The credit crisis continues to plague our economy. We've all read the innumerable articles of job cuts by the thousands, banks shutting down their mortgage lending units, major shifts in power in the executive ranks and approximations of how much more pain we will likely encounter before the situation is reversed. But it's not every day that you read about how the credit crisis is affecting the consulting industry, and what consultants are doing to remedy the situation.
This article in Consultingmagazine offers musings from leaders of top consulting firms regarding the state of the credit crisis, what consultants can do to help and where the crunch will leave the financial services industry in the future. Michael Poulos, Oliver Wyman managing director and head of the firms financial services in North America, comments on the credit crisis as a result of risks taken since late 2004, when investors tried to piggy-back on the success of the financial services market of the prior 20 years. He states, "What we're seeing now is essentially the blowback from an 18-month period of everyone trying to stay at the party too long." Poulos continues, "That's going to work itself out eventually: we'll have our hangover, and then we'll be done. & When it is over, it's going to be much tougher to make money in financial services than it has been for the last 20 years."
To help banks adapt to the changed environment post-crisis, they'll need to adopt cost-cutting measures, stronger technical and analytical capabilities, improved customer management capabilities and the ability to prevent future recurrences by identifying the causes of this one - all of which call for a consultant's informed perspective. Sean Culbert, an IBM Global Services business transformation consultant, explains that consultants are now helping financial services clients identify the problematic areas of their business that contributed to their current troubles. This marks a major shift from the strategic consulting of the recent past, where the emphasis was on "selling more, safer."
And as consulting firms help financial services companies overcome this hurdle by analyzing past mistakes and making adjustments for a successful bounce-back, Pierre Nanterme, Accenture financial services operating group CEO, offers some motherly wisdom: "The exercise of 'lessons learned' cannot be initiated only during or after adverse circumstancesthough it might seem more apparent to conduct such an exploration when losses are incurred,' adding, "It should be a regularly utilized management and growth tool." Well, better late than never!
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