HR consulting has never been known as an innovation engine in the world of management consulting, but I believe this is changing. Over the last 12 to 18 months, I have noticed a transition in how HR providers are organizing and delivering services, one that represents a new level of awareness as to their strategic role in the broader consulting marketplace. The change has been enabled by those familiar drivers of globalization and digital transformation, but it's really about something deeper that speaks to a new strain of organizational DNA in which resources and expertise have mutated into culture and competency.
The age-old model of HR consulting is one where service delivery is siloed by domain, what I will call the value chain model. The grouping of expertise is around point solutions, with consultants occasionally collaborating on bundled service offerings or the creation of intellectual capital. The focal point of the value chain model is the end product (read service), and the chain is designed around the activities required to produce it. Each consulting specialty occupies a position in the chain with inputs passed from one link to the next.
In this world, it's up to engagement managers, a typically senior cohort of consulting talent, to knit together a multidisciplinary service offering that can, for example, help a global client de-risk a mixed portfolio of pension plans at the same time they seek to empower employees towards retirement readiness.
It's a type of talent colonization that reinforces hierarchies in a closed system, makes bundled services delivery an operational nightmare, and creates barriers to knowledge sharing.
With the value network model, value is co-created by a combination of players in the consulting ecosystem. The defining features are peer-to-peer networking and complementarity between the network's nodes, including personal and professional alliances, suppliers, and customers. This model makes for a more agile, market responsive consultancy and is one the HR providers are increasingly embracing through constructs such as innovation hubs and competency communities. Some have been so bold as to eliminate the role of practice leader to foster a culture of service delivery that is more organic and interconnected.
New services and methodologies are more easily disseminated to consultants around the world with the value network model, something that is a challenge for companies with a partnership structure or that have trouble integrating acquisitions. The model also democratizes professional development through informal, sometimes simulation-based training in consulting competencies considered core to the firm's overall value proposition. I know of one HR provider that has opened the doors of a competency community to the marketplace through LinkedIn.
HR providers that are adopting the value network model are moving from selling products and services to focusing on experiences and outcomes for their clients. They are engaging all levels of talent within and beyond corporate walls as they seek to become a disruptor rather than disrupted by the digital economy.
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