Management consultants have a bit of a reputation for using big words to describe small things. So you’d be forgiven for thinking that when they talk about transformation they just mean change of some sort. But you’d be wrong.
To be fair, we were similarly sceptical when – a few years ago – this transformation word starting cropping up in all our conversations with consultants around the GCC. But then their clients started using it too and we thought we probably ought to sit up and take notice.
Transformation describes the sort of far-reaching change that many organisations across the region now find themselves needing to undertake, whether in response to changing social, economic or political conditions, or to counter the ever-growing threat of disruption. It’s what IBM did in changing itself from a company that sold mainframe computers and calculators to one that sells software, IT services and, yes, management consulting.
It’s what Kodak famously didn’t do when faced with the advent of digital photography.
And while transformation isn’t always as high-profile or as obvious to the outside world, as the Kodak example so amply demonstrates, failure to do it can be terminal.
The reason transformation is such a big deal in the GCC these days is partly because things can change so quickly, and partly because of the interdependencies between different parts of an organisation.
Change one thing and you have to change everything.
Projects usually cut across functions and often cut across countries, and because of their size and complexity they’re very good news for consultants.
Indeed, the difference for a consulting firm between high and negative growth can often be measured in the number of transformation projects it has won.
But what does any of this have to do with the GCC in particular? After all, transformation is a big deal everywhere.
The answer, as highlighted in our GCC Consulting Market Report today, is that the GCC may just be home to the mother of all transformation projects: Saudi Arabia.
There are many ways to think about the challenges facing Saudi Arabia right now: for some it’s about diversification, for others it’s about reform. But there’s a convincing argument that for management consultants it represents the biggest transformation project they’ve ever clapped eyes on, and it’s little wonder that they’re getting excited about it.
The irony, of course, is that the very thing hastening the need for transformation in Saudi Arabia – the price of oil – is the same thing that’s making life more difficult for the GCC’s consultants than they’ve known it for some time. But that just makes it all the more important to them. If it wasn’t for the Saudi Arabian public sector, there would be a lot of consultants on the bench across the region at the moment, and they know it.
But this isn’t simply a story about what Saudi Arabia can do for management consultants. The country’s rulers have made no secret about the fact that they’re making extensive use of companies such as McKinsey to help them address some of their biggest challenges – including the privatisation of public assets – and they’re smart to do so. Because while there may be something faintly distasteful about a bunch of consultants eyeing Saudi Arabia as an opportunity, the experience they bring of running transformation projects around the world, allied to their ability to supply high-calibre people at speed and scale to help implement their advice (something all their clients expect from them now), makes them incredibly useful.
As does the pragmatism they can bring to what is, after all, a high-stakes, high-emotion situation.
No, however much Saudi Arabia can do for management consultants the bigger story concerns what management consultants can do for Saudi Arabia.
Edward Haigh is a director of Source Global Research.
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