Financial Services firms compete with a plethora of challenger banks and Neobanks but their operating models have been dramatically transformed as they migrate more and more services to a remote/outsourced delivery model, leveraging cloud and API technology. Successful digital banks offer a portfolio of services to their customers, some built by their own internal teams others delivered by third parties.
The same is true for technology providers. Gone are the days where banks buy a range of solutions from a single monolithic source. The advancements of API and cloud technology combined with Open Data initiatives have fostered the rapid growth of the FinTech industries so that banks are now able to source and distribute best-of-breed products and services from a range of alternative technology providers. To succeed, banks must embrace this ecosystem of service providers.
Furthermore, the advisory and consulting industries are undergoing a similar change. Everything from structural changes such as EY hiving off its audit firm, down to the volumes of highly capable and experienced people leaving established consulting firms to contract or to create smaller boutique advisory firms, all illustrate this industry fragmentation. 20-years ago, buyers of consulting services were career bankers, now they are almost ubiquitously ex-consultants who understand “the consulting game”. These buyers, whilst they appreciate the security and breadth that comes with a big brand firm are also interested in the more innovative, agile smaller firms that offer a different value proposition. Boutiques and independent contractors therefore present a very viable alternative. Relationships and trust are personal, human things, not exclusively corporate constructs.
Succeeding in this fragmented world
Delivering change in this newly fragmented world requires a new set of capabilities. An advisor or consultant must identify and maintain a long list of best-of-breed solution providers. Their success is determined by their ability to create and then manage a complex ecosystem of organisations of different sizes, skills and cultures. Core consulting skills such as communication, stakeholder management, leadership and planning must be enhanced with expertise in contracting, incentivisation, as well as identifying and managing the new set of risks created by this new way of working.
The implication of solutions being assembled not built spans the whole operating model and impacts every service delivered by a typical programme. PMO, governance, procurement, risk management, finance, architecture, data, information security, HR and many others must all adapt.
Leading and Decision Making
“Safe place to fail” and “fail fast and often” are phrases rolled out time and again in sterile corporate meeting rooms and they fool no-one. Failing in a large corporate causes lasting damage to reputations and impacts career progression – no matter how many times we are told otherwise. This constrains their ability to innovate and to operate.
The skills required to thrive in this new world are more nuanced and subtle than those of the traditional “alpha” leader. Learning how to work together across a range of cultures, embracing our differences, learning from failure, recognising that there are multiple ways to solve a problem and encouraging flexible working, all require a different leadership style. Motivation, an ability to enthuse and energise, placing real trust in the team who may work for a different organisation on a different continent, role model behaviours, listening to and really taking account of others’ perspectives, yet also making decisions quickly and accurately (avoiding the tendency to make every decision by committee) are all core leadership skills that will be more and more in demand.
Quantum Six embraces this new world and helps enlightened clients succeed in this challenging but highly rewarding environment. Our role is to sit alongside the client, recognising that it is a lonely and challenging place to be, supporting them in their decision making, being independent of vendors and holding these vendors to account for meeting their responsibilities. We recognise that success is a collective thing, all parties must pull together and work for the single goal of delivering the client’s desired outcome. We recognise that communication is challenging, that vendors must be managed and supported to succeed and that incentives may not always be fully aligned.
Success in this environment requires a new kind of consulting firm and a new style of leadership.
About the author
Paul Gilbert has worked in professional services since the mid-90s, accruing nearly 30 years’ consultancy-led experience delivering transformational change across a broad range of clients – from multi-nationals to sole-traders.
When asked why he was joining Quantum Six at this time, Paul responded; “I have found a group of refreshingly like-minded and highly professional people who share my passion for a down-to-earth approach and who are happy to leave their egos behind. Quantum Six are building something fresh, honest and straight-forward. They are working with world class people, allowing teams to innovate, trying fresh new approaches and working with an ecosystem of clients and vendors who value and respect one another.
The world is changing fast and Quantum Six is enabling its clients to embrace and capitalise upon that change.”