Feb 6, 2023 8 min read discord

Unlocking Potential Through the Transition from Management Consulting to Asset-Based Consulting (ABC)

Asset-Based Consulting stands apart due to its reliance on highly valued human resources and a culture that promotes entrepreneurship, creativity, and innovation.

@copyright Robert Kneschke

“There is surely nothing quite so useless as doing with great efficiency what should not be done at all.”
Peter Drucker

Given my background as a customer of Management Technological Consulting and my present position as the Founder of one, the disruption of consultancy business models is essential and highly relevant. Based on my observation of the market over the past six years, I recently had an epiphany on the subject.

What is a Management Technological Consulting?

A Management Technological Consulting firm is a professional services company that specialises in providing businesses with strategic assistance, technological solutions, and operational enhancements to maximise their overall performance to accomplish their business objectives. This is the most commonly accepted definition of Management Technological Consulting. The business assists clients in navigating the rapidly evolving digital environment, improves their decision-making ability, and propels growth by integrating managerial, technological, and domain-specific knowledge capabilities. Management Technological Consulting work closely with their clients to find new opportunities for corporate growth, enhance the effectiveness of current procedures, and implement innovative technologies to develop a competitive advantage and achieve long-term success.

My reflection on the market is quite different from the above.

Management Technological Consulting is characterised by the number of consultants sold to a client that is content to accept as many resources as they can accommodate within the allotted budget at a price that is as low as is reasonably attainable. In a practical sense, the two companies are squeezing one another to maximise their profits and appear suitable in the eyes of their shareholders. Because the client is the one who is footing the bill, the nature of the relationship is harsh and unambiguous; the client is always right, and the consultants are obligated to comply with client commands regardless of whether or not the orders are accurate because the relationship must be maintained above all other considerations.

Frequently, the consultancy will empower a managerial expert with lighter technical comprehension as the client relationship manager to oversee the minions, imposing their mastery above the delivery team on technical decisions for the great benefit of the annual compensation target, margins, and profit. It maximises the yearly compensation target, margins, and profit. Ultimately, the minions are expendable and exchangeable by even less costly new grads who lack experience and a grasp of the technology and working methodology but are lucky to be learning and gaining experience.

It has the appearance and the feeling of being a low-budget movie with a horrible screenplay and awful acting. As is the case, sincere, values-oriented, knowledge-based, and competent Management Technological Consulting are working towards a paradigm change to asset-based consultancy. To separate themselves from regular Management Technological Consulting and to diversify their revenue streams away from outsourcing and lower-cost shore operations.

What is an Asset-Based Consulting (ABC)?

An Asset-Based Consulting (ABC) is a professional services organisation focusing on knowledge assets. In exchange for building intellectual property, it delivers ongoing engagements with clients outside a traditional project-based delivery model based on deploying human capital. It generates and manages value-added services and innovative solutions employing core competencies, existing resources, and past-acquired expertise.

Rather than recognising issues and immediately creating outcomes, an asset is a reusable tool, method, framework, way of working or solution inspired by past client engagements or research in problem resolution. The emphasis on delivery is not solely centred on the need of the client but as well on the pursuit of intellectual property (IP) that can be explored in many business models, such as accelerators for future client engagements, business development collateral, transfer knowledge, advisory, licenced or open-source solutions.

“The ultimate goal is an unwavering determination to produce client value while father the organisation's Intellectual Property (IP).“

Assets can be physical (such as technology, infrastructure, or a solution) or intangible (i.e., expertise, relationships, methodologies, processes).

The emphasis is on long-term, knowledge-based organisational success by helping clients grow according to their needs and not their perceived wants in exchange for domain knowledge.

Instead of the standard "time and material" pricing model, Asset-Based Consulting take a more comprehensive approach, going beyond merely augmentation by implementing sustainable and reliable income structures.

A typical Asset-Based Consulting will include the following features:

Taking advantage of a company's fundamental strengths and skills to drive success via ongoing development and partnership,
SAS (Sustainable, Amiable, and Sufficient) growth fueled by values and a purpose where profit is a by-product, not the main drive,
Finding underutilised organisational resources to enable continuous research, strengthen existing assets and spawn new ones,
Recognise possibilities in a decentralised flattened organisation in which all parts participate and are recognised for their contributions,
A living organisation propelled by an iterative business OS of exploration and experimentation. People positive and complexity-conscious that value collaboration, innovation, creativity, and entrepreneurship, as per Aaron Dignan Book " Brave new Work"
Continuous hypothesis testing learning loops, generating differentiating leaps that create value for both the organisation and its clients,
Delivering tailored solutions that combine unconventional consulting approaches with internal knowledge to produce and implement solutions more quickly and with outstanding quality,
An intense curiosity that drives one to challenge established wisdom and norms for the sake of discovery and progress.

The following bullet points is a list of common advantages of employing an Asset-Based Consulting approach:

Increased resource utilisation and knowledge through practical experience, allowing inexperienced resources to be integrated into mission-critical areas of the organisation sooner and with substantially greater competence,
Focus on leveraging an organisation's assets, resources, and competencies to maximise value and minimise risks without sacrificing quality and innovation,
Design thinking, product-driven, and lean startup to improve agility, flexibility, customisation, and innovation,
Developing a multidisciplinary knowledge-based organisation in which tools, techniques, and methodologies lead to intensified innovations, thereby enabling businesses to respond more effectively and quickly to changing market trends and disruption,
Decentralised, self-managed, and accountable systems that boost productivity and foster organisational growth assets capitalisation,
Assuring that solutions align with the current and future values and goals of the organisation,
Establishing strategic alignment with the client to foster cooperation and partnership beyond the scope of standard augmentation engagements or projects,
Shorter integration project cycles gain time spent on identifying, analysing, and managing to facilitate integration and outcomes,
Enhance entrepreneurial culture to speed up plans, initiatives, and results,
Adopting experimentation within the context of technology and disruptive innovation aids organisations in identifying new opportunities and developing novel solutions and services that address actual problems more quickly,
To leverage defects as a learning experience and tackle disruptive innovation efforts head-on to assist organisations in maximising their technology investments,
Solution-focused rather than problem-focused, emphasising the creation of value streams rather than the resolution of problems,
It increases a company's capacity to navigate organisational complexity and complicated systems by embracing complex challenges through simplification and breakdown,
To invest in the growth of the company's human capital. A progressive firm needs to invest in the growth and development of its staff's talents.

The power of Assets!

In later articles, I will cover the notion of learning and applying nature's phenomena constructs, such as Murmuration and Mycelia, as my inspiration for systems and solutions architectures. Still, I will include some fundamental patterns for ideating successful Assets for this paper.

We must design Assets for resilience, a by-product of numerous experimental concepts from many clients and use cases that helped customers to achieve a leap. Tested, tried, deployed and live operational solutions, committed to minimising downtime, upholding availability and reducing user impact, preserving service continuity, and allowing users to access vital data or functionality without interruption or errors by keeping a system functioning despite faults or breakdowns. Using augmented AI with self-healing features increases fault tolerance, helping systems not eliminate but tolerate errors, preventing catastrophic breakdowns or data loss and, in the process, learning and adapting for faster recovery times via higher automation and autonomic systems to remove manual intervention, decreasing operational complexity, reduce cost and enhance efficiency, and eliminate complicated solutions.

Assets are inherently multi-purpose solutions that simplify workflows and consume fewer resources while increasing productivity through decomposable applications built on a microservices architecture. They reduce technical debt and software licencing, maintenance, and training costs by consolidating functionalities in one solution and focusing on open-source technologies and unified interfaces. Easy to scale and adaptable to complex scenarios and the creation of complicated systems, such as globally distributed programmes and decentralised governance, addressing locality governance and policies.

Assets must be designed by default as decentralised and distributed; The dispersed, decentralised mesh model protects against sophisticated threats, allowing enterprises to quickly adopt and administer security policies and decreasing security incidents and danger response time. It provides several layers of protection, redundancy, and fallback measures and decentralises governance across the enterprise. Distributed data offers faster and more efficient retrieval and processing, optimises network resources, reduces bandwidth utilisation and processing time, supports large datasets without affecting system performance, can withstand node failures better than replicated data, improves data storage for localised regions while preserving global connectivity and proximity, enhances the user experience by putting computing resources closer to users and spatially distributing data.

Assets are decoupled and collaborative, a system of artefacts working as independent units but with the collective thought of one, constantly reacting to change and forming new patterns. The distributed service mesh architecture provides improved scalability, agility, security, better observability, reliability, simplified network management, easy fault tolerance, and cost-effectiveness. Large applications can be broken down into smaller microservices independently scaled up or down based on demand. It yields an improved security posture by enabling communication encryption between micro-services and handling authentication and authorisation directly. It also allows for the observability and monitoring of micro-services, making diagnosing and debugging issues easier and enhancing system performance. Finally, it provides a resilient system that can continue functioning even if one or more micro-services fail or become unresponsive.

The commercial benefits!

There are many commercial advantages to adopting an Asset-Based approach.

Retaining and recruiting highly technical people is particularly hard. The best human capital tends to get bored if faced with repetitive work or everyday tasks with little or no learning challenges. The most technically advanced consultancies are confronted continuously by product companies with higher salaries and other perks. Investing in knowledge assets as the core business significantly increases the probability of maintaining exceptional technical minds.

It benefits long-term business cash flow with improved projected revenue and resource distribution. Avoiding the downturns and uncertainties of project-based work.

It increases the overall intellectual property since the consultancy gains domain-specific knowledge from clients to improve further and create assets.

It boosts the probability of generating new leads and maintaining long client relationships since it gives opportunities for the best mind to show off their skills and for clients to appreciate top individuals in their fields of expertise.

Significantly improves company branding and raises the ability to attract talent and new clients. Positive and good quality branding is fundamental for the business to maintain a higher rate card.

It institutes a company culture of innovation and value creation as a market leader oriented toward achieving a leap in value origination and focusing on discovering new and uncontested market space.

"The ecstasy of deciphering the unsolved."

Epilogue

Compared to a management consultancy or a product firm, an Asset-Based Consulting stands apart due to its reliance on highly valued human resources and a culture that promotes entrepreneurship, creativity, and innovation. Reacting to disruption in a controlled, decisive, creative manner as part of a culture of euphoria and gratification towards rationalising complex systems and streamlining complicated problems; daredevils in pursuing new ideas; at odds with conformity in the creation of assets to accelerate outcomes.

References

The Creative Consulting Company, by HBR
Consulting on the Cusp of Disruption, by HBR
Asset-Based Consulting Will Gradually Change The Consulting Revenue Model, By Forrester
Asset-Based Consulting. Why Leading Consulting Firms Are Adopting It. By 9 Lenses