Posted on December 22, 2010 at 2:32 am

On Consultancy and Advisory

It’s always nice to have friends with the same profession from different company, so we can expand and horizon and see the dynamics beyond our perspective. A couple of days ago, I was in a warm discussion with my old friend from one of the leading advisory firms in Indonesia, in the world rather, and from him I received many new insights on the new consulting paradigm. We talked about how today’s consulting business not only just ‘to consult’, but the trend is now more ‘to advise’. He said that firms (mostly strategic consulting firms) are now shifting its paradigm to be advisors rather than to be consultants.

What is the difference? And why it matters? Consultants are problem solvers. They excel at developing and selling ideas, and they can be great simplifiers. Good advisors though, leaving their clients with a new and often broader perspective. They are better problem-definers than solvers. At their best, they contribute to strengthening their clients capacity to solve their own problems.

He said “We are not problem solvers, but the corporate guys are. Because they know better than us. We just give them new perspective, and show them another problem to be solved”. Employees of today’s corporations are equipped with problem solving skills, their brains are hardened to be the company’s best problem solvers, strategic decision makers, and most importantly, they know the ground better than anyone, more that any consultant know. They don’t need fancy frameworks, because they have many or create it rather. They don’t need solutions because they know how to solve it. They do need advisors to show them what could be the future problem if they make any decision.

Advisors can provide an early-warning about emerging problems, signals often missed by a consultant’s sharp focus on eliminating the problem at hand. Advisory is mostly not about catering the problem at hand, but it define the problems at ‘I-don’t-know-when-it’s-going-to-be-at-my’ hand. This similar to the circus analogy, consultants are knife throwers, they have the capacity to aim for the destined target and hit it in precise manner. While advisors are fortune-tellers, they master the ability to see the future by looking at the client’s hand.

These are two very different roles. It’s hard for one person or firm to act well in both capacities at the same time. It required different mindset, skill-set, and tool-set. It is like this simple example about handling a client who want to start a new business, consultants will say “you have to do this and that to be succeeded”, advisors will say “in the future, you are going to have legal issues, economic turbulence, supply shortage, etc. What are you going to do?”

We ended the conversation with my joke “Thank God that there are more Marriage Counselors/Consultants than Marriage Advisors, because if every bride met their Marriage Advisors before the wedding day, they most likely to say ‘No’ to the groom considering how awful their advisors told about all the problems going to occur in married life. And therefore I am grateful to be a consultant” :)

Leave a Reply