Beards and pinstripes—the next big opportunity

We’ve talked before on these pages about the merits and limitations of sub-brands. While they may help to raise awareness of new capabilities, they may also underline that the sub-brand isn’t core to what the firm does. Nowhere is that debate more pressing than in a discussion about digital sub-brands. What’s next for those firms with separate digital sub-brands, if digital is becoming fundamental to everything clients do?

It’s tempting to say that digital sub-brands are reaching the end of their shelf life, and should be integrated back into the parent brands of the firms that spawned them. But recent conversations with clients have given me pause for thought.

Referring to two firms with digital sub-brands, one client says: “They’re still a bunch of number crunchers and geeks.” The digital sub-brands haven’t changed his opinions about the parent brands. Another client used the word “stuffy” to describe the culture of another firm—the opposite of the more innovative and digital image the firm’s sub-brand seeks to convey. “They realised that they can’t attract the people they need for digital,” says the CIO of an energy company in Germany, “so they had to open a new ‘digital’ office up the road that felt different.” It’s hardly a ringing endorsement of the parent brand’s ability to succeed in the digital world on its own.

So if your parent brand’s image is incongruous with the digital direction of the market (which, for most of the large, traditional consulting firms is the case), but your digital sub-brand is starting to feel like an irrelevant distinction, what do you do? Broadly speaking, we see three possibilities:

1. Reintegrate the digital sub-brand. The obvious pro here is that it’s in tune with the market—digital is rapidly colonising every consulting service, and soon there won’t be much left that’s not, in some way, digital. But if your parent brand stands for something else, how do you convince clients that you’ve changed? And perhaps even more difficult: How do you persuade people that signed up to work for, say, Deloitte Digital, that it’s the same as working for Deloitte? Will the beards want to work for the pinstripes?
2. Everything becomes digital. Sticking with Deloitte: Deloitte Digital becomes all. The child consumes the parent. There’s a chance that it may help to convince clients that a firm has truly changed, but it could also start to sound a bit quaint in the not-too-distant future: If digital has become the norm, should a firm continue to emphasise it? And how will it work internally—will the pinstripes, who’ve been around a lot longer, want to work for the beards?
3. Something in the middle. A firm could keep its digital sub-brand, while working hard behind the scenes to truly integrate its people—to get the beards and pinstripes to work together and create a firm in which the issue is addressed from the inside out, rather than the outside in.

To date, digital capabilities have been largely about acquisition—effecting change from the outside in. For those that did this most conspicuously—Deloitte and Accenture—the rewards have been handsome: In our last report on the subject, we estimated that they had a 22% share of the digital transformation market between them.

I suspect that the next major commercial advantage will come from getting option three right: firms changing themselves from the inside out, and getting their legacy and new business to truly work together. And as digital becomes more ingrained in every aspect of consulting, it’s an opportunity that’s open to every firm—not just the ones with digital sub-brands.