Industry & Career Insights

Robo-Advisers Are Coming to Consulting and Corporate Strategy

“Robo-advisers” are starting to become a prominent feature for those seeking financial advice, and such advisers are only expected to propagate across other industries. In fact, Deloitte finds that assets under automated management will “grow to U.S. $5 trillion to U.S. $7 trillion by the year 2025 from about U.S.$300 billion today.” In an article for Harvard Business Review, Thomas H. Davenport, Barry Libert, and Megan Beck discuss the consulting implications.

Rise of the Robots

Much of strategic decision-making is data-driven these days, and AI/robots are specifically excellent at making sense of data. Thus, bringing robo-advisers into strategy does not sound all that crazy. The authors provide multiple points toward that end, finding that humans are becomingly increasingly open to using AI for all sorts of things, from investment advice to movie recommendations. Incorporating AI into strategy is inevitable.

The authors discuss three strategy options that may be taken to incorporate robo-advisers into consulting:

  • Build a “pure-play” solution. Pair inexpensive robo-advice with the more expensive option to talk to a human counterpart, who can provide additional feedback and reassurance.
  • Create your own internal robo-advisory service for key decision domains.
  • Partner with or acquire an existing provider.

And if you want to know how you can continue to thrive alongside new robot counterparts, the authors provide advice there too:

  • Integrate different online advice sources and educate clients on when to use which ones.
  • Shift to providing advice on business models, not just strategy and operations.
  • Deliver behavioral coaching.

About that last point, the authors write this:

As corporate strategy advice is increasingly disrupted by algorithms and artificial intelligence, corporate advisors could coach leaders on the best approach to success using their EQ skills. As with behavioral coaches in individual investing, corporate coaches could, for example, dissuade leaders and boards from buying companies at the top of the market or selling when the markets crash. They can help them with change management as smart machines provide new insights at increasing speeds.

For further elaboration on all of these ideas, you can view the original article here: https://hbr.org/2018/01/robo-advisers-are-coming-to-consulting-and-corporate-strategy

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