It is not uncommon for us here at Research Strategies Australia to encounter clients who, having previously engaged with large consulting firms, express dissatisfaction with the outcomes of their engagements. Often times we are coming in after the fact to deliver what clients describe as 'related' work, which is code for 'redoing' the work that has already been paid for. A recurring sentiment is that despite substantial documents left behind by these firms, the outputs are in practice, not useful. There is widespread frustration with a lack of actionable insights, and an overwhelming sense that the documents merely regurgitate what the client already knows about their own organisation.
A crucial issue contributing to this dissatisfaction is consultants' over-reliance on generic frameworks. Frameworks, while seemingly offering structured analysis and insights, often fall short of providing valuable, context-specific strategies that can be implemented to effect tangible change. The overuse use of frameworks obfuscates the unique challenges and opportunities that organisations face, leading to superficial solutions that fail to address clients' complex problems.
The Illusion of Utility: SWOT Analysis and Three Horizons
The two worst culprits I encounter are the SWOT Analysis and the Three Horizons model. Their popularity stems from their apparent simplicity and universality; they offer a seemingly structured method to analyse a vast array of organisational scenarios. However, the utility of these frameworks is an illusion, masking their inherent limitations.
The SWOT Analysis categorises organisational characteristics into Strengths, Weaknesses, Opportunities, and Threats. While this may provide a general understanding of an organisation's condition, it inherently limits and oversimplifies the multi-faceted and complex reality of an organisation’s situation. It presupposes that every organisational factor neatly fits into one of these four categories, often forcing a reductionist approach that flattens complexity and distracts from the intricate work of strategy development. It is an approach that might (or might not) have been adequate for 1960s American business contexts, where it originated, but that itself is a long way away from the the complexities faced by publicly funded research institutions in Australia in 2023. Why would we assume that a 60 year old tool, developed in an inherently different operating context, would have any applicability to developing a university research strategy?
Similarly, the Three Horizons model, which promotes a distribution of effort across maintaining the core business, expanding into new markets, and developing next-generation products, is a heuristic at best. It is simply not grounded in empirical evidence and artificially limits strategic options based on arbitrary allocations of time and resources: Horizon 1 is here and now, but Horizon 3 will take a long time to develop; allocate 70% of resources to Horizon 1, 20% to Horizon 2 and 10% to Horizon 3...these are the tropes employed to put a veil of empiricism and scientific rigour around the framework.
While it may have some utility in highlighting the need to manage a portfolio of efforts that have different associated risks, this should be so obvious to anyone who has managed any long term project that it is not even worth saying. Worse than that, though, taking the model's rigidity on face value will hinder quick action when opportunities for significant advancement appear. What if, for example, one could accelarate the development of a Horizon 3 product to be available tomorrow (e.g., by acquiring it from someone else)? If such an opportunity presented itself should a manager ignore it because it has arrived ahead of schedule, or if they have allocated their 10% effort to that horizon already should they ignore it because they have no resource left to pursue it? Of course not. Steve Blanks has made similar observations.
In essence, these frameworks, while providing some structure to thinking, fall short of capturing the unique circumstances of each organisation, leading to generic and often non-actionable strategies. In reality, strategies are a combination of a unique problem-belief-solution dynamic that an organisation faces, and generic frameworks simply can't help.
The Genuine Function of Frameworks: Empirically Grounded Tools for Thought
Frameworks, when properly employed, function as intellectual scaffolding, enabling structured thought and facilitating fruitful discussions. They are not rigid templates or universal solutions. Unfortunately, these tools are frequently misapplied.
A prime example of a useful, empirically informed framework is the Boston Consulting Group's (BCG) Experience Curve. Introduced in the mid-1960s, the BCG Experience Curve was based on a modeled correlation between increasing experience, rising production scale, and subsequent efficiency improvements. This was grounded in the empirical observation that costs decline at a predictable rate as cumulative production doubles. By effectively mapping this relationship, the BCG Experience Curve provided a framework to guide strategic decisions, for instance, highlighting the importance of market share and scale for cost efficiency.
However, the value of the Experience Curve, like all strategic frameworks, hinges on its contextually sensitive application. While it was a powerful tool at the time, and in certain industries, its relevance has dwindled in the face of fast-paced sectors where innovation and differentiation take precedence over cost efficiency, and where supply chains are integrated, de-integrated and general complexity abounds.
The Pitfalls of Generalisation and the Imperative for Tailored Strategies
The allure of familiar, pre-existing frameworks carries significant risks. Relying on non-empirically grounded frameworks can result in a superficial understanding of a client's unique situation, potentially leading to misguided strategies and disappointments.
The fundamental issue lies in the erroneous assumption that frameworks, designed as broad thought-tools, can adequately encapsulate the specifics of varied client situations. This 'cookie-cutter' approach often fails to capture the complexities inherent in different organisational contexts, ignoring the unique variables and nuances that influence each client's strategic choices.
In contrast, effective consulting requires a deep appreciation for the distinctive empirical conditions of each engagement. Rather than attempting to shoehorn these unique circumstances into pre-packaged frameworks, consultants should strive to develop tailored strategies that genuinely reflect and respond to the specific conditions they encounter. This requires an ability to think beyond established models, and instead, design or adapt frameworks that are sensitive to each client's individual context. Effective consulting requires a deep understanding of the client's unique ambitions and problems, and the flexibility to adapt or more likely create new frameworks that can truly capture the complexity of their situation.
The widespread reliance on pre-existing frameworks has led to an industry culture where generic, non-specific advice is often presented as comprehensive strategy. This approach not only undermines the potential value of consulting, but also leaves clients disillusioned with non-actionable outputs. To truly add value, consultants must prioritise customised strategies over the convenience of generic models, embracing the richness and complexity that each client situation presents.
Caught in the Business Model Trap: How Consulting Firms Sacrifice Customisation for High Leverage
The business model of many large consulting firms is predicated on delivering high-leverage solutions, often leading to a disproportionate emphasis on generic, one-size-fits-all approaches. This model inherently promotes the application of standardised frameworks that can be deployed across diverse client scenarios, thus enabling firms to maximise efficiency and scalability. This reduces strategy to the application of simplistic descriptions, rather than embracing the complex reality that strategy is an exercise in problem-solving.
The drive for leverage often comes at the cost of customisation and actionable strategies, compromising the value delivered to clients. The logic of this business model is straightforward: by using generalised approaches like pre-existing frameworks, firms can deploy junior resources , senior partners can manage a large number of engagements, thereby maximising profit through a high-volume, low-cost approach. However, while this approach may be economically attractive for the firm, it fails to deliver the insights and strategies clients need. In essence, clients end up purchasing the firm's business model—packaged in the form of a generic frameworks—rather than a bespoke strategy tailored to their problems and beleifs about how the world functions.
This business model trap is pervasive, and its effects can be insidious. Firms become so entrenched in their routine of delivering standardised outputs that they lose sight of the need for deep, context-specific understanding. The result is a propensity to produce outputs that, while impressive in their page-count, often lack depth and relevance. Clients are left with documents that do little more than describe what they already know, lacking the actionable insights required to drive change and improve performance. As consultants, we must strive to escape this trap, prioritising the delivery of customised, actionable strategies over high-leverage efficiency.
Clients must be discerning in their expectations of consultants and demand more than generic frameworks that merely describe their existing knowledge. The focus needs to be on customised, actionable strategies that truly reflect their unique situation.
Firstly, clients should critically assess the outcomes of their consulting engagements. Are the deliverables merely bulky documents echoing known facts, or do they provide new, valuable, and actionable insights? Clients must demand the latter, pushing consultants to move beyond descriptive exercises and towards delivering meaningful impact.
Secondly, a critical understanding of consulting frameworks is crucial. While these tools can be instrumental in structuring discussions and thinking, they are not universally applicable solutions. They should be treated as dynamic and flexible tools that aid understanding, rather than rigid templates that shape it.
Thirdly, consulting clients should recognise the limitations of standard business models in consulting firms. These models often prioritise high-leverage efficiency over customisation, which can undermine the value delivered to clients. By challenging these practices, clients can drive a shift towards more bespoke, client-specific strategies.
Finally, clients should seek consulting partners who engage deeply with their unique context, developing tailored strategies based on empirical observations and co-design rather than applying generic, pre-existing frameworks. In essence, the real value in consulting lies in its ability to navigate the complexity of each client's situation, delivering insights that are not only descriptive, but truly transformative.