The Future of Consulting: Outcomes Over Outputs

In this conversation, Tim Beattie discusses the evolving landscape of consulting, emphasizing the need for a shift from traditional models focused on outputs to a more outcome-oriented approach. He highlights the importance of enablement over mere delivery, the pitfalls of the silver bullet mentality, and the necessity of mastering OKRs for effective measurement. Tim also explores the role of AI in enhancing consulting practices and provides insights on crafting effective OKRs and key questions leaders should ask before engaging consultants.

Takeaways

• Traditional consulting is broken and needs to evolve.
• Focus on outcomes rather than outputs in consulting.
• Enablement is more important than delivery in consulting.
• The silver bullet mentality leads to dependency on consultants.
• Organizations should build internal capabilities instead of relying on external consultants.
• OKRs should be regularly reviewed and owned by teams.
• Effective OKRs require collaboration and clear ownership.
• AI can enhance consulting by amplifying human expertise.
• Consultants should leave behind high-performing teams.
• Leaders must ask critical questions before signing consulting contracts.

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Transcript

1:54

Tim, welcome to Productivity 3! Thank you Santiago. Thank you so much for having me on your show. I'm really looking forward to this conversation. Tim, you say traditional consulting is broken. When did that first click for you? When is the moment you realized that, we can keep doing this this way? I have thought this for most of my career, which is about 25 years old now. So I have worked for big four consultants like PwC and Deloitte and IBM. I've worked for a few times I've worked for small niche boutique consulting companies as well. And I've always seen inefficiencies, frustrations. Areas where I just think there must be a better way of doing this. There should be a better way, there has to be a better way. I probably got that first niggle in the early 2000s. where I was working on huge, huge consulting projects, taking years and years and years to deliver any value to go live and costing millions a day. These were huge. And I just remember thinking back then, this has got to be a better way of... being valuable, of showing value. And that was the first itch I got way back in the early 2000s. And I've been on a journey ever since to try and optimize and improve and find better ways. So how do you see consultancy evolving? Where do you think or how do you think consultancy could get better? think the number one thing is to have a much, much bigger shared focus on outcomes. I think a lot of consulting is still heavily focused on outputs, so deliverables, documents and frameworks. Applications and systems uh It gets away from the problem, the original problem that we're trying to solve or the opportunity we're trying to I think a lot of consulting models, the engagement models are set up for inefficiency. You know, the things like time and materials, you're selling time and Already from the moment that engagement's been in place, it's... it's... creating negative behaviours. If you think about the nature of a time of materials engagement, it's actually in the interests of the consultant to go slower. It's in the interest of the consultant find more work to do, to make themselves sticky, to create busy, to make themselves really busy because they get more money for it. And I just think that's wrong because it's taking the focus away on the outcome. So I think consulting of the future has got to be much more oriented and anchored around the outcomes and should be have a much much tighter feedback loop to see if we're making progress towards those outcomes. In our current day and age where there's so much data, everything is so much faster in terms of being able to get feedback and to be able to respond to it, that has to enter the way of working for consulting as well. For listeners who have never hired a consultant, how do you define the old consulting model in simple terms? And what does the new enabling model look like in contrast? Okay, mean, so I mean, I have been a part of that whole consulting model. I have been that consultant for many, many where effectively it is a client organization hiring in some expertise that they don't have in-house. or bringing a third party organisation in to deliver some kind of outcome that they are not able to do themselves or they don't want to do themselves. They want to, you know, they see it as very risky and they basically buy the risk by paying a third party to come in and do that. And in many cases, that is a really good thing to do because, you know, consultants, successful consultants, good consultants, become good consultants because they've got lots and lots of experience. They've been there, they've got lots of experiences, they've had the wounds, they've got the learnings they bring all of that intellectual property into the client and therefore it stands a really good chance. I think for me, and this is one of the itches I had early on, Organizations became too dependent on consultants. They couldn't live without You know, consulting was good for the consultant because they became dependent upon and revenue was there. But the number of projects that I worked on early on in my career and I heard about after we left, everything started to fall apart. that's because we were delivering some solution. We weren't enabling the organisation to to learn to to stand on their own two feet themselves. So I think the kind of consulting that I've transitioned to in the in the last 10 or so years. has been much more around enablement. So not just delivery, I'm not a delivery consultant, I'm an enablement consultant. I am enabling high performing organisation, high performing teams. Yes, maybe we're going to co-create something together, we're going to build something together, but I want to leave behind that capability inside the organisation so that they can live on and be successful in a much more long-lived fashion. And I think consulting organisations, they're Their internal intellectual property is so important now, consulting can now help bring that enablement into the organisation. You have already alluded at the misaligned incentives of consultancies and clients, but is there a theme of clients looking for silver bullets instead of hardworking or building capability, as you said? Yeah, and I think that there's a mindset there in leadership that there's a saying sometimes, know, nobody got fired for hiring IBM or nobody got fired for bringing in Accenture or whatever the big... well-known consulting organisation is it feels safe, it feels, oh well I'll bring in these experts and we'll put a really strong contract around them and then you know if things go wrong and unfortunately things do go wrong with a lot of consulting contracts and they don't deliver the expectation then the leader sort of stands behind the contract and they well let's get the contract out and sometimes the lawyers come in and you know seen those happen quite a lot. And I think... um Yeah, I think it is a silver bullet. think it's sort of the let's just it's a very transactional process. Let's bring in this organization and pay them and they'll do the job and then they'll leave. But organizations just aren't as simple as because organizations are changing all the time. The conditions are changing. There's there's there's such a need at the moment for adaptation and to be able to respond to change and to able to react to feedback and to be able to look at data points and maybe do something different this month to what we thought we were going to do last month. So that idea that while we've signed a consulting contract and we've asked them to come in and deliver this service just sometimes doesn't stand. It becomes not the right thing to do but because they've taken that silver bullet approach they kind of stick with it even though it becomes clear this isn't the right thing we're doing. Yeah but we've already agreed to do it so let's just carry on and I'm sure it'll be okay. That's where organisations end up in trouble. So yeah I think that mindset, the silver billet, just doesn't work. We're in a much more complex environment and we need a much more collaborative, iterative, responsiveness mindset when it comes to delivering solutions. Do you think some organizations like the old model because it gives leaders a shield? Like, we hired a big-name consultant, so if it fails, it's not on us, it's them. Yeah, exactly. And the finger pointing comes out and the blame culture comes out and that and then, you know, it's not a particularly nice environment to be in. But yeah, as a leader, I think it's they they they use it as a protection, as a comfort blanket. it's a suboptimal behavior, really. If if they really wanted to do the right thing for their organization. I think they would have to be, there's a braver route to doing that and that is let's... build up capability inside our organisation, let's not be dependent on a third party. We will become more valuable if we have this in-house experience. We will become more valuable if our teams can be long-lived, high-performing teams, rather than hundreds and hundreds of different suppliers coming in and doing short-term projects. So there are great, and I think I'm seeing more more great leaders now switching to that mindset as more more organisations become more product centric. and are seeing the value in their people and the value in investing in their people and therefore consulting can become more about how do we help these people rather than deliver a short-term tactical fix which is what they they often were before. Do you think consulting will struggle with more organizations moving to a product-based type of work? Yes and no. I think consultants that relied on working in a project set up and like the idea of coming in to deliver projects and they come and they go. organizations are moving towards more of a product centric and a product mindset and a product operating model. There's certainly opportunities still for consultants because I think those organizations need a lot of help to get there and therefore there's opportunities. those consultants should realise that the end goal there is that we aren't working on projects anymore. The term project should start to diminish. We start to not think of that. And instead of dividing up work packages into projects, we have these long-lived product teams that we start to flow the work into. And this is where, know, concept of really good product backlogs and product backlog refinement and program, know, teams of teams that are forming programs, but it's more in a product-centric, it's more of a... continuous delivery of work so it never ends. And this is the way, you know, product organisations, until you shut down products, until you turn them off, which organisations tend not to do until the very end, there's always a product teams and you're never done, you're continuously improving, you're continuously building upon, you're expanding. So that kind of project mindset of define beginning and end just starts to erode, starts to go away. that's a mindset shift for lots of people from leaders all the way through to the consulting organisations. You say that measurable outcomes and OKRs are crucial, but hard to get right. What are the top mistakes you see teams making with OKRs and that make them fail or not be as successful as you think they will be? uh gosh there's loads. OKR, Objective and Key Results, really simple framework. We were talking before the recording, you know, it's, when you think about it, it could not get simpler. We're going to have, is the outcome we're trying to achieve, written as an objective, and then here's some key results which are going to tell us if we're making progress or not. I love the framework because it's so simple. I actually really love the principles behind it. The number one mistake I see made are we write them. We get into a room together, we get on a Zoom call, we write them and then we file them away on some shared drive. We don't look at them again until maybe the end of the year or the end of the quarter where there's suddenly a mad scramble to update your OKR. The idea of the OKRs are that they are setting direction and they are giving us data feedback regularly as to whether we're making progress or not. So they should be used weekly. maybe even daily. My team that uses OKRs, it's built into our mindset now, what is the key result we're trying to move forward. So that's the number one, it just gets forgotten about and fizzled away. Other mistakes I see made, sometimes They're kind of set by a manager and delegated and cascaded. And I think that the thing about OKR to work really well, are owned by the team. The team write them with managers, leaders, stakeholder input. But it's a real collaborative process. We get much better understanding as to what those indicators are that are going to tell us if we're making So this idea that someone writes, and just gives them to your teams. You lose a lot of that pride and ownership and motivation and then the innovation that comes with that. And then the third one I would say is the wrong key results. I still see lots of teams just writing lots of tasks. They think, here's my objective. So I'll come up with all of these tasks that we've got to do and there are key results. And the key result is supposed to be a measure, supposed to be a needle. And those needle you see move week by week, day by day, maybe. It's uh not a thing that you tick off. They are needles that move. and lots of measures. So I see the wrong key results being written all the time and they become very binary and tick boxy. don't get me wrong, this is where it's hard. You say writing some measures is easy, it's not. It's coming up with the right blend of measures, a mixture of effort-based measures and output-based measures and most importantly outcome-based measures. How are we going to know that we are actually achieving an outcome for our organisation and then how do we connect that and show that that is actually helping another part of the organisation. So this is the area that I've actually been spending a lot of time in the last few years really trying to trying to get better and optimised because I think there's huge opportunity to get high performing organisations if we can have really well written connected OKRs. Tim, I'm going to abuse your trust a little bit and try to get a little bit of free consultancy from you because I want you to formulate an OKR for this podcast that is a well formulated and solid OKR as an example for the audience. If you would be the director of this podcast and you need to set up an OKR for this quarter, how does it look like? Well, you took, let's imagine it is the 1st of January, 2027. Okay. We're recording this in early 2026. Let's fast forward a year. Imagine you were to write a newspaper headline for the Podcast Times about your podcast. Well, what would you want the headline to be? What would be the thing that says, yes, this is, we have made it. This is. How would you describe your podcast at a year's time in like a newspaper headline or a big subject line? I will describe it as in Productivity Podcast has helped more than a million listeners to become more productive, recover some of your time and become happier. I love that. So already... the way you describe that. If I worked for you, right, or I was in your team, if we had that on the wall, this is our outcome. You know, this podcast is going to help a million listeners be more productive. It's like, yeah, that's a reason to get out of bed in the morning. That, I am helping people, right? And I instantly am thinking about the listeners, the viewers, the people are consuming your content. So I'm already, right now I'm thinking about those. So that is your objective. that into a really succinct memorable objective that if I asked you at any time in the year or anyone that ever works with you that's what they would quote. Then I would think about okay how am I going to measure progress during the next year and I like to think of trying to get a blend of leading measures and lagging measures. oh If we just went with that, a people have told us that they are far more. productive. It might be October, November, December before... they all start telling us because first of all, they've got to listen to your podcast, then they've got to start to apply some of the learning that they've done, then they've got to do some experiences, and then eventually they've got to feed back to you to know that you've moved those needles. I don't want to wait until November, December time to find out if those needles have moved, okay? I want to know in the next few months that we're making progress towards that. So I start think about some measures I can put in place is at least telling me if I am heading towards that outcome or not. So maybe I'm going to start measuring the number of viewers. um First of all, I'm going to measure the number of podcasts you put out, right? Because that's an effort estimate, right? You can, you're in complete control of that. That's an input key result, okay? And it's very leading because you are in complete control to make that happen. You've got to get more recordings. Then I might want to start measuring some of the consumption and outputs that come from that. How many views, how many engaged? I'm taking a really kind of a marketing approach to this. what I guess what I'm getting to is we're starting to build hypotheses really early on that if you record a certain number of podcasts in particular areas, it's going to generate a certain amount of output. It's going to generate a certain amount of interest. It's going to generate a certain amount of action and behavioral change. So if we have say three, four, five key results, some of them are very much input and leading in your control. And then we've got some more lagging output outcome metrics, measures, key results. Then the process of the next 12 months is to experiment lots and lots and lots and see if those hypotheses are true or not. And then to refine our approach as it's not. Because then we're going to learn as we go through the year whether we are actually going to achieve our outcome of helping that million, those million people be much more productive through your podcast and your other tools. Then during the year we'll have lots of retrospectives, lots of learning, lots of feedback sessions so that we can slowly refine and make sure the needles keep moving and when they don't we start to do something about it. Tim, if leader is about to sign a big consulting contract, what three outcome-focused questions should they insist on answering, getting answers from the consultancy before they sign a single invoice? If we think outcome-based, what would you ask before signing a multi-million dollar consultancy contract? Okay. I don't know if it's as simple as a question and answer, but there's definitely an alignment and a validation that needs to happen. First of all, do you understand the problem we are trying to solve? in a one line. What is the problem we are trying to solve? And how will we know that we've solved it? Ideally with a measure. OK, and this is where framework like a North Star metric can be really useful. If there's one measure and one measure only, that's going to tell us that as a result of this investment of millions. we have achieved the outcome of that that's associated with that investment what is that and the consulting company we need to make sure that we are absolutely 100 aligned where we just feel really confident yes these people understand our context they understand why why we're investing this and they understand what success looks like in terms of a measure so that that would be number one. The second one would be the consulting company going to demonstrate value early on and regularly? Okay, so what am I trying to avoid here? I'm trying to avoid us having what I call the watermelon effect where... you present with lots of projects, status reports with lots of green on it and lots of words. But actually, when you peel it back, things have gone wrong. So I need to know what is your how are you going to report value? How are you going to demonstrate that the input you're putting in, that the consulting services that you're providing are connected to value that we care about, we the client care about. OK, so and I want to know what the approach is going to be. So if the consulting company says something like we're going to put some really good OKRs in place and we're going to report on those every month and these OKRs are going to be the client's OKRs, nothing to do with the consulting company, that would be good answer. A warning would be when we're reporting things like on number of hours used or know number of dollars spent and things like that. They're valid metrics, they're not actually connected to the client's value. So that would be number two. And then... Number three, think I'd be I'd be looking for something around the transparency and honesty around when things are going to go wrong. If it's a multimillion pound contract, something's going to go wrong. Right. So how are we going to how are we going to handle change? How are we going to handle all of the things we haven't thought about? How are we going to handle all of the problems that we don't know when they're going to surface? What is our you know, what is our kind of Governance sounds like a very formal word, how are we going to work around that? And again, I would be looking for lots of feedback loops, lots of retrospectives, lots of lessons learned. And the fact that, you know, we are actually, we're in a kind of a partnership, not a client supplier of the world, but we're in a partnership and things are going to go wrong. But we're going to be feel, we're going to feel very safe with each other to report that. And we're going to feel safe. to share when things go wrong so that we can share these problems early. If we hide behind things and say nothing goes wrong because we are the experts, we never get anything wrong, that would be a warning sign to me because like I say, organisations and change is really complex. So there are probably my three things I would be pushing for and I'm really looking for a culture just to get a feeling of what the consultant culture is going to be like and if that's going to be blend with the clients. That was brilliant, Tim. I would add a fourth one. Can I say it? What's going to happen when you leave? That would be probably one of, I would have at the top, like, what, who's going to run this when you leave? Oh, 100%. Yeah, I was sort of I was kind of working through the timeline and I sort of hadn't even reached up to the point of just thinking about getting them in the door. But it's a really good one. In fact, I would I would put that right up on top of the list, really. Yeah. And that would help. How are we going? How are you going to be enabled and how are you the consulting company not going to not going to make yourselves indispensable? Headlines a few weeks ago, consultancy big four, consultancy X, it's find that many millions by country. Why? Because they'd use AI to produce all their decks. Now, Tim, you blend AI with human coaching. Where does AI generally make consulting more productive? and where you draw the line between, hey, this is a chart GPT generated PPT, I'm not willing to pay half a million dollars for this. Yeah, this is a really interesting area at the moment. I wrote a blog post all about that story that you It's fascinating. So I think AI offers a huge amount of opportunity to consultants, not to replace them, but to help them be even better. The way my team, my coaches are using AI at the my coaches are really, really experienced. They have got 20, 30, 40 years of experience in the kind of consulting that we do. They have got so much stuff in their head, it's amazing. And they will always be great experts that our clients can get a lot of value from. Sometimes there's things in their heads that they just can't reach. just forget what they know or it just doesn't spring to mind. I think AI can be a really good sparring partner just to almost prompt you and remind you, especially if you prompt it with the sort of things you're thinking about. So I don't think it's going, you take a pre-canned response, which has been a consulting approach for lots of organisations where you have everything pre-canned and so on. Instead it's about helping amplify the consultant as a help, help, help, help, sort of just help them just think through things a little bit more. So I almost see it as like a pairing partner as opposed to you know a lazy you know I'm going to pass the AI and it's going to do all the work for So I think in the execution of the services There is a really good tool, but that's all it is. It's a tool. It still starts and ends with the consultant's voice, the consultant's experience, the consultant's story in particular. The storytelling, I think, is such an important part of consulting skills. And AI can just provide some supplementary thinking just to nudge you in the right direction. The other one that I've been exploring recently and this goes back to the how does the client ensure that they continue to get the value of the investment in the consulting long after the consultants leave. I think when the client is paying huge money to get access to the consultant's brain and all sorts of great conversations and experiences happen during the consulting engagement, AI offers a wonderful opportunity to harness that intellectual property, the thinking, the conversations, the decisions, the discussions. And I think with digital technology at the minute, there's a great opportunity to kind of document the engagement as you go along. Not a big write up at the end, but you know, record workshops, capture voice notes, photograph great whiteboarding sessions and feed that all into an AI so that when the consultant leaves and it's three or four months later and someone in the client thinks, I wish X was here. I wish I could ask him or her Maybe an AI engine that has got access to all of this stuff that was captured will mean that... the client isn't suddenly going off, they've long gone, they've sailed off into the distance. Actually, no, we can still tap into this. We can actually go back and do that. So I think that there's another really interesting opportunity where AI can kind of help the consulting experience live on long after the humans have left. And there's even an opportunity, I think, for consulting organizations to charge for that, because this is where it is still their IP that they're using. It's just not always humans in there. started with humans but it means that that expertise is still accessible long into the future. Team, let's do rapid fire questions. 30 seconds to answer each one of them. Number one, one consulting habit you wish every team will drop this week. using jargon that people don't understand. Number two, one metric that tells you instantly whether a consulting engagement is healthy or broken. uh a measure that matters to the client. 3. The most overrated buzzword in transformation right now Agile. I love agile, but sadly it's become such a buzzword and misunderstood and misaligned. So it's a real buzzword. Four, if you could only keep AI or OKRs in your toolbox, which one stays and why? OKRs has to stay or the principle of OKRs something similar to it because you cannot improve what you do not measure. You cannot improve what you do not measure and OKRs provide a framework to do that. So if it's not OKRs it has to be something where I'm putting measures in there to find out and AI m cannot know that without the context. So OKRs has to stay. And number five, what should a great consultant leave behind after they're gone? a A high performing you can build software, deliver software or documents or frameworks, whatever. But if on the last day of the consulting engagements, the consultant says nothing, but the team from the client that he or she has enabled gives an amazing demo of what they've managed to do as a result of all of the help. That is just, you should be so proud of that as a consultant. fortunately, I've been in that position several times where I've been so proud of the team I've left behind because I think they're going to live on and I was a part of creating that and I'm very proud of that. for a leader who feels burned by consulting in the past way too many times, what is the single experiment they can run in their next engagement to completely or to start changing the dynamic? eh I would say try an OKR approach even if it's just with one part, one team and you find someone who has done this before just to help them on their way and I think you'll find if we define the outcomes that we're all aligned and align everyone around that so we can focus on it and then find the measures that really matter to take us towards those, it sets you off on a really good part. You can't do that right across the board in one big bang, but you can definitely start in an area. And I find that it can then really generate an infectious enthusiasm for a measurable outcome mindset. So, yeah, define the outcomes and measure what matters. Amazing, Tim Beatie thank you so much for being with us today. We learned a lot about the old consultancy, the new one, what's coming with product organizations. And my takeaway is that now more than ever, we have so many years of consultancy already. It has to be a shared goal if we want consultancy to be successful for companies. Of course, there will be small engagement where you need services or something, but if we're talking about partnership, it has to show like that. Not only hours or number of items delivered or whatever other thing. Thank you so much for being with us, Tim. Thank you. Thank you for having me. Really enjoyed this. Thank you so much.