Implementing Consulting 2.0: Catalant In Transformation

One of the more interesting stories in the freelance economy these days is the transformation of Catalant Technologies. Catalant is the best known and largest community of independent management consultants. Catalant’s more than 115,000 experts hail from over 190 countries. While a successful unicorn in their own right, the Catalant leadership team has been intensely focused on the changing needs of corporate clients and the consultants in the Catalant community. CEO Pat Petitti recognized a generational opportunity to position Catalant as a global consulting leader. A unique strategy, developed and articulated as Consulting 2.0, has positioned Catalant to “fix the roof while the sun is shining.”

Why Consulting 2.0?

Traditional consulting firms are having a tougher time these days. Post-Covid revenues for large firms have flattened, graduates of top schools are increasingly looking elsewhere to kick off their careers, and consulting clients want more specialized experience and expertise. Demands for strategy work have dropped in the US and internationally in favor of transformation expertise. In taking full measure of the consulting industry, the Catalant team recognized that traditional consulting firms were unprepared for the new demands that clients and career consultants were making.

Transformation is king, but traditional consulting firms haven’t adapted. According to Kennedy Research, interest in strategic consulting has slowed while implementation exceeds 50% of the consulting industry. As the Economist put it, “As companies become better at figuring their own broad strategies, consulting must get into the nitty gritty to add value.” Corporate clients want to deal with experienced consultants and operators; traditional firms can’t deliver on that expectation with a traditional workforce of 30% recent MBA graduates.

More than ever, this is a war for talent. The consulting talent of the future has moved beyond young MBA grads of top schools. It’s people who have meaningful, real-world, know-how. At traditional consulting firms that’s problematic. Catalant’s platform, on the other hand, consists of deeply expert independent professionals with strong proficiency in specific industries or functions. This gives Catalant a leg up in delivering the experience and expertise that clients increasingly require.

As traditional firms lose their luster, Catalant sees an opening. While large firms are reducing headcount, Catalant receives over 500 qualified applicants to its community each month, most of whom have a combination of consulting and corporate experience. With traditional consultancies not changing fast enough to meet client expectations, C-level executives see the value of moving beyond McKinsey, BCG, Bain, and other, similar, consultancies. Moreover, boards are increasingly supportive. They want to know that the experts helping their company have long and deep experience solving similar problems.

Catalant has a significant cost advantage. The larger a traditional firm is, the more it needs to consistently provide structured, relatively large teams of junior consultants who lean on the firm’s process to do their work. These teams need to be billed out at 3-5x their cost to cover firm overhead and profitability. Catalant lacks the very large, fixed costs of a consulting firm. It’s able to provide individual or teams of experienced people – including former McKinsey, Bain, BCG and Big 4 partners and former C-level operators – at well below the cost of a large firm, and to deliver more value to the experts in the Catalant community.

Technology is changing the game in Catalant’s favor. Catalant was early in recognizing how technology was changing consulting. Traditional firms take weeks to staff a project. Catalant use AI-driven technology to find the best people for a project in days. A new product in beta will enable allow clients to find the best, available person in real-time and connect with the client even more quickly, often within in the same day.

How is Catalant operationalizing Consulting 2.0? It’s one thing to announce a strategy – that’s easy – but quite another to successfully implement a new way of doing business. What steps has Catalant taken to activate its new vision?

Creating meaningful opportunity through community. Consulting is lonely work, and the half-life of consulting expertise is ever shrinking as innovation accelerates. People in their community prefer being independent but also value access to peers. Catalant is working to create a compelling alternative: community tools that build connections to other independent consultants and facilitate collaboration and teaming up, giving and getting advice from expert colleagues, learning together, and building stronger, deeper, relationships over time. Catalant is doing this through in-person and online connections like a recent invited event to Catalant’s Boston headquarters. The feedback has been exceptional. Catalant also created the Catalant Quarterly, an online magazine kicked off earlier this year to showcase the expertise of consultants, and to help promote its top community experts.

Creating more ways to build value for clients. The better Catalant partners with, and supports its experts, the more value it can deliver to its clients. Catalant is doing this through several new initiatives: Catalant Advisory – the ability to work with former senior executives or partners in an advising capacity in addition to staffing specific projects; Catalant Teams – offering flexible teams of experienced consultants for complex and global engagements; and Benches – providing clients access to benches of pre-qualified consultants expert in many areas like transformation, a Catalant speciality. In addition, Catalant’s support of its expert community, through tools that help them deliver work more effectively like access to market data and best practices, developing and co-marketing new products and service lines, and personal growth and development experiences, helps Catalant experts deliver their best work.

Growing through partnership. Consulting legend Bill Achtmeyer, a consulting legend and founder of Parthenon (acquired by EY) and now Acropolis Advisors sees Catalant as a key talent partner for their major projects. Acropolis is one of several active global partnerships Catalant has established. Achtmeyer described the relationships with Catalant this way in a recent interview: “Catalant provides us amazing leverage by helping us identify from their network the right consultants with deep industry expertise, in the right geography, at the precise time we need them. This allows my partners to spend their full time helping solve the client’s issues.”

Adding critical leadership. CEO Petitti made a big statement of conviction in bringing on board Roeland Vertriest as President and Chief Commercial Officer. Vertriest, a former McKinsey transformation expert, led a 4-year transformation at DuPont as Chief Transformation Officer working closely with Catalant experts. As the relationship matured, Petitti recognized Vertriest as an important addition to the company. Catalant expects to continue to add people on a very selected basis who bring unique value to its clients.

The intangibles on which success depends. Like all transformations, the very tangible outcomes expected of Consulting 2.0 stand on the shoulders of intangibles: a fuller, deeper, relationship with Catalant’s clients and true partnership with top experts, enabled by technology. Catalant is positioned to deliver on both. Unlike the heyday of traditional consulting, corporate leaders now enjoy ample access through the internet to extraordinary data, cases, and informational resources on almost any topic. They’re less willing to pay high prices for bright but inexperienced junior consultants. Catalant recognizes this and is uniquely able to provide at scale what clients are increasingly demanding.

Here’s how Petitti sees it. “The reasons to hire a traditional firm are disappearing. At Catalant we believe companies are done paying traditional firms for consultants with little to no experience at a 400% markup. When the best people from those firms are now available and can be combined with people with deep operating experience and accessed at a fraction of the cost, companies get a better outcome. Everything Clay Christensen predicted 10 years ago about consulting’s impending disruption is happening now, and we see it every day with our F1000 and PE clients. We’re proud to partner with the best independent consultants in the world and some of the most forward-thinking corporate leaders, and excited to continue to work with them to drive the transition to Consulting 2.0.”

Viva la revolution!