The Eleven Change Roles

The Eleven Change RolesChange is Hard

Change can be complicated, change can be confusing, and change can be difficult to successfully implement in any organization. This is why 70% of change initiatives have been found to fail.

To help make change less overwhelming, and instead more visual and more collaborative, I set out to create the Change Planning Toolkit™ for project managers, change managers, and leaders everywhere to pick up and use with their change leadership teams to better plan and execute their organizational change initiatives, and even projects.

Change Planning Team Contributions

Creating a change planning team that can bring the information and influence to the table that you really need is one of the keys to the eventual success of your change planning sessions and the overall change effort as a whole. The information you need will obviously be driven by the topics that your team should cover as part of your change planning efforts. These include:

  • What is the current state?
  • What are the change drivers? (It is helpful to discuss history, context, and the main proponents.)
  • Is there a budget for both planning and executing this change?
  • What other change programs are in progress or about to begin?
  • How ready are we as an organization to make this change?
  • To see the rest of this list, please get yourself a copy of my book Charting Change

Who needs to be involved in change?

Nothing is more important for creating successful change in an organization than getting the right people in the room and engaged during the change planning process. And if you want to get your change effort off to a strong start and set it up for success, then I encourage you to focus more on knowledge than authority. Think about who knows the most about the key components of a holistic change plan.

Take a moment to consider which individuals in your organization will have the most knowledge and information on the intended change, and which individuals will provide the most considered viewpoints on the topics that you will focus on as you work through the series of worksheets and other tools in the Change Planning Toolkit™ on your way to creating your roadmap and series of fully populated change execution plans.

As we consider all of the data, personalities, ecosystem interactions and work items that must be considered, you’ll quickly see that change is a team sport and that there are many different roles for people to play.

With this in mind, I’ve created The Eleven Change Roles™ to identify the eleven roles that are important to the forming of a balanced and successful change leadership team, so start considering your candidates for:

1. Authority Figures/Sponsors

Somebody has to be in charge. This includes one main sponsor and a coalition of authority figures that can help push things forward when a push is required.

2. Designers

Designers are your big picture thinkers, people that can see how the pieces fit together, are skilled meeting facilitators, can quickly achieve mastery of new methodologies (like my Change Planning Toolkit™), and can help keep people on track as you build out the plans for your change effort.

3. Influencers

Influencers are well-respected and forceful people in the organization. They may lack the formal position power of a sponsor or authority figure, but they can help rally people to the cause with their words and actions.

4. Integrators

Integrators are good at bridging silos, building relationships that cut across geographies and hierarchies, and finding ways for different work teams and departments to work together to achieve a common goal.

The Eleven Change Roles

5. Connectors

Connectors are slightly different than Integrators, and the difference is that they know where the overt and hidden resources lie in the organization, and have the personal connections and influence necessary to open a dialogue that hopefully results in both needed connections AND access to resources.

6. Resource Controllers/Investors

These people have things that you need – human resources, information resources, physical resources, and human resources. You must convince them to invest those resources in helping you successfully achieve your desired change.

7. Troubleshooters

There are always going to be hiccups and problems that emerge along the way, some expected, and some not. Troubleshooters are really good at helping to identify those up front and enjoy the challenge of finding ways around, over, or under these potential barriers when they crop up. It is even better when the team can identify ways to avoid or overcome them before broader communications begin. Troubleshooters can help with this and often have the deep domain knowledge or the deep insight into the change target’s mindset necessary to also help move minds and resources to support the change program.

8. Evangelists/Storytellers

Every change effort has a story to tell about how the desired future state is better than the current state, and is worth the disruption of making the change. There is the building of a vision, the creation of themes that will weave together into your story, and symbols that will reinforce and show your commitment to realizing the goals you set out for the change effort. Without these, evangelism and storytelling will find it hard to help people understand or support the change goals. So, you need to have evangelists and storytellers at the ready.

9. Endorsers/Supporters

Getting people to agree to talk up the change effort, even if they are not taking an active role in pushing it forward towards completion, is incredibly powerful. Don’t be afraid to reach out and ask for this seemingly insignificant assistance, but be sure and arm these individuals with the themes, symbols and stories that will reinforce the change vision and sustain the change effort’s momentum.

10. The Impacted (key groups of impacted individuals)

Who’s going to be affected by this change? Don’t be afraid to invite these people into your planning efforts early on to voice their concerns so that you can understand their otherwise unvoiced objections, identify solutions or mitigations, and potentially recruit them as impactful Evangelists or Endorsers/Supporters.

11. The External (perspectives from people not affected)

It’s easy to miss risks, assumptions, barriers, and points of potential resistance when you get too close to the effort. Inviting people from outside your organization into your planning process, or to provide feedback on your change effort, will prove enlightening through the additional perspectives they contribute.

Conclusion

When you take the time to thoughtfully recruit people into all of The Eleven Change Roles™ listed above you will have a richer set of inputs, a much livelier discussion, and a stronger set of outputs from your change planning process.

Getting the right people with the right knowledge in the room and engaged during the change planning process will get you off to a strong start and set your change effort up for success. Having people with a strong ability to verbalize meaningful, well intentioned and well informed contributions around the key components of the planning process will provide powerful content as you work through the series of worksheets and other tools contained in the Change Planning Toolkit™ and ultimately populate your Change Planning Canvas™ and your execution plans. The toolkit includes more than 50+ tools including an Eleven Change Roles Worksheet™ that you can use in your change planning meetings or off-site to make sure you have all eleven roles filled.

CLICK HERE to get an 11” x 17” version of The Eleven Change Roles™ shown above as a FREE DOWNLOAD

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Image credit: beaconinitiative.net and Charting Change by Braden Kelley (publisher: Palgrave Macmillan)

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Five Reasons to Invest in the Change Planning Toolkit™

2017 promises to be a year of unprecedented change. As a result, it will be imperative for managers to empower themselves with the tools that will help effectively lead the change initiatives that will be required to cope with political and economic turmoil and threats from digital entrants intent on disrupting the industry your company may now lead (or aspire to lead). Are you sure you’re ready to lead the change efforts your organization will need to survive in 2017 and beyond?

Before we move forward assuming that we’re equipped to succeed, let’s look backwards and ask the following questions:

1. How many of you tried to change something in your organization in 2016 and failed?

— Or had more trouble implementing the change than you would have liked?

2. How many of you ran a project that proved more difficult to execute than you expected?

Admit it. No matter how well the change initiatives or projects you lead in 2016 may have gone, they could have gone even better. As leaders we do the best with the knowledge, skills, abilities, and tools we have available to deliver the desired results. But, as we acquire new tools, or new knowledge, skills and abilities, we do even better.

2016 is almost over and as we continue to invest less of our time on executing 2016 projects and change initiatives and invest more time into planning our 2017 change efforts, this is the perfect time to acquire some new tools and master the new knowledge, skills, and abilities necessary to use them to help us achieve more in 2017.

For change leaders and project managers, the Change Planning Toolkit™ represents one of the most powerful new toolboxes to learn how to master for 2017 and beyond.

The Change Planning Toolkit™ is introduced in my latest book Charting Change from Palgrave Macmillan and designed to make the change planning process more visual and more collaborative in order to surface the hidden land mines as early as possible so they can be worked through, and to make the plan and progress against it more transparent as the project or change initiative progresses. And given that every project changes something, every project is a large or small change initiative!

There are many reasons the Change Planning Toolkit™ is worth far more than the small cost to acquire an individual education license for the toolkit to learn about the tools and how to use them. And organizations that empower their people with the tools in the Change Planning Toolkit™ will not only become more agile than the competition, but will also benefit in the five following ways:

  1. Beat the 70% Change Failure Rate
  2. Quickly Visualize, Plan and Execute
  3. Deliver Projects and Change Efforts on Time
  4. Accelerate Implementation and Adoption
  5. Get Lots of Valuable, Powerful Tools for a Few $$$

There are licensing options for every situation.

Change practitioners and independent consultants can get an individual educational license to get comfortable with the tools in a 11″x17″ format. Upgrading to a site license will get you access to the poster size versions of key tools. Consulting firms and organizations of 100+ employees will find site licenses less expensive.

Site licenses are very affordable, starting at $2/year per employee and up, after the payment of a small license setup fee. Consulting firms will be able to use the tools to increase their revenue with clients, and companies will increase the speed and success of their change initiatives.

Independent consultants, consulting firms, and educational institutions can sign up as resellers and earn a 10% commission on all subsequent license sales.

The Bronze version of the Change Planning Toolkit™ is available now, and the Gold version will become available in the near future.

Public and private train the trainer sessions are available upon request.

Or you can kick off your next organizational change effort in style using the Change Planning Toolkit™ with me as the facilitator and start getting a jump on your competition.

  1. Click here to purchase an individual educational license
  2. Contact me to purchase a site license, to host a training session, or to book a facilitation

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Building a Strong Foundation for Change

Charting ChangeRecently I had the opportunity to sit down and have a chat with Will Sherlin of 3PillarGlobal about my latest book Charting Change on The Innovation Engine podcast.

In this conversation we focused on how to make change efforts stick within any organization. Among the topics we discuss are how non-software companies can still benefit from Agile methodologies, how to develop actions when the desire to make changes reaches a groundswell, ways to make changes seem less overwhelming and more human, and several other topics of organizational change, digital transformation, and innovation success. You can find the interview here on SoundCloud:

Most of what we talk about in this interview is highlighted in my latest book – Charting Change: A Visual Toolkit for Making Change Stick and my first book Stoking Your Innovation Bonfire: A Roadmap to a Sustainable Culture of Ingenuity and Purpose, the keynote speeches and workshops I deliver around the world on the topics of innovation, change, and digital transformation, and in the revolutionary Change Planning Toolkit™.

The Change Planning Toolkit™ contains more than 50 visual, collaborative tools to help you beat the 70% change failure rate. You can get the listed number of tools from the Change Planning Toolkit™ by doing the following.

(10) – Visit the free downloads page
(26) – Buy the book
(50) – Purchase access to the Change Planning Toolkit™ (comes with a QuickStart Guide)

P.S. Site licenses for the Change Planning Toolkit™ and public and private training events are also available

Charting Change Quote Braden Kelley

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Testing My Personal Limits with Innovation

Physiclo Basketball Resistance Tights

A few months ago I came across an article in Engadget about Physiclo, a startup company launched to provide resistance clothing for athletes. I’m assuming their name Phyisclo is a mashup of the words physical + clothing. Cute.

As a basketball player for which height and youth are not advantages (I’m about 5’8” and a bit past my 21st birthday – just how far past you’ll have to guess), endurance, guile, and a reliable mid-range game are about the only advantages on the court I can hope for.

Given that, in the past I’ve tried ankle weights and weight vests as ways to try and increase my speed, quickness and vertical leaping abilities. From experience I can tell you that ankle weights will injure you and weight vests can be uncomfortable. Jump shoes always seemed dangerous as well, and so after a while I went back to just playing basketball without any gadgets and began readjusting to the idea that I might never be able to increase my athleticism, only my fitness.

But after seeing an article about Physiclo and their resistance clothing for athletes, and thinking through the value proposition both as an athlete and as an innovation professional, I started to think it was worth investigating. I was intrigued because the Physiclo offering is not some wonky gadget that required me to change my behavior, but instead allows me to wear something I was already wearing – compression tights.

So I reached out to the company and began corresponding with the company, and a few weeks later a pair of Physiclo compression tights for me and a pair of Physiclo compression shorts for my grade school AAU basketball playing daughter arrived in the mail (there is your full disclosure). We had every intention of setting a baseline for baseline to baseline speed and vertical leaping ability and to measure every 30 days over a 90 day period, but our local YMCA closed and moved to a new facility after the 30 day measurement and the court size changed and we lost our vertical leap measurement board on the wall. I can tell you that at the 30 day mark we were both getting modestly faster after 30 days, but neither of us recorded any improvement in vertical leaping ability. This was even with a week gap in our workout regimes during that first 30 days because of a family vacation.

Physiclo basketball Dribble

Qualitatively, the first week I wore the Physiclo resistance tights to play 60-90 minutes of basketball (per gym visit) they kicked my ass (to use a technical term) and the same was true after a week of vacation (which ended up meaning nearly a two week gap for me). I got winded easier, my leg muscles fatigued faster, and were more sore afterward than without wearing the Physiclo tights. It took me about a week initially and after vacation to get used to the extra demands they put on my body again. After that, post Physiclo workout fatigue and soreness was the same as without Physiclo, and I felt like my body adjusted and my in game performance only decreased slightly. One other benefit I noticed from Physiclo was that after wearing them for a week or two I was able to power up the hills of downtown Seattle that used to feel like more of a struggle.

My daughter also says she feels the extra effort required when she wears them in practice/training and I’ve seen her get faster in games (when she doesn’t wear her free Physiclo resistance shorts – men’s extra small). She moves better than she used to, and the other girls get tired before she does.

And for me, the impact of wearing my Physiclo resistance tights (sent to me for free) is that I have yet to play without them because every time I think about doing it so I can blow by people, that thought is overpowered by the thought that I won’t get as much out of that workout. So, on goes Physiclo.

I reached out to the Physiclo founders because their invention looked like a potential innovation suitable for profiling to the innovation community here.

As a reminder, my definition of innovation is as follows:

“Innovation transforms the useful seeds of invention into widely-adopted solutions valued above every existing alternative.”

Is Physiclo an innovation?

Absolutely!

For anyone looking to get faster or to get more out of any workout or training that involves running, I can’t think of a more practical and effective training aid. Prices are in the $100-130 range and available on Amazon or Physiclo web sites.

Four thumbs up!

Image credit: Physiclo.com

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Taking Four Different Paths to Innovation

Taking Four Different Paths to InnovationInterview with Gijs van Wulfen

I had the opportunity recently to interview fellow Innovation author Gijs van Wulfen to talk with him about his new book The Innovation Maze, which is a follow-up to his great first book The Innovation Expedition.

1. In the book you cite a study saying companies reported a drop in breakthrough ideas between the mid 1990’s and 2010. What do you attribute this drop to?

The share of breakthrough new products has been halved in the last decades from 20.4% in the mid-1990s to only 11.5% in 2010. Companies tend to prefer incremental innovations in small steps over breakthrough innovations in big jumps as they can be implemented faster with less perceived risk and fewer resources needed. Just take a look at how innovation budgets are spent: 58% of R&D spending is directed at incremental or renewal innovations, 28% at new or substantial innovations, and only 14% at breakthrough or radical innovations. It seems there’s a growing dislike for risks what causes incremental innovations to dominate. I like to quote the CEO of BMW AG, the German luxury car producer, Dr. Ing. Norbert Reithofer. When asked why BMW started the risky E-car project with the BMWi-3 and i-8 he responded very openly: “Because doing nothing was an even bigger risk.”

2. At the beginning of your book you highlight “15 Obstacles Hindering Innovation At Its Start”, if you could only eliminate three, which three would you choose?

Actually my personal goal is to eliminate all 15 obstacles which hinder innovation at the start, Braden. With the right approach, I even think it’s possible too. That’s why I’ve written The Innovation Maze. If I could eliminate three, I would choose the ones which are hindering people in organizations the most:

  1. No priority for innovation. This is relatively easy to solve, as you only have to pick the right moment. Never present a new radical innovation project to your board when business is going up fine.
  2. No market need. The biggest problem for start-ups or R&D-projects in big firms is that they provide solutions without a problem. Connecting to customers and matching potential solutions with relevant customer frictions at the start of innovation is essential. With out a customer need there is no market.
  3. No business model. Innovations are not viable without a business model. Experimenting with pretotypes or prototypes in the early phases of the development process is essential to test if your business model is viable.

Gijs van Wulfen3. Google no longer does 20% time, why do you think that is?

In 2013 Google began cutting back on their policy to give employees 20 percent of their work time to pursue projects they are passionate about, even if it is outside the core job or core mission of the company. They replaced it with a more focused approach to innovation instigated by CEO Larry Page. It resulted in more tightly targeted innovation activities, rather than the ‘scattergun’ innovation approach that was created by Google ‘20% time’. I am a fan of focused innovation, as this will increase the chance of success as less projects will get better people and more funds. It fits better Google, as a big company, with more than 60.000 employees.

4. People love to ideate and often equate ideation with innovation (which they shouldn’t). What tips would you offer to help people have a great ideation session?

Well, I have found 25 elements which are necessary creating a perfect ideation session:

Highly relevant
— Define a relevant innovation assignment, which is a challenge for the organization and the people you invite.
— Make the assignment concrete and s.m.a.r.t.
— Create momentum for ideation. Something important must happen now!

Diverse group of participants
— Invite people for whom the assignment is personally relevant.
— Invite people for both content as well as decision-making capabilities.
— Include outsiders and outside-the-box thinkers.
— Include an even mix of men and women, young & old, et cetera.
— Invite the internal senior problem-owner (CEO or vice president) to participate.

Special setting
— Look for a special and harmonious venue, fitting your innovation assignment.
— Create an (emotionally) safe environment where you can be yourself.
— Don’t allow smartphones and iPads to ring or flash.
— Never- and I really mean never do any brainstorming at the office.

Effectively structured process
— Allow at least two days for effective ideation to reach concrete new concepts.
— Spend twice as much time on the convergence process as on the divergence process.
— Plan and prepare an effective combination of idea-generating techniques.
— Be open to suggestions from the group to adapt the process.
— Make sure it is enjoyable. Fun promotes good results.
— Time box. Make sure everybody is aware of the time limits- and sticks to them.
— Hire a visualizer or cartoonist to visualize the results
— Keep up the pace; otherwise it becomes long-winded and boring.

Facilitated by a professional
— Appoint an (internal) facilitator, who stays in the background and exercises light control.
— The facilitator should reflect the opposite energy of the group. If the group is too active: exert calmness.
— The facilitator mustn’t lose sight of sub groups; constantly monitoring their progress.

Concrete output
— Make the output very concrete and clear to anybody.
— Creating concepts together with your colleagues generates maximum internal support.

The experience of sharing ideas in a structured process and drafting concrete concepts from the best ideas has a great impact on group dynamics. At the end the whole group feels ownership of all the concepts. That is essential. New ideas need a lot of ‘parents’ to survive the product development process in a corporate culture.

4 Different Paths to Innovation

5. Where do you stand on breakthrough innovation vs. incremental innovation debate?

Should you focus on incremental innovations, radical innovations, or both? This depends on your role and situation. Startups mostly enter a market with a radical innovation. Facebook, and Twitter created new markets with new-to-the-world offerings. Tesla, Uber and AirBnB broke into existing markets surprising the incumbents with their new-to-the-world offerings. Existing organizations are mostly reactive innovators, which puts them in the situation where they have to quickly come up with innovations as the urgency is high. For them, incremental innovations are faster to develop with less risk. However, that won’t be enough in the long term as they also have to come up with radical innovations in order for their organization to grow again in the longer term. It’s essential that you find a good balance between incremental innovations, improvement of present products and services, and radical innovations focusing on big ideas which are outside the present comfort zone of your organization. With incremental innovations you prove to your customers and staff that you indeed can innovate and thereby build the confidence you will need to make bigger strides, once your radical innovations hit the market later.

6. Why is ‘checking for fit’ so important? What do people risk if they skip this step?

When you (and your innovation team) have come up with great ideas the question is how to make them reality. In practice, I have learned that if they don’t fit your personal goals as a start-up founder or your organizational goals as a corporate innovator, nothing will materialize in the end. It is essential to check this fit as early as possible in your innovation journey. If you skip this step you can almost be certain that someone will stop you later. The best excuse ever for risk-avoiding-bosses is “it doesn’t fit the strategy”.

7. Understanding customers is of course important, so what are your favorite tools for achieving customer understanding?

My three favorite tools for understanding customers are: customer journey mapping, identifying customer frictions and lead-user research. With the first one you identify all the factors influencing the customer experience from the customer’s perspective in a customer journey map. This is a great technique to use in service innovation, as a service is often so intangible and the user experience is actually your offering. The second technique identifies customer frictions via focus groups. This is a very practical technique which you can use in any innovation project to get to know a better understanding of your customers likes and dislikes. The third one is lead user research. Identifying the behavior of lead-users and co-creating with them is intensive and time-consuming and especially useful when you want to discover unmet latent needs and create more revolutionary ideas.

8. What is the best way for people to document the business case for an idea?

For more than 10 years, I have been using and giving instructions on a handy, practical framework for a new business case. My advice is to just use PowerPoint (or keynote) instead of writing a full written report, as nobody will read it anyway. Here’s the framework of a seven (7) page new business case, which you can present in 20 minutes at the most.

Slide 1. The Customer Friction.
— The customer situation.
— The customer need.
— The customer friction (problem/challenge).

Slide 2. Our New Concept.
— The customer target group (qualitative and quantitative).
— The marketing mix of the new product, service or business model.
— New for…. (the world, the market, our company).

Slide 3. This Makes our Concept Unique.
— Buying arguments for the customer.
— Current solutions and competitors.
— Our positioning.

Slide 4. It will be Feasible.
— We are able to develop it.
— We are able to produce it.
— The development process.

Slide 5. What’s in it for us.
— The number of customers (in year three).
— The projected revenues (in year three).
— The projected profits (in year three).

Slide 6. Why now?
— Why to develop it now.
— What if we say no.

Slide 7. The Decision to Proceed.
— The major uncertainties.
— The development team,
— The process, costs and planning.

Thanks for the interview Braden. I wish everybody great – and successful journeys through the innovation maze.

Thanks to you Gijs for sharing your insights with our global innovation community!

To learn more about Gijs’ four paths to innovation, grab yourself a copy of his new book his new book The Innovation Maze.

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Are you an expert?

I came across this video recently thanks to my friends at BLT who recruit consultants for firms in London and beyond.

It pokes fun at the experience many internal and external consultants face with clients, whether we are working on an innovation project, technology project, or some other kind of project.

So, I encourage you to check out the video for a chuckle and to leave a comment below:

How does this reflect your experience of being called upon as an “expert” by a project team?

Or your experience working in the consulting industry and meeting with potential clients in a pre-sales situation as the subject matter expert there with the partner and/or sales guy?

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Consulting Industry Faces Threat From Artificial Intelligence

Consulting Industry Faces Threat From Artificial Intelligence

Previously I explored the value of eminence and thought leadership to consulting firms, and how unfortunately the power of inbound content marketing has a dark side that forms part of a three-pronged attack on the consulting industry.

Meanwhile, the tireless invention and innovation efforts of research teams in companies around the world have helped to keep the pace of technological advancement in computer processing power at or above Moore’s Law for several decades. This has given technology companies the ability to put more computing power than the entire Apollo space program into the pockets of more than a billion people around the world.

It seems like everything has become digital, including music, books, and even movies. Increasingly intelligent digital technologies and mercurial customer expectations threaten both people and enterprise at every turn. With all of this technological change, the last few decades have been an amazing time for consultancies, full of revenue and opportunities. Clients desperate for solutions to help them cope with these challenging times helped management consulting firms grow in size and scale, expanding to cover multiple technology, and even marketing, specialties.

But the same technologies that have led to the growth of consulting companies over the last couple of decades, will begin to lead to a shrinking of those same consulting firms. The increasing diversification of the large global consultancies into other specialties is the first step to what is an inevitable shrinkage forced upon the industry by the three factors I detailed in my last article titled Consulting Industry Caught in the Crossfire.

The same forces that are causing a feeling of disequilibrium for the firms that consultancies serve are also causing the same unease, trepidation and challenge for the consulting firms themselves as they find themselves attacked on three sides from:

1. Increasingly Available Intellectual Property
2. Internal Consultants
3. Artificial Intelligence

In my previous article on the Consulting Industry Attacked on Three Sides I looked at each attack in turn, but in this article I would like to dig a bit deeper into the final threat.

Artificial Intelligence

Roboadvisors, chatbots, and other implementations of artificial intelligence have captured people’s imaginations and led to both an increase in the number of articles written about artificial intelligence, but also in the practical implementations of artificial intelligence. People are becoming increasing comfortable with artificial intelligence thanks to the recommendation engines on Amazon and Netflix and IBM Watson’s appearance on the game show Jeopardy and battles against chess grandmasters.

But what does consulting have to fear from artificial intelligence?

Perhaps viewing this short video might give you a glimpse:

In the short run, maybe consultants don’t have as much to fear from artificial intelligence as workers in transportation, retail, or manufacturing. But, in the grander scheme of things, over time enterprising technology vendors will inevitably build upon publicly available artificial intelligence frameworks made publicly available by companies like Microsoft and Google (who are seeking to increase the sale of cloud services) to automate some of the tasks that recently minted undergraduate analysts or Indians perform now for the large consulting firms.

What we are starting to see is exactly what Roger Martin described in his landmark book The Design of Business, from which I would like to highlight one of the key concepts called The Knowledge Funnel highlighted in the image from the book below.

Knowledge Funnel v2
Source: The Design of Business by Roger Martin

The key point here is that as we understand our business and our interactions with our customers well enough, what was once a mystery we start to identify patterns inside of (heuristics), which then eventually allows us to create algorithms that can be captured in Standard Operating Procedures (SOP’s) and then eventually in code. The power of artificial intelligence is the ability to move the role of the machine to the left in The Knowledge Funnel, away from pure manual coding by a human, to computer programs that write themselves and eventually to heuristic identification and algorithm creation at some point in the near future. This is what crowd computing, machine learning and deep learning ultimately make possible, and which I explored in a previous article titled Welcome to the Crowd Computing Revolution in more detail. The fact remains that as computer programmers and the artificial minds they create become more adept at watching the work that consultants do and recognizing the patterns in their recommendations, the pressure on consultancies will build.

Conclusion

These are challenging times for large consultancies and small independent consultants as consultancies are forced respond to these attacks from three sides. Part of that three-pronged attack will come from a growing legion of automation engineers taking to cubicles around the world to design people out of jobs. In the same way that mechanical engineers build robots to replace our human muscles with machine muscles, automation engineers are computer programmers tasked with creating inexpensive machine minds with sufficient artificial intelligence to replace our more expensive human minds. Professions like that of the automation engineer will attract increasing numbers from workforces around the world, but not nearly enough to offset the losses in job opportunities that these individuals are tasked with eliminating. Only time will tell how quickly and how broadly artificial intelligence (AI) threatens the core business of consultancies.

If you are in the consulting industry, what is your strategy for responding to this threat?

Because, make no mistake, the threat is real. The only question is how quickly it will materially impact your bottom line.

BONUS:

You might enjoy this interview with David Cope, the creator of Emi (Emily Howell) the algorithmic composer, whom he later killed:

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Consulting Industry Being Attacked on Three Sides

Consulting Industry Being Attacked on Three Sides

The worlds of employment and business are becoming increasingly turbulent as the stability of the enterprise grows ever shorter, the loyalty of the enterprise to its people faces extinction, and the wealthy countries of the world stand at a precipice of overhanging debt. Increasingly intelligent digital technologies and mercurial customer expectations threaten both people and enterprise at every turn.

One would suppose that this would be an amazing time for consultancies, full of promise and opportunities. One would imagine that clients desperate for solutions that help them cope with these challenging times would be banging down the doors of consulting firms outbidding each other to the firm’s next client.

But that is not the reality…

Because, the same forces that are causing a feeling of disequilibrium for the firms that consultancies serve are also causing the same unease, trepidation and challenge for the consulting firms themselves.

The fact is that the consulting industry is being attacked on three sides:

  1. Increasingly Available Intellectual Property
  2. Internal Consultants
  3. Artificial Intelligence

Let’s look at each threat in turn:

1. Increasingly Available Intellectual Property

In my last article, “How Much is a Thought Leader Worth?”, I wrote about the importance of thought leadership in today’s digital age and its role in helping to drive inbound sales leads.

Hiring a consultancy, even for a small project, is a big expenditure for most companies, something that requires several levels of approval before the project can begin. Given that, company employees take to the Internet to build their consideration set and to do their research into how each company thinks and who seems to be the leader in the space where they need help. For help with building an innovation or digital transformation strategy or process, often they find me.

The way that company employees find the companies they will include in their consideration set, and the individual (or firm) they will ultimately hire, is by finding and evaluating thought leadership created by consultants like myself who are good at creating frameworks and other tools aimed at simplifying complex concepts (referred to as eminence by some firms).

Because the discovery and evaluation of thought leadership by potential customers is a key way that independent consultants and advisory firms attract new business, and because it is easier than ever to create and share thought leadership while simultaneously becoming an increasingly important factor in the buying process, independent consultants and advisory firms are creating more pieces of thought leadership and eminence than ever before.

On the plus side, thought leadership and eminence help independent consultants and advisory firms to win business. The down side however is that in much the same way that kids in Hawaii have learned how to become professional surfers by watching YouTube videos, as advisory firms create more thought leadership and make it publicly available to win new business, they also stand to lose an accelerating amount of new business as well. The reason is that the proliferation of eminence and thought leadership will inevitably lead to:

  1. Increasing numbers of line managers feeling that they know enough to tackle the challenge themselves that they might have otherwise outsourced to a consulting firm
  2. Increasing numbers of senior leaders deciding that someone inside their company could spin up and lead an internal consulting group

2. Internal Consultants

Let’s face it, whether we like it or not, an increasing number of senior leaders are becoming fed up with spending $500/hr on newly minted MBA’s from McKinsey, Bain, BCG, etc. when they could hire them on full-time for $75-100/hr by taking one of their promising senior leaders and having them spin up an internal consulting group.

Many companies have already created internal consulting groups to handle the bulk of their strategic project work in order to either:

  1. Save money
  2. Increase responsiveness
  3. Increase speed to market
  4. Keep the knowledge gained from such projects readily accessible
  5. Create and retain a competitive advantage

For me, reason number five is potentially the most compelling reason because it is impossible to expect any large consulting firm to unlearn the insights they acquire on one consulting project and not leverage them on a subsequent project with a competitor somewhere down the line. Doing projects with your competitors is how a great deal of industry expertise is gained by large consultancies, and this expertise is one of the primary reasons that managers hire a consulting firm.

3. Artificial Intelligence

Roboadvisors, chatbots, and other implementations of artificial intelligence have captured people’s imaginations and led to both an increase in the number of articles written about artificial intelligence, but also in the practical implementations of artificial intelligence. People are becoming increasing comfortable with artificial intelligence thanks to the recommendation engines on Amazon and Netflix and IBM Watson’s appearance on the game show Jeopardy and battles against chess grandmasters.

But what does consulting have to fear from artificial intelligence?

In the short run, maybe not a lot. But, in the grander scheme of things, over time enterprising technology vendors will inevitably build upon publicly available artificial intelligence frameworks made publicly available by companies like Microsoft and Google (who are seeking to increase the sale of cloud services) to automate some of the tasks that recently minted undergraduate analysts or Indians perform now for the large consulting firms.

Conclusion

These are challenging times for independent consultants as they respond to these attacks from three sides. Only time will tell how quickly and how broadly artificial intelligence (AI) threatens the core business of consultancies. The internal consultancy threat is real and growing in scope and threat. What may have started in Project and Portfolio Management (PPM), Six Sigma, Lean and Agile practices in some organizations, is quickly expanding into other Operational Excellence areas and even into Innovation, Digital Transformation, and traditional Strategy. Increasingly available intellectual property poses a Catch-22 for consultancies as a refusal to participate in the creation of eminence and thought leadership will lead to less business in the short-term, but doing so will certainly over time lead to an overall reduction in the size of the market for consulting services. Some consultancies are responding by diversifying their service offerings, attempting to create consulting superstores. What will be your response to this attack from three sides?

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Amazon Changes Everything in a New Way

Tide Dash Button

The arrival of the Internet began major disruption to decades old methods of consumer packaged goods (CPG) distribution. The tried and true method of manufactures selling to a collection of wholesalers, who then sold the product on a range of retailers began to be reexamined. We saw the arrival of online retailers like Amazon who sought to compete with brick and mortar retailers, trying to offer a wider selection while also offering potentially a more convenient (and possibly cheaper) shopping experience for a few (or possibly for many). We saw retailers experiment with selling on Amazon (adding an extra layer of intermediation) and grocery stores experiment with online ordering and local delivery.

But at the same, in 2010 we saw manufacturers like P&G start to experiment with selling direct to consumer over the Internet via sites like pgshop.com and then in 2013 P&G started selling their wares on Amazon. Below is a screenshot of a Pampers product listing on Amazon:

Pampers Amazon Screenshot

As you can imagine, when companies like P&G start selling direct to consumers and via Amazon, this makes traditional retailers nervous. And while maybe some day their nervousness will translate into major volume declines, we’re probably not quite there, yet. But for manufacturers, the possibility of selling direct to consumers or via Amazon changes everything. It changes everything because it requires companies selling consumer goods to build new marketing capabilities, and possibly even new manufacturing and distribution capabilities as well.

Frito Lay Amazon Box

Here we have an example of a Sweet and Salty Box being sold to consumers via Amazon by Frito Lay. Compare this with a P&G Pampers page on Amazon and you’ll see that Frito Lay is still learning how to market via the Amazon channel and hasn’t completely figured out how to optimize the experience they create for consumers or likely how to maximize their conversion. But, you may also notice that the Amazon channel offers Frito Lay the opportunity to sell something they probably couldn’t sell in a Krogers, or Whole Foods, or Tesco, or 7-11.

In both of these examples, Amazon is taking and selling the inventory much as a grocery store would, but the customer wants, needs and expectations in the Amazon channel are different, and the skills to effectively market in this channel are different too. These are the reasons that Amazon changes everything for CPG companies. As Amazon continues to grow in importance as a channel for nearly everything, and as other sites like Facebook make a stronger push into eCommerce, and as consumer preferences for where and how they want to buy things changes, it presents a great opportunity for the forward thinking among us to take existing products and create new offerings that resonate with consumers showing a preference for existing and emerging digital channels and to create entirely new solutions that may involve a new product or possibly move beyond a product. Companies in CPG must continue to ask themselves:

  1. What is possible online that isn’t possible in-store?
  2. What do online shoppers want that is different than in-store shoppers?
  3. If we were to move beyond the confines of the product (and how it is packaged and presented), what would resonate with this type of consumer?

You can see on the Pampers page on Amazon above they’ve done a number of different things without changing the product:

  • Offering a range of product quantities
  • Coupons
  • Amazon Dash buttons (push the button and it automatically orders for you)
  • Etc.

And Frito Lay took their existing products and re-packaged them in a different way to suit the capabilities and needs of the channel because selling one individual bag of Doritos doesn’t make economic sense (and so Amazon won’t let you do it unless it is part of a larger Prime Pantry box).

If you were in charge, and had the product range that P&G or Frito Lay have, what would you do to optimize your results in the Amazon channel, or even more broadly in a direct to consumer context?

Please add your comments below.

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Charting Change – eBook Now Available

Charting Change is Number OneI’m super excited to announce that my new book Charting Change is now available in English as both a hardcover and as a Kindle eBook at various Amazon sites around the world (USA, UK, CA, AU, DE, FR, JP) and now the traditional eBook is also now available!

Charting Change has been the number one new release on Amazon for at least “Business Management” and “Production & Operations” so far. It also was the #2 new release for “Organizational Change” and probably #1 too (but I think I missed getting a screenshot).

For those of you prefer to read digital books instead of hardcovers, you can get the Kindle version or get an eBook at the following places:

  1. My publishers web site
  2. Google Play store

For those of you who already have the book, I hope you are enjoying it and leave an Amazon review when you finish! 🙂

Please feel free to ask questions about the book below.

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