Proving competitive advantage in service industries

To demonstrate your worth, constantly update your process

The other day, I met with the general manager of a big global design consultancy. We talked about the problem his company is facing: Its process and methodologies are being replicated by organizations outside the design industry, like advertising agencies and brands.

He called it the "McKinsey challenge," observing that when former McKinsey consultants became CMOs, they implemented thinking tools and processes internally, reducing the need for external help.

This design consultancy’s challenge is even bigger, though. It is now competing with advertising agencies where planners who read enough about design thinking are creating "lean" and "iterative" processes based exclusively on focus groups, then selling them to clients. Brands are creating internal design thinking teams. Surely, one can see the fairness of this newfound competition — methods and tools and processes are not exactly design thinking — but who cares? Design consultancies are the ones losing the money.

Who is to blame? Process can be replicated; people leave.

For companies with nothing else going on for them but process and people, the competition is endless. Advertising agencies know this well.

How can design consultancies and agencies defend themselves against the competition? Creating a strong brand is one way to be recognized for a particular kind of work. CP+B used to have it. It could get away with much more than other agencies could at the time. People were lining up to go to Boulder.

Better than branding, though, is constantly updating your process, effectively making all previous iterations obsolete. Process updates are like software updates: People can leave, but they’ll only take the old software version with them. No one wants to be the person with the old software, and no one wants to miss out on the new software, either. So people stay.

It’s not easy, and it takes a lot of thinking and time.

Being really responsive and iterative and adaptable is a long-term competitive advantage. But the current process doesn’t allow for this new, competitively superior process to come to life. In design consultancies and agencies alike, everyone is too busy delivering to be thinking, and everyone works within the timeframes and pay structures that encourage repetition of best practices. As long as efficiency is the goal, replication will be its side effect.

Ana Andjelic is SVP, global strategy director, for Havas LuxHub.

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