Why Counseling Matters – A Historical Perspective

Management consulting has often been the target of criticism, with popular bricks such as exorbitant fees, huge contracts, secretive working methods and an apparent ability to make money in a crisis. However, most decision makers and executives recognize the value that top management consultants provide, and the industry continues to thrive, with compound annual growth rates exceeding 4% per year over the past 10 years. The global management consulting market is now worth around $150 billion, and most major companies have survived the COVID-19 crisis remarkably well.

But what is the exact nature of the value of management consulting? Isn’t consulting just providing a service similar to that of the accounting or legal profession? Or does it offer something bigger than that – another kind of value?

In this article, we explore some of the ways management consulting has helped shape the world we live in today, as the story of ADL illustrates. As the world’s leading management and research consultancy, ADL has pioneered many approaches that have helped the industry grow, innovating repeatedly throughout its 135-year history.

The birth of management consulting

Management consulting was born in October 1886, when Arthur Dehon Little, a gifted 23-year-old chemist and somewhat of a philosopher, founded the company that would become ADL with his friend and colleague Roger Griffin. Here is how he introduced their unique service:

“Allow us to draw your attention to the CHEMICAL LABORATORY which we have established at 103 Milk Street, Boston…Mr. Griffin and Mr. Little have many years of experience in commercial scale chemical process development and are ready to undertake, either in their own laboratory or on site, research for the improvement of processes and the perfection of products.

At the end of the 19th century, the industrial revolution was still in its infancy and research was widely considered an academic activity. Yet Arthur saw the enormous potential of what would become “applied research” and preached his message of its benefits to industry and society with missionary zeal. In 1905, he wrote that his firm’s research applied to:

“Each waste avoided or turned into profit, each problem solved and each more efficient process that enables a better life in the material sense and a cleaner and healthier life in the higher sense.”

These words still have remarkable resonance today as we continue to embrace technological innovation to help address the world’s economic, social, health and environmental challenges.

The early years of the firm’s pioneering consulting activities are well documented, with a succession of groundbreaking innovations during its first 25 years. An example is the development of viscose, which resulted in the creation of non-flammable motion picture film (the rights to which were sold to Eastman-Kodak) and acetate fiber – artificial silk. This later led to one of the best-known events in company history, when in 1921 ADL made a silk handbag from a sow’s ear (actually , from 100 pounds of sow ears, rendered and chemically treated). The silk handbag is now part of the collection of the Smithsonian Institute.

“Who said it was impossible?” – the rhetorical question used to promote the project – became part of the company’s DNA and has remained so ever since.

Help shape the industrial age

During the lunar run of the late 1960s, the company partnered with NASA, designing five key experiments and developing innovations for the protection of astronauts. One of them, the laser ranging reflector, is still used to this day to measure the precise distance between the Earth and the Moon.

In 1968, ADL designed the NASDAQ stock exchange systems for London and Tokyo. In 1975, the company patented a more efficient and economically viable scroll compressor, finally bringing refrigeration to the masses. The company was an early leader in the development of modern telecommunications in the pre-digital era, starting in 1974 with the Kingdom of Saudi Arabia, for which ADL developed one of the most advanced in the world of his time. In 1980, ADL produced the European Commission’s first white paper on telecommunications deregulation, having completed the world’s first database of installed telephones, markets, technical trends, services and regulatory information.

During the first two decades of the 21st century, digitization has become central to businesses in virtually every field, and ADL has remained at the forefront of digital innovation and transformation. Over the past five years, ADL has helped cities like Dubai and Stockholm transform into sustainable “smart cities”. During the COVID-19 pandemic, ADL has helped organizations respond to the crisis and adapt quickly, including new tools based on artificial intelligence and machine learning to dynamically monitor and respond to risk.

Four reasons why counseling is important

Not all consulting firms are the same, but we can still draw general conclusions about how consulting contributes to the world.

1 . Counseling Helps Achieve Breakthroughs That Wouldn’t Happen Otherwise

It’s a big claim, but a real one.

One of the main obstacles to achieving significant breakthroughs within a large organization is the difficulty of dealing with disruptive innovations that create new markets and customers outside of the established base. The threat of destruction of the current core business and the power of current brands often leads to the phenomenon of “tissue rejection” when such innovations leave the laboratory.

Consulting firms can play a critical role in incubating and scaling breakthrough innovations into proven and sustainable new businesses, circumventing business headwinds that might otherwise impede them. The ability to quickly mobilize a partner ecosystem comprising the best experts and service providers in the world is the key to success.

2. Consulting helps realize the potential of industry convergence

Convergence across traditional industry boundaries has been accelerated by digitalization. Today, food companies are active in healthcare, telecommunications companies in media, and automotive companies in energy. Great value can be created at the boundaries between industries, which are often where innovation tends to occur.

Because consultancies like ADL work in innovation across many different industries, they are uniquely positioned to identify and exploit these areas of convergence, in ways that a single firm is less able to do.

For example, leveraging its expertise and experience in the automotive and energy industries, ADL recently helped an automaker launch a seamless electric vehicle charging solution for hardware, installation and green energy services; it is a fine example of the convergence between transport and energy.

3. Consulting helps bring big ideas to life

It is true that if innovation fails, it is generally not for lack of ideas. There are good ideas everywhere, both inside and outside of any typical business, but the bigger issue is how to bring them to life in practice, especially alongside existing business operations. Similarly, the easiest part of any major transformation or change is crafting the vision and crafting the plan – the hardest part is making it happen.

The board has a vital role to play in overcoming these obstacles. By providing dedicated experts who understand how to work productively side-by-side with a company’s own resources, major changes can be made together. Thus, the best consulting firms allow companies to achieve goals and ambitions that they could not have achieved on their own.

4. Counseling can be an effective force for good in society

Consultants are service providers and generally have to do what clients want them to do. However, they are not mere “passengers”, without an opinion on the customer or on the impact of their activity on the world. The best management consulting firms operate with sound principles and rules that safeguard their own independence, objectivity and integrity.

Strategic consulting firms are in a unique position to positively influence business leadership. This can be done by holding up a mirror to highlight bad practices or operational shortcomings, sharing examples of best practices, or helping to improve the social and/or environmental impacts of a company’s operations. A good consultancy with the right client relationship should be a trusted advisor, able to be both candid in providing feedback and nurturing in advising on goals and objectives.

Conclusion – The board needs an open culture

Looking back on ADL’s history, it’s impossible not to feel an immense sense of pride in the unique contributions the company has made to business and society over the past 135 years.

Of course, there is no room for complacency. Consultants often have privileged access to highly sensitive information, requiring the highest standards of professional practice. The consulting industry must also constantly ensure that the attractiveness of client fees does not compromise its integrity.

Consulting matters a lot to the future of the world, but the industry needs to do more to ensure it is recognized by the public as a force for good with an open culture, rather than a closed shop floor generating profits for some.

Written by Rick Eagar.

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