<div>The bankruptcy of consulting firm Monitor Group surprised many, especially followers of the firm's founders — strategy gurus Michael Porter and Mark Fuller. (No management education is complete without a cogitation of the Porter's five force model.) Monitor, known for its high quality work, was considered to be a top ranking strategy consulting firm along with firms like Bain, Booz & Company, The Boston Consulting Group and McKinsey.<br /><br />How is it possible that the very firm that advised corporations and governments around the world on business strategy was not able to formulate a strategy for its own survival? The Hindi saying 'Diye Tale Andhera' (It is dark under a lamp) aptly describes Monitor's situation. A firm that showed light to others lost its own way.<br /><br />The recession of 2008 dealt the first blow to Monitor and from there on it was all downhill for the company. In 2010 it hived off its research arm, Grail Research; and in 2012, it filed for bankruptcy.<br /><br />There are many views on what went wrong for the Monitor Group. Taking on an assignment for the late Libyan dictator Muammar Gaddafi between 2006 and 2008, which Monitor later regretted, may have been one of them, but could not have been the only one. <em>The Economist</em> magazine suggests that its structure had become unwieldy and unaffordable as a result of its entry into multiple areas such as executive education, nonprofit consulting, government work, etc. <em>Forbes</em> magazine feels that the firm's customers stopped seeing value in what it was offering. There are dozens of opinions out there; and it is not easy to say who is right, without delving deep into the firm's history. In all likelihood, all the above factors, and more, together brought the firm down.<br /><br />What lesson does the Monitor story have for competitive intelligence and strategy professionals? What should companies do? I feel that there are no new lessons to learn, but the saga certainly reinforces many old ones.<br /><br /><strong>Nobody Is "Safe"</strong><br />All companies, no matter how knowledgeable, strong and dominant, they may seem at a given time, are vulnerable to competitive forces if they remain complacent and take their eye off the ball. All organisations can, and do have blind spots, which they need to proactively be alert to. This is borne out time and again by the number of supposed giants that have lost their edge in the market either temporarily or permanently (Kodak, RIM, Blockbuster, Apple, etc.).<br /><br /><strong>There Is No Such Thing As Sustainable Competitive Advantage</strong><br />All companies strive to gain a competitive advantage over their peers, and all of them struggle to retain it once they have it. Those who have an edge over their competitors as a result of government regulation are perhaps among the few who are able to retain it for a significant period of time. For example, if companies need to obtain licenses from the government for operating certain businesses, those that have the licenses already have a competitive advantage, until the government issues fresh ones.<br /><br />Most other companies need to continually innovate to deliver value to their customers in different ways, in order to survive and stay ahead of the competition. Any competitive advantage gained is lost very quickly as competitors counter these with similar or newer value propositions. For example, Apple dominated the PC market in the 1970s and 80s, but hit a rough patch with a fall in market share in the early 1990s. It regained its technology leadership in the 2000s with the launch of the iPod in 2001 and then the iPhone and iPad. Many competitors now have products that compete with all of these. Whether Apple is able to maintain its leadership remains to be seen.<br /><br /><strong>No One But You Can Solve Your Problems</strong><br />If customers stopped coming to Monitor Group, it was because the firm had stopped delivering value for the amount it charged its customers. Corporations have learnt over a period of time, that while they need inputs from external consultants, only they can solve their own problems. It is up to them to determine what inputs they need and seek only those. They cannot expect external consultants to make their problems go away. Is the demise of Monitor a signal to its peers, viz. the other large global consulting firms? When times were good and corporations made healthy profits, there were many who were willing to pay, what now seem like obscenely large fees, to these consultants.<br /><br />With the global economy hitting numerous rough spots, consulting budgets have reduced sharply. Companies are relying on their own managements to come up with smart competitive strategies. And that is actually how it should be. No external consultant can know a company's business better than those who run the company. That doesn't mean consultants can't add any value at all. What it means is that companies need to be very picky about what they seek from strategy consultants.<br /><br />What lessons have YOU found in the Monitor saga? Do share your views…<br /><br /><em>Varsha Chitale is a Director of ValueNotes (www.valuenotes.biz), a provider of market intelligence, research and consulting. She leads the competitive intelligence practice at the firm.</em></div>
