Many tech companies are adopting a consulting approach these days. They see a slowdown in their core business and try to find new avenues for growth. In parallel with this there is an increasing interest in topics like solution selling or consultative sales. The latter topic aims to create a more effective sales force by teaching them some superficial consulting skills. The first topic uses consulting as a bridging mechanism between the old business and the new. For the purpose of this article let me label the first topic consulting-led selling and the latter topic as consultative sales.
These topics are worlds apart, even though they sound similar.
In Consultative Sales the aim is not to sell anything different but to sell the same product or service but sell it more effectively, i.e. to increase the win rate. Consultative Sales usually aims to refine the value proposition but the core offering tends to remain the same. For tech companies that see this as a panacea to slow growth this may be a short-term fix to a longer term problem.
Consulting-led sales on the other hand may take a company from one market to an adjacent one. Credentials in delivering one core technology may be useful, but are not a given, in adjacent markets. For example does the expertise in data storage technology that EMC have help them to access an adjacent market in data
This topic is one that fascinates me in that the lure of an adjacent market, especially if it provides attractive growth or profit opportunities, is often brittle. First off to even realise that there is a profitable and growing market requires there to be existing players (incumbents by any other name) and displacing incumbents is always a tough proposition.
Secondly the core capabilities and skills for an adjacent market are often wildly different. Consider traditional hardware and software, especially software development. These are adjacent markets yet the traditional skills to succeed in hardware are not always the same as those in software. True there are companies that have succeeded but they all seem to tell a story of struggle before achieving success.
That leads me back to consulting-led selling.
One of the ways that startups are now exploring new businesses is to take an explorative and
iterative approach. Post the dot com bust and the recent global recession there is less immediate bravado and investment dollars for the next big thing.
So the question in my mind is whether a consulting-led project approach is the best way for existing companies to explore new markets and build their next growth engine?
Let me (briefly) expand the description. A consulting-led project approach is one that takes an outside-in approach, starting with the customer first. It should also practice customer development versus product development. Early adopters and late majority customers have different needs and therefore we adapt our approach to be able to sell (and deliver) to both. We need an adaptive mindset that allows us to recognise the opportunities in exploration, as well as recognise the need for efficient exploitation. Importantly our adaptive mindset is able to balance both, along the sliding scale from early adopter to late majority.