A couple of weeks ago we lost Professor Clay Christensen of HBS, an exceptional management scholar and teacher. Christensen was best known for his ground breaking work on how traditional industries are disrupted by innovation. For example, Apple’s iPhone (“a computer in your pocket”), Google’s search capability, Facebook’s advertising platform, and Tesla’s electric cars have all transformed traditional industries.
One of Christensen’s more influential writings, though less well-known to the general public, took direct aim at consulting. He and his co-authors made the case that management consulting would divide into a few firms that earned high fees for creating real strategic value for their clients, and many firms that would play an increasingly tactical and implementational role, and for whom fees would remain under pressure by new forms of competition.
That new competition is the freelance revolution. New talent marketplaces like BTG, the Business Talent Group, offer expert independent management consultants with the specific experience that large firms need, and increasingly sophisticated client companies demand. And, the impact on traditional consulting firms has been increasingly noticeable. The best known firms are not just taking greater notice; this is a coopetition where the clients of BTG, and similar firms like Catalant, Flexing It, Outsized, Weem, and Expert360, typically include both large corporates and big consulting.
This past month BTG published its 2020 High-End Independent Talent Report describing the areas where freelance management consulting expertise and freelance interim executive roles are most in demand. As BTG’s Marketing VP Jennifer Napier pointed out in a recent conversation, “It’s very clear that executive interest in independent management consulting continues to grow across industries and an increasing range of functional areas.” Here are the highlights of that report.
Top 10 Industries: Areas like corporate services, healthcare and private equity and venture funding have doubled their use of freelance management consultants in the past year:
Life Science
Financial Services
Consumer Goods
Technology
Services (B2B and B2C)
Private Equity and Venture Capital
Industrial Goods and Services
Healthcare
Insurance
Retail
Top 10 functional clients: Several functional areas increased their use of freelance management consultants. The top 10 areas are:
Strategy and Internal Consulting Groups
Marketing
Operations
Human Resources
Business and Corporate Development
Procurement
CEOs and Presidents (interim leadership roles)
Digital and Tech
General Managers and P&L Leaders (interim leadership roles)
Innovation and R&D
Buyers: A majority now of buyers of freelance management consulting services are at the executive level. This continues the evolution of executive interest in alternatives to the traditional consultancies.
C level ~ 20%
VP ~ 40%
Director and Below ~ 40%
Work emphasis: Strategy development and operational improvement are far and away the largest areas of freelance management consulting. While the percentages vary somewhat from industry to industry, the overall trends are as follows:
Strategy Development and Planning ~ 40%
Operations ~ 30%
Transformation ~ 10-20%
Organization Design and Analysis ~ 5-10%
Interim Executive Roles ~ 5-10%
Most in-demand projects: The most in-demand consulting gigs follow work emphases described above; marketing and sales strategy is #1, and business process improvement is a close # 2.
11% Marketing and Sales Strategy
11% Business Processes
8% Opportunity Assessment
8% Planning
7% Interim Executive
7% Business Intelligence and Analytics
7% Growth Strategy
7% Product Strategy and Launch
Most in demand skills: Project management (including PMO) and strategic analysis and planning expertise are among the most in-demand skills.
14% Project Management
7% Market Analysis
5% Process Optimization and Transformation
4% Advanced Analytics
4% Change Management
3% Program Management Office (PMO)
3% Growth Strategy
3% Strategic Planning
Interim leadership gigs: Freelance management consultants or freelance executives providing interim leadership is a growth area in freelance consulting. Here are the positions for which interims were most sought.
CFO 50%
CEO 13%
CTO or CIO 12%
CMO 10%
CHRO 6%
Other roles 9%
Examples of current or recent interim leadership roles:
• An interim CTO with startup experience to help strategize and design a new piece of software
• An interim-to-hire CFO to lead the finance function of a private equity firm’s portfolio company
• An interim CHRO to develop and implement new processes, during a departmental restructuring
• An interim Head of Corporate Affairs to build a reputational risk strategy
• A senior leader to lead licensing and M&A arrangements during the company’s acquisition
Work locations: Unlike tech freelancing, where remote work arrangements are typical, freelance management consulting marches to a different beat: in-person interactions still matter to most F1000 companies—with only 17% of executives interested in remote-only work arrangements for high-end talent.
• 83% Mix of on-site and remote
• 17% remote only
Different industries, variations in remote only work: PE/VC, Consumer, and Industrial were most open to remote work arrangements.
11% Life Science
13% Financial Services
29% Consumer Goods
18% Technology
11% Services (B2B and B2C)
37% Private Equity and Venture Capital
27% Industrial Goods and Services
16% Healthcare
6% Insurance
4% Retail
The bigger picture
As usual, BTG has put together a thoughtful and informative update on the progress of freelance management consulting and freelance interim executive roles. Their summary of overall findings is as follows:
“Notable trends in BTG’s 2020 report include the rise in process-related projects as companies seek to transform management and operations to grapple with radical shifts in the business landscape, increased reliance on high-end independent talent for advanced analytics skills that are difficult to source in the full-time market, and project management’s continued streak as the #1 skill most requested across industries.”
My overview describes the main findings but there is a good deal more insight to be gained from reviewing the larger BTG report. It provides not just additional stats but helpful industry-specific analyses and illustrative projects. The report is an excellent source of information on the freelance management consulting sector within the larger freelance revolution.
Sourced from Forbes - Contributed by Jon Younger