70% of Companies Asking for Strategic Advice Cannot Be Helped at All?

From time to time I have lunch – which I enjoy very much – with a fellow Chicago Booth alumnus who spent 20 years in research at one of the world's leading business schools for innovation. We talk about innovation, politics – and consulting.

This time he made a remark that stuck with me: in his view, 70% of all companies that ask for strategic advice cannot be helped at all.

Has anyone ever backtested strategy or innovation consulting? ;-) We are not talking about "consulting" work in implementing a system, project management etc.

I can't prove the number. But after 30 years in consulting, I don't find it absurd. And we actually came to a conclusion: before accepting any engagement, we should commit to a short assessment – can this problem be solved in reasonable time and with reasonable effort?

"70% of all companies that ask for strategic advice cannot be helped at all."

What does it mean for your career?

If he is even half right, what are the consequences for building a career in strategy or innovation consulting?

1. Better build something! Start a company or join a start-up. Every small venture of your own will teach you more about running a business than any engagement.

2. Don't choose consulting to get rich – it will not get you there.

3. Be wary of incumbent companies who tell you they want to be innovative and offer you a job in their strategy or innovation department. Mostly they can't – not their fault, they were built for something else.

4. Go where the cluster is. If your country has no leading cluster in your field, consider leaving. If you are serious about fashion, look at Milan, Paris or London. Progress happens where the right people, research and mindset come together.

Guter Rat ist teuer

In the meantime, we will stick to our commitment and turn down consulting work when the probability of success is low. It helps that I don't have the pressure to sell an armada of consultants to increase revenue anymore ;-)

But despite all these failures of the industry, one old saying still holds true: „Guter Rat ist teuer" – good advice is expensive. The line is much older than most people think: it already appears in 1498, in the Low German „Reynke de Vos", printed in Lübeck – „gud rad is hir nu dür". Back then, „dür" meant not so much expensive in terms of money, but rare and hard to come by when you are in real trouble. More than 525 years later, I think that is still exactly the point.