It’s time for consultancies to shift from a service model mindset
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“The pandemic accelerated the call to build in every industry, and that builder mindset will shape the next decade of innovation. Businesses that are able to listen to customers and adapt to what they hear at the pace of software will win.”
Our technology-defined era has proven that agile business models are wildly successful. The likes of Meta, Apple, and Google have scaled at a rapid pace because of their ambitious attitudes, and have kept their leading position because of adaptable approaches.
Service businesses, in comparison, don’t tend to have the same experiences. Scaling isn’t as easy to attain because the traditional service business model isn’t built for growth in the same way. In the age of digital and fast-growth – it’s time to think more like a tech business.
Why is the tech model so scalable?
The nature of the tech world means that innovation, scalability, and agility come naturally compared to service models.
Firstly, they’re dealing with tangible products or SaaS solutions. It’s something that can be purchased and delivered online without much human intervention or time spent.
Secondly, these qualities are an expected part of software and tech solutions, meaning they become an ingrained priority in the company business models.
For example, solutions are designed from day one to be expandable. Google is a great example – it may have started as a search engine, but it now represents a diverse suite of products and SaaS solutions.
The value of the knowledge economy and service businesses, in contrast, is rooted in a mixture of qualitative skills, problem-solving, and building relationships. It’s rooted in the people. As a result, it takes time to deliver a quality service!
And it’s not something that can just be copied and pasted. It also means that scaling your business involves a lot of hiring – plus spending lots of valuable resource onboarding, training and so on.
Tech business models can work for other industries
Just because service businesses aren’t traditionally built to scale, doesn't mean they can’t be. Here are two great examples of businesses in non-tech industries who have taken on the same attitude, approach, or ambition of tech companies and ended up hugely successful (and scalable!).
Nike
Nike is a product and service business at its core, but it promotes an inspirational vision akin to tech innovators to its customers. Just look at their mission statement:
“Our mission is what drives us to do everything possible to expand human potential. We do that by creating ground-breaking sports innovations, by making our products more sustainably, by building a creative and diverse global team, and by making a positive impact in communities where we live and work”.
In telling this emotive story to their customers and putting innovation at the heart of their motivation, they are taking advantage of business approaches often associated with tech companies.
Airbnb
“The founders of Airbnb realized that platform technology made it feasible to craft an entirely new business model that would challenge the traditional economics of the hotel business.” - HBR
HBR uses Airbnb as an example of how technology can help transform business models in industries that tend to follow non-digital models. Airbnb demonstrates how moving away from the norm can have huge success.
HBR discusses similar benefits as would apply to the knowledge economy, like being able to scale without a big investment while also not relying on owning physical assets (comparable to hiring lots of consultants or paying to outsource expertise) to do so.
The same HBR article also ends on a great quote showing that technology has the power to enhance the human side of customer and consultant relationships – not replace them; “the new business model serves as the interface between what technology enables and what the marketplace wants.”
Getting the right mindset
Our purpose is to help knowledge economy businesses scale their expertise – just like a tech business can.
A significant place to start is with ‘mindset’. It’s about embracing ambition, innovation and confidence. Take on the mindset of a tech company so that you can start to scale like one.
In the context of the Jeff Lawson quote that opened the article; knowledge-based businesses already have half the puzzle solved. They have direct access to their customers and can listen to their feedback. Now they just need to be willing or able to adapt accordingly.
Here are some qualities that are key to that adaptable tech mindset:
Building powers innovation
Ultimately, the first step is having the desire to try something new and disrupt the status quo. As Jeff said, it’s the builders, not the ‘sustainers’, who will fuel tomorrow’s innovations. For service model businesses struggling to scale, it may be time to readjust your approach, identify and tackle challenges, and create a new solution.
In this vein, digitisation has huge benefits for the service industry if it’s leveraged in the right way.
Read more about how we’re transforming digitisation in the knowledge economy
Taking risks
The ‘fail fast’ mentality is all about taking the leap, testing what works, and learning from the outcomes. One of the biggest challenges when trying a new approach is the fear that stops us just going for it.
Taking risks is the only way to improve and embracing them can help businesses scale much faster. For knowledge-based businesses with big ambitions to help the people they serve, this is a powerful way to get there.
Moving with agility
Tied into the concept of ‘failing fast’ is agility. Being able to make changes reactively and adapt to what’s working, or what isn’t, will be important for scaling. It allows organisations to remain relevant, competitive, and engaging to their audience.
For example, the current service model – relying on individual skill and knowledge - makes it difficult to make changes quickly. Learnings need to be disseminated across an entire organisation, and it would take more time for this to become a habit.
In the tech model, people can make small changes in an instant, and bigger ones aren’t far behind. They can be implemented at scale, backed by all the digital infrastructure needed to test the performance.
Methodologies to scale like a tech business
There are plenty of established frameworks and methodologies out there that will support you to think, and act, like a ‘tech’ business.
Here are some examples:
Atlaissan - The Scaled Agile Framework (SAFe)
FourWeekMBA - VDTF Tech Business Model
Lean Enterprise Institute – The Lean Start-up Methodology
Verne Harnish - Scaling Up
Atlassian - Agile
Mindset is designed to help businesses scale their expertise. The digitisation and engagement platform makes the tech model – supporting efficiency, agility, and transformation through advanced capabilities - accessible to everyone.
Download our Digital transformation methodology infographic below