How MDRx is changing the face of consultancy
In an era of growing scrutiny and scepticism about the value delivered by consultants, it becomes crucial for consulting firms to prioritise value creation for their clients and taxpayers. At MDRx, we recognise the need for reevaluating traditional approaches to decision-making, incentivisation, and project closure when it comes to creating value for our clients.
In this blog post, we will delve into three essential aspects of how are changing the face of consultancy through: selecting opportunities based on client value creation, our unique approach to incentivisation, and our emphasis on preparing to exit projects efficiently.
Choosing Opportunities Based on Client Value Creation
MDRx’s focus lies in identifying projects where we can offer a competitive edge and deliver value beyond what others in the market can provide. Instead of pursuing as many consulting jobs as possible, we concentrate on those opportunities that align with our expertise. We ensure that our project teams comprise experts from within our organisation, as opposed to simply selling expertise without delivering it in practice. This approach guarantees that the value proposition remains intact and effectively adds value to the client’s existing capabilities.
Creating and delivering value through having expertise embedded in the delivery team is really important to us. Often, when consultant teams are trying to be competitive on price, they will resource projects with more junior members of the consulting business. Although this is valuable in growing future leaders in consulting, having blended experience in teams is going to make sure that value is added.
As consultancies, we should focus on opportunities where we add additional value to what the client already has in-house, making sure that our teams are blended and thinking about the impact that we are going to have when pursuing opportunities.
Incentivisation Aligned with Value Creation
In traditional consulting firms, individual incentives often prioritise revenue generation, which may not be directly linked to delivering value for the client or the taxpayer.
At MDRx, we disrupt this model by incentivising our consultants based on the impact they deliver to clients, rather than the sales they generate. This unique approach ensures that consultants at all levels are motivated to contribute meaningfully to project teams, keeping the focus on value creation. We have a separate growth function which operates successfully, and we have had consultants that want to join the growth team and focus on sales. We provide a different set of incentivisation for that team versus the people who are delivering on client projects.
Having a sales target is prevalent at consulting firms with a focus on utilisation for more junior consultants. Most often, the largest contributor to how a junior consultant’s performance is measured is the number of hours or days they’ve spent on a consulting project in a year and not the amount of value that they have delivered to clients. At MDRx, we have never had a utilisation target on an individual basis. Whilst utilisation is important for the business and our commercial performance, we focus on the impact that individuals have on projects, not on the amount of time they have booked.
If we measured consultants by the value delivered to the client in the private sector or the taxpayer in the public sector, we’d have a much healthier relationship with our clients and our goals would be much better aligned.
Preparing for Project Closure
We know that efficient project closure is integral to delivering value to clients and taxpayers. When starting a client engagement, we emphasise the importance of developing exit plans from the beginning, regardless of the project duration. We also focus on building in-house capabilities within the client’s organisation to ensure continuity beyond the consultancy engagement. This relies on the incentivisation structures being in the right place so that our team is coaching the client towards wanting to end the relationship and it also relies on the expertise in the team being able to build up the capability.
How do we ensure we have an exit plan? There are a few things that are particularly important here:
- Making sure that there is strategic planning around what the future business model is going to look like – is there a role for an external consultancy? Perhaps there is a particular skill set that our client doesn’t want to invest in long term and there might be a sensible business case for keeping that as something that is contracted externally.
- Knowing what that business model needs to look like in the future allows you to support your clients with recruitment. At MDRx, we’re currently working with clients on their recruitment pipeline and it’s important to acknowledge that as consulting leaders who recruit the skillsets they need regularly, we should be able to advise on how to find the best candidates and help to recruit them.
- Knowledge sharing – this is something that should be considered when suppliers are being assessed on how much value they can add to a role. We advise our clients to consider carefully during the procurement process not only whether a consultancy has access to development programs for their own people but also whether the client can access it. We provide that knowledge sharing from day one and we’re happy for our clients to join and engage in our communities of practice and development programs because it allows them to get better results in the long term.
Whether you are a consultant, a consulting leader or working with consultants in the public or private sector, these are the areas you should ensure in order to improve the value that you get from consultancies: they can add expertise beyond the knowledge of your organisation, they incentivise their teams based on value created and they are happy to leave when they have delivered an impact.
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