04 Dec 12 Lessons from Monitor

The bankruptcy of Monitor Group, the consulting firm, has come as a shock to the followers of the strategy gurus who set up the firm – Michael Porter and Mark Fuller. No management education is complete without a cogitation of the Porter’s five force model. 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’ (Darkness under a lamp) aptly describes Monitor’s situation. A firm that showed light to the others, lost its own way.

The recession of 2008 dealt the first blow to Monitor and from there it was all downhill for the company. In 2010 it hived off its research arm, Grail Research; and in 2012, it filed for bankruptcy.

There are many views on what went wrong for the Monitor Group. Taking on an assignment for the late  Libyan dictator Muammar Khadafy between 2006 and 2008, which Monitor later regretted, may have been one of them, but could not have been the only one. The Economist magazine suggested that its structure had become unwieldy and unaffordable as a results of its entry into multiple areas such as executive education, nonprofit consulting, government work, etc. The Forbes magazine feels that the firm’s customers stopped seeing value in what it was offering.

It is difficult to say who is right. In all likelihood, all the above factors and more, together brought the firm down.

What lesson does the Monitor story have for competitive intelligence and strategy professionals? I feel there are no new lessons to learn, but the saga certainly reinforces the old ones.

Nobody is “safe”

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 organizations can, and do have blind spots, which they need to proactively be alert to.

There is no such thing as sustainable competitive advantage

Some companies have a competitive advantage arising from government regulation. For example, if companies need to have licenses for operating certain businesses, then those that have got the licenses have a competitive advantage as long as the government does not issue fresh licenses.

Most other companies need to continually innovate to deliver value to their customers in different ways, in order to survive and stay ahead of competition. Any competitive advantage gained is lost very quickly as the competitors counter these with other value propositions.

No-one but you can solve your problems

If customers stopped coming to Monitor, it was because the firm had stopped delivering enough 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 the problems go away. Is the demise of Monitor a signal to the large global consulting firms?

What lessons have YOU found in the Monitor saga? Do share your views…

Varsha Chitale

Varsha led the competitive intelligence practice at ValueNotes. As part of her drive to educate India Inc. on the merits of competitive intelligence, she often conducted webinars and seminars on CI for senior executives of Indian companies.

  • Jayant Jain
    Posted at 05:57h, 21 December Reply

    I certainly agree that the Monitor Group is not delivering value for what it charges its Clients. having interacted with them over the past 5 years it appears that their prime concern in dealing with clients has been to prolong their paid engagement thereby leading to a situation that they have given recommendations to use methods, processes and models which don’t really deliver anything except billings to Monitor. Really sad to see an organisation with such great beginnings to come to such a sorry state.
    However it goes to state that you cannot fool everybody too long !!

  • Karandeep SIngh
    Posted at 07:59h, 09 December Reply

    One thing that surprises me most is the fact that almost all of us have used Porter’s strategic tools and we have seen how these add value to final analysis!
    I think Valuenotes has done one thing diferently which is trying to evaluate how Monitor Group fell into the trap rather than criticizing Porter and its application in today’s business.

    The best lesson that I as a professional have learned from Monitor’s saga is not in sake of Monitor Group but Deloitte who has shown keen interest in buying Monitor Group’s assets. They have been quick to realize the post acquisition synergies and how a different customer segment can be catered though the buyout.

    The most probable thing that companies need to realize in future is to keep a focus on their USP’s. Being in a service induAtleast 60% resources of a company should

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