Consulting Magazine - February 2017

Dodd-Frank) may be scaled back. These
deregulatory actions would likely unleash
financial services companies to take on more
risk while pursuing growth opportunities,
Srikant and others agree. Expected interest
rate hikes could boost lending revenues.
 ENERGY: The President’s social media com-
munication and appointments suggest that
environmental regulations and standards
concerning fossil fuels (e.g., greenhouse gas
performance standards and fuel efficiency
standards for automobiles) will be rolled
back. The President’s election pledge to
make the country energy independent bodes
well for oil and gas companies and their
suppliers. “On the regulatory front, it is clear
that fossil fuels in the U.S. have a better fu-
ture with the [new] President than it did with
the predecessor administration,” DeLoach
notes. “The Trump administration is much
more likely to let the market figure out the
best and cheapest sources of energy and
thereby eliminate subsidies to renewables.”
 MANUFACTURING: The President has made
it clear that he intends to focus on domestic
job growth particularly in the manufacturing
industry. The methods deployed to fulfill this
campaign promise obviously will pose new
opportunities and new challenges for the
industry, especially related to their decisions
regarding where they locate production fa-
cilities and how many new jobs they create.

Any policy-driven industry impacts will occur at a time when many manufacturing sectors are in the throes of longer-term transformation due to technological advancements, such as advanced robotics and machine learning. For decades, automotive manufacturers’ core competency was “bending metal,” Iler notes. “Now, suddenly, they’re technology companies.”

 RETAIL: If new trade tariffs materialize, retailers and consumer products companies could suffer. “Go into any large U.S. retailers,” says The NorthPoint Group COO Rich Iler, “and look at how many products are made in the U.S. Not a lot…. The largest retailers are saying, ‘Where are we going to

know. That used to be about understanding markets but those insights are no longer as relevant because companies know more and more about the external environment. Clients are now looking to consultants for more specialized technical knowledge. In the manufacturing space, where information and physical assets are converging, clients are looking for an engineering point of view. These insights cannot be generic.

CONSULTING: What’s the other opportunity? SIMON: Clients need help making their organizations actually work, which ultimately depends on cross-functional coordination. If companies could coordinate across their internal silos, there would be essentially nothing for consultants to do. Consultants traditionally entered a company and, in the context of a project, created connections where there were none and created new norms to overcome functional boundaries. The project’s success depended on them by virtue of the fact that they were from outside and didn’t have to play by the rules and could therefore make it work. After the consultants left, the new process or capabilities kept working for a couple of months. Within six months, though, the company regresses 80 percent back toward its previous state. In a year, the company was 100 percent back to where they started. I think the big opportunity inside the four walls is for strategy consultants to enable the organization to function across its internal silos in a durable and sustainable way. This is ultimately a behavioral problem so there is a big opportunity for consultants to get better at the behavioral change piece.