Consulting is dead – long live mentoring! Why classic business concepts fail and what works instead – Image: Xpert.Digital
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Why tried and tested business methods fail today and what works better
In an era of rapid change and increasing complexity, traditional management consulting faces fundamental challenges. Despite the industry's continued growth, there are growing indications that traditional consulting approaches no longer meet current demands. At the same time, new models of collaboration are emerging that focus on support rather than pure consulting. This report analyzes why many classic business concepts fail and which alternative approaches offer better prospects for success.
The crisis of traditional management consulting
Management consulting has been a rapidly growing industry for decades, but it is increasingly coming under critical scrutiny. Despite its popularity as an employer and the high profile of top consulting firms like McKinsey & Company, Porsche Consulting, and Boston Consulting Group (BCG), evidence of fundamental problems in the traditional consulting model is mounting. Numerous studies show that many consulting projects fail, millions of resources are wasted, and companies are sometimes even advised into ruin.
The consulting industry is at a turning point: While it remains attractive, the weaknesses of the traditional approach are becoming increasingly apparent. Stefan Dangel, Managing Director of ETECTURE, even goes so far as to claim that “classic management consulting will die out” if it does not fundamentally transform itself.
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Why traditional consulting approaches fail
The fundamental weaknesses
The reasons for the failure of traditional consulting approaches are manifold and deeply rooted in the structure and philosophy of the industry. The main causes include:
Lack of expertise and lack of interest
Clients often perceive consultants as lacking in expertise, while at the same time the clients themselves often show too little interest in the projects. This leads to a dysfunctional relationship in which the necessary support is lacking.
Insufficient resources and poor project management
Neither consultants nor clients often provide the necessary resources and information. Furthermore, there are shortcomings in project management and technical implementation.
Unclear expectations and communication problems
Unclear expectations and inadequate information sharing make collaboration difficult. In the worst case, consultants and clients work against each other instead of together.
Underestimation of internal resistance
Consultants often underestimate the socio-political aspects of an organization, which significantly complicates the implementation of changes.
The problem of standard solutions
A particularly critical point is the tendency of traditional consulting firms to rely on standardized solutions:
Selling short-term management trends
Traditional consulting primarily sells short-term management trends, which are often implemented in consulting projects without reflection.
“One-size-fits-all” approaches
Modern findings in organizational psychology emphasize the individuality and dynamics of organizations. Nevertheless, many consulting models are still based on the assumption that linear, one-size-fits-all interventions are the appropriate tool for shaping and changing organizations.
The addiction trap
The dependency that arises in many consulting projects is particularly problematic:
Prevention of organizational learning
Management consultants often hinder organizational learning. This is in line with their business model, as they take a shortcut from problem to solution without allowing the client company to achieve any learning – and thus remaining dependent on the consultant.
Follow-up orders as a business principle
Approximately two-thirds of all consulting engagements are follow-up engagements, which underlines this dependency structure.
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From consultation to support: A paradigm shift
The new role of the process facilitator
As an alternative to the classic consulting approach, the concept of process support is increasingly developing:
Definition of process support
The process support aims to enable the target group to learn independently. Participants are supported in developing themselves autonomously and responsibly. It is about shaping a shared development path.
Role of the companion
Process facilitators see themselves as temporary guides in shaping communication, decision-making, and change processes. They offer their process and methodological expertise and help to make the different perspectives of those involved visible.
Focus on self-reflection
In process facilitation, initiating self-reflection processes is central. Facilitators work with thought-provoking questions and methods that enable participants to develop new perspectives and solutions themselves.
Systemic approaches in organizational development
One particularly promising approach is systemic organizational development:
Definition of systemic consulting
Systemic consulting is a multifaceted consulting method that focuses on the relationships and interactions within systems – such as families, work groups, or social networks. It is based on the idea that individual behavior and problems cannot be viewed in isolation, but must always be understood within the context of the surrounding system.
Holistic approach
Organizational development based on systemic principles always incorporates the individual, team, and company levels, as well as their interactions, into the development process. Organizations are understood as social systems in which the behavior of the individual is influenced by the system and the development of the system by the individual.
Sustainable change
Systemic organizational development is understood as a continuous process, since the environment is constantly changing and companies must constantly adapt.
Successful support concepts in practice
Participatory processes
Approaches that rely on the active participation of all those affected are particularly promising:
FIT processes
Participatory optimization processes (so-called “FIT processes” for “Fair – Innovative – Transparent”) aim to implement structures that support stakeholders in developing independent solutions. These processes must always be designed as “self-sustaining processes”.
Joint solution development
As part of our business consulting services, we develop innovative concepts in the areas of work organization and human resources management in collaboration with all stakeholders within the company. The unique aspect of this approach is its participatory consulting methodology.
Coaching instead of consulting
The differences between coaching and consulting illustrate the paradigm shift:
Coaching vs. Consulting
While consulting makes expert knowledge and "best practice" solutions available with the support of an expert, in coaching the client is the expert. Through dialogue, the coachee learns to independently identify and solve their problems, thereby automatically internalizing the solution.
Empowerment instead of dependence
The coaching process empowers the coachee to further develop their attitudes and behavior in such a way that they can achieve effective results and use new techniques in the future that lead to problem solving.
The transformation of the consulting industry
New requirements for consultants and advisors
The transformation of the industry places new demands on consultants and advisors:
New perspective
Consulting in the digital age requires a completely different perspective. Instead of flying in from a bird's-eye view over the CEO's office, the focus must be on the ground floor – on how efficient and effective the units are that develop new products close to the customer.
Bottom-up instead of top-down
In the digital economy, innovations work bottom-up – in shorter product cycles and through direct exchange with the target group.
The role of in-house consultancies
One notable trend is the rise of in-house consultancies:
Increasing popularity
The results of the 2024 consulting ranking show a significant increase in the popularity of in-house consulting firms. Allianz Consulting secured first place in the in-house consulting segment and is among the top six management consultancies in the overall ranking.
Deeper industry knowledge
In-house consultancies, through their direct integration into the company, can often develop a deeper understanding of the specific challenges and the corporate culture.
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The Importance of New Work and Diversity
In addition to methodological changes, content-related priorities are also gaining in importance:
Key factors in choosing an employer
The results of the Consulting Excellence study clearly show that the factors “Diversity” and “New Work” play a significant role in the choice of employer.
Focus on well-being
Successful support concepts lead to a resilient corporate culture that focuses on both the organization and its individual employees. This not only promotes performance but also innovation and the well-being of everyone involved.
The future lies in accompaniment
Traditional management consulting, as we know it, is nearing the end of its life cycle. Its standardized solutions, top-down approaches, and tendency to create dependencies no longer meet the needs of modern organizations in a complex, rapidly changing world.
The future belongs to support concepts based on systemic approaches, process orientation, and genuine participation. These methods empower organizations to develop their own solutions and learn continuously, rather than relying on external expertise.
For companies, this means that when selecting external support, they should focus less on traditional consultants who present ready-made solutions, and more on partners who promote the organizational learning process and enable sustainable change from within.
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