***Before reading today’s post, I want you to look at these four graphs. I am not going to explain them to you at this point. I will explain each graph in detail at the end of the post.***
GRAPH 1
GRAPH 2
GRAPH 3
GRAPH 4
A QUESTION TO TRADITIONAL CONSULTING, ANALYST, AND SOLUTION PROVIDERS: If your methodology works, why won’t you stake your fee on it?
A Simple Proposal
What if consulting engagements worked like this:
A blended model. Skin in the game. Shared risk, shared reward.
This isn’t radical. It’s how most performance-based relationships work:
- Sales professionals earn commission on closed deals
- Lawyers take contingency on cases they believe in
- Private equity operators tie compensation to portfolio returns
- Turnaround specialists stake fees on survival
So why don’t the world’s largest consulting firms offer outcome-based pricing?
The answer reveals everything about how the industry actually works.
Reason 1: It Would Require Assessing Readiness
To guarantee outcomes, you need to know upfront whether the organization can execute.
That means assessing:
- Structural coherence
- Decision ownership
- Agent alignment
- Governance physics
- Practitioner readiness
This is Phase 0 work — the diagnostic that determines whether transformation is even feasible.
But Phase 0 creates a problem.
It might reveal: “You’re not ready. Don’t do this yet.”
That recommendation shrinks the engagement. Or kills it entirely.
No firm optimizing for revenue wants a methodology that tells clients to wait.
Reason 2: It Would Force Them to Decline Work
If your fee depends on outcomes, you have to say no to clients unlikely to succeed.
Current model:
- Take every engagement
- Bill every hour
- Deliver the artifacts
- Move on
Outcome model:
- Assess readiness first
- Decline engagements with low success probability
- Accept accountability for results
- Stay connected through the outcome period
The math doesn’t work for firms built on utilization rates and partner leverage.
No compensation model in Big 4 or MBB rewards partners for turning away revenue — even revenue that’s unlikely to produce client value.
Reason 3: The Attribution Problem Is Convenient
When projects fail today, consultants have a ready defense:
“We delivered excellent recommendations. The client failed to execute.”
This works because the contract separates advice from implementation, deliverables from outcomes, recommendations from results.
Outcome-based pricing eliminates that escape hatch.
If outcomes are in the contract, execution failures become the consultant’s failures. You can no longer deliver a PowerPoint and walk away.
The ambiguity that protects margins today would become the liability that destroys them tomorrow.
Reason 4: Timelines Don’t Match Compensation Cycles
How do you structure partner bonuses around outcomes that won’t be measurable until after the team has moved to three other clients?
The entire economic architecture of consulting — from associate utilization to partner profit-sharing — is built on short-cycle metrics.
Outcome-based pricing requires long-cycle accountability.
Those two systems are structurally incompatible.
Reason 5: Measurement Would Expose the Gap
Outcome-based pricing requires defining success upfront:
- What does “digital transformation” mean in measurable terms?
- What does “procurement optimization” look like in 24 months?
- What’s the baseline? What’s the target? Who measures? Who validates?
Most consulting deliverables are deliberately ambiguous:
- “Roadmap delivered”
- “Framework complete”
- “Recommendations accepted”
- “Change management program launched”
These are activity metrics, not outcome metrics.
Specificity is avoided because specificity creates accountability.
If you define success precisely, you can fail precisely. The current model prefers soft landings and interpretation flexibility.
Reason 6: The Buyer Often Doesn’t Want Outcomes Either
Remember why many consulting engagements are actually purchased:
- Validate a decision already made
- Provide board-level cover
- Signal action to stakeholders
- Delay difficult internal conversations
- Transfer ownership of uncomfortable conclusions
When consulting is bought for political purposes, implementation success is secondary.
The buyer’s incentive and the consultant’s incentive align around activity, not results.
Why would either party pay a premium for outcome guarantees when outcomes aren’t the actual objective?
What Outcome-Based Pricing Would Actually Require
For a consulting firm to offer blended outcome-based pricing, they would need to:
1. Build a Readiness Assessment Capability
Not a sales qualification. A genuine diagnostic that determines whether the organization can execute — and recommends against engagement when the answer is no.
2. Accept Engagement Selectivity
Decline work where success probability is low, even when the client is willing to pay full fees.
3. Define Success Precisely
Jointly establish measurable outcomes before the engagement begins, with clear baselines, targets, timeframes, and validation methods.
4. Maintain Long-Term Accountability
Stay connected to the client through the outcome measurement period — not just the delivery period.
5. Restructure Partner Economics
Shift compensation from utilization and origination to outcome realization — a fundamental change to how consulting partnerships work.
6. Accept Shared Risk
Put meaningful fee percentage at risk based on results, not just effort.
Who Actually Does This?
Some do. Selectively.
What do these have in common?
They’re structured around outcomes from the beginning. They select clients carefully. They define success precisely. They stay accountable through results.
Who Doesn’t?
The $358 billion consulting machine.
Not because they can’t.
Because they don’t have to.
The current model works — for them:
- Revenue keeps rising
- Failure rates stay constant
- The same clients return after failures
- Accountability resets with each new executive sponsor
Why would you change a model that produces record partner payouts regardless of client outcomes?
The Question That Changes Everything
Next time a consulting firm proposes a transformation engagement, ask:
“What percentage of your fee are you willing to tie to measurable outcomes over the next 24 months?”
Watch the response carefully.
If the answer is “that’s not how we structure engagements,” you’ve learned something important.
If the answer is “let’s discuss what success would look like and how we’d measure it,” you might be talking to someone who actually believes in what they’re selling.
The Bottom Line
Outcome-based pricing isn’t complicated.
It’s avoided.
Because it would require:
- Assessing readiness before recommending action
- Declining engagements unlikely to succeed
- Defining success precisely enough to be measured
- Staying accountable beyond the deliverable
- Sharing risk instead of transferring it
The firms that won’t do this are telling you something about their confidence in their own methodology.
The firms that will are telling you something too.
Choose accordingly.
The structure of the fee reveals the structure of the belief.
NOW – LET’S REVISIT THE EARLIER GRAPHS
GRAPH 1
Graph 1: The Rise of Outcome-Aligned Advisory Models (1990-2025) — Line Graph
This graph tracks the 35-year evolution of five advisory models that share a common characteristic: skin in the game. The most striking pattern is the explosive rise of fractional executives (green line), which remained nearly flat from 1990 through 2015, then accelerated dramatically post-COVID to become the fastest-growing model by 2025. PE Operating Partners and Boutique Firms show steady, consistent growth over the entire period, reflecting institutional recognition that outcome alignment produces better results. Performance Marketing peaked around 2020 and has since declined — a warning signal that outcome measurement alone isn’t enough once it becomes commoditized. Turnaround Specialists remain cyclical, spiking during crises (2008, 2020) but otherwise stable. The subtitle asks the essential question: What do all these models have in common? Skin in the game.
GRAPH 2
Graph 2: Growth Comparison — Horizontal Bar Graph
This horizontal comparison makes the growth differential impossible to ignore. Fractional executives dominate with 567% ten-year growth and 150% five-year growth — numbers that dwarf every other model. Boutique firms show healthy acceleration (64% / 29%), while PE Operating Partners demonstrate steady institutional adoption (46% / 19%). The negative bars tell an equally important story: Performance Marketing (-6% / -11%) shows what happens when outcome metrics become commoditized, and Turnaround Specialists (-13% in 5-year) reflect cyclical demand tied to economic conditions rather than structural growth. The visual hierarchy is immediate — the models with the most direct fee-outcome linkage are growing fastest.
GRAPH 3
Graph 3: Why Outcome-Aligned Models Work — Stacked Bar (Three Factors)
This graph deconstructs why certain models outperform by scoring each on three factors: Fee-Outcome Linkage (green), Result Accountability (blue), and Client Selectivity (burgundy). Turnaround Specialists score highest (27) because survival metrics create absolute accountability — the company either lives or dies. PE Operating Partners and Fractional Executives tie at 26, reflecting equity stakes and reputation-as-product dynamics respectively. The critical insight is the dashed line separating outcome-aligned models (scores 20-27) from Traditional Consulting (score 7). The gap isn’t marginal — it’s a 3x-4x difference in structural alignment. The bottom caption states the thesis directly: Higher scores = More skin in the game = Better outcomes.
GRAPH 4
Graph 4: Which Advisory Models Are Growing Fastest? — 5-Year Focus Bar Graph
This is the simplest and most powerful visualization. By focusing only on 5-year growth (2020-2025), it shows what the market is choosing right now. The green bars (positive growth) versus red bars (negative growth) create instant clarity. Fractional Executives tower above everything at +150%, with Boutique Firms (+29%) and PE Operating Partners (+19%) showing solid growth. The red bars — Turnaround Specialists (-13%) and Performance Marketing (-11%) — represent models that are either cyclical or commoditizing. The callout box states the thesis: Fractional executives have the most direct skin in the game: reputation IS the product. This is the graph to use when you need one image to prove that the market is already voting for outcome-aligned models.
-30-
ONE FINAL THOUGHT
“The resistance to outcome-based pricing isn’t a business model choice. It’s a governance failure. The same firms that advise on corporate social responsibility, stakeholder accountability, and Triple Bottom Line reporting refuse to apply those standards to their own work. They’ve built an industry on telling others to be accountable while structuring themselves to avoid it.”
Procurement Insights
The Question They Hope You Never Ask
Posted on December 17, 2025
0
***Before reading today’s post, I want you to look at these four graphs. I am not going to explain them to you at this point. I will explain each graph in detail at the end of the post.***
GRAPH 1
GRAPH 2
GRAPH 3
GRAPH 4
A QUESTION TO TRADITIONAL CONSULTING, ANALYST, AND SOLUTION PROVIDERS: If your methodology works, why won’t you stake your fee on it?
A Simple Proposal
What if consulting engagements worked like this:
A blended model. Skin in the game. Shared risk, shared reward.
This isn’t radical. It’s how most performance-based relationships work:
So why don’t the world’s largest consulting firms offer outcome-based pricing?
The answer reveals everything about how the industry actually works.
Reason 1: It Would Require Assessing Readiness
To guarantee outcomes, you need to know upfront whether the organization can execute.
That means assessing:
This is Phase 0 work — the diagnostic that determines whether transformation is even feasible.
But Phase 0 creates a problem.
It might reveal: “You’re not ready. Don’t do this yet.”
That recommendation shrinks the engagement. Or kills it entirely.
No firm optimizing for revenue wants a methodology that tells clients to wait.
Reason 2: It Would Force Them to Decline Work
If your fee depends on outcomes, you have to say no to clients unlikely to succeed.
Current model:
Outcome model:
The math doesn’t work for firms built on utilization rates and partner leverage.
No compensation model in Big 4 or MBB rewards partners for turning away revenue — even revenue that’s unlikely to produce client value.
Reason 3: The Attribution Problem Is Convenient
When projects fail today, consultants have a ready defense:
This works because the contract separates advice from implementation, deliverables from outcomes, recommendations from results.
Outcome-based pricing eliminates that escape hatch.
If outcomes are in the contract, execution failures become the consultant’s failures. You can no longer deliver a PowerPoint and walk away.
The ambiguity that protects margins today would become the liability that destroys them tomorrow.
Reason 4: Timelines Don’t Match Compensation Cycles
How do you structure partner bonuses around outcomes that won’t be measurable until after the team has moved to three other clients?
The entire economic architecture of consulting — from associate utilization to partner profit-sharing — is built on short-cycle metrics.
Outcome-based pricing requires long-cycle accountability.
Those two systems are structurally incompatible.
Reason 5: Measurement Would Expose the Gap
Outcome-based pricing requires defining success upfront:
Most consulting deliverables are deliberately ambiguous:
These are activity metrics, not outcome metrics.
Specificity is avoided because specificity creates accountability.
If you define success precisely, you can fail precisely. The current model prefers soft landings and interpretation flexibility.
Reason 6: The Buyer Often Doesn’t Want Outcomes Either
Remember why many consulting engagements are actually purchased:
When consulting is bought for political purposes, implementation success is secondary.
The buyer’s incentive and the consultant’s incentive align around activity, not results.
Why would either party pay a premium for outcome guarantees when outcomes aren’t the actual objective?
What Outcome-Based Pricing Would Actually Require
For a consulting firm to offer blended outcome-based pricing, they would need to:
1. Build a Readiness Assessment Capability
Not a sales qualification. A genuine diagnostic that determines whether the organization can execute — and recommends against engagement when the answer is no.
2. Accept Engagement Selectivity
Decline work where success probability is low, even when the client is willing to pay full fees.
3. Define Success Precisely
Jointly establish measurable outcomes before the engagement begins, with clear baselines, targets, timeframes, and validation methods.
4. Maintain Long-Term Accountability
Stay connected to the client through the outcome measurement period — not just the delivery period.
5. Restructure Partner Economics
Shift compensation from utilization and origination to outcome realization — a fundamental change to how consulting partnerships work.
6. Accept Shared Risk
Put meaningful fee percentage at risk based on results, not just effort.
Who Actually Does This?
Some do. Selectively.
What do these have in common?
They’re structured around outcomes from the beginning. They select clients carefully. They define success precisely. They stay accountable through results.
Who Doesn’t?
The $358 billion consulting machine.
Not because they can’t.
Because they don’t have to.
The current model works — for them:
Why would you change a model that produces record partner payouts regardless of client outcomes?
The Question That Changes Everything
Next time a consulting firm proposes a transformation engagement, ask:
Watch the response carefully.
If the answer is “that’s not how we structure engagements,” you’ve learned something important.
If the answer is “let’s discuss what success would look like and how we’d measure it,” you might be talking to someone who actually believes in what they’re selling.
The Bottom Line
Outcome-based pricing isn’t complicated.
It’s avoided.
Because it would require:
The firms that won’t do this are telling you something about their confidence in their own methodology.
The firms that will are telling you something too.
Choose accordingly.
The structure of the fee reveals the structure of the belief.
NOW – LET’S REVISIT THE EARLIER GRAPHS
GRAPH 1
Graph 1: The Rise of Outcome-Aligned Advisory Models (1990-2025) — Line Graph
This graph tracks the 35-year evolution of five advisory models that share a common characteristic: skin in the game. The most striking pattern is the explosive rise of fractional executives (green line), which remained nearly flat from 1990 through 2015, then accelerated dramatically post-COVID to become the fastest-growing model by 2025. PE Operating Partners and Boutique Firms show steady, consistent growth over the entire period, reflecting institutional recognition that outcome alignment produces better results. Performance Marketing peaked around 2020 and has since declined — a warning signal that outcome measurement alone isn’t enough once it becomes commoditized. Turnaround Specialists remain cyclical, spiking during crises (2008, 2020) but otherwise stable. The subtitle asks the essential question: What do all these models have in common? Skin in the game.
GRAPH 2
Graph 2: Growth Comparison — Horizontal Bar Graph
This horizontal comparison makes the growth differential impossible to ignore. Fractional executives dominate with 567% ten-year growth and 150% five-year growth — numbers that dwarf every other model. Boutique firms show healthy acceleration (64% / 29%), while PE Operating Partners demonstrate steady institutional adoption (46% / 19%). The negative bars tell an equally important story: Performance Marketing (-6% / -11%) shows what happens when outcome metrics become commoditized, and Turnaround Specialists (-13% in 5-year) reflect cyclical demand tied to economic conditions rather than structural growth. The visual hierarchy is immediate — the models with the most direct fee-outcome linkage are growing fastest.
GRAPH 3
Graph 3: Why Outcome-Aligned Models Work — Stacked Bar (Three Factors)
This graph deconstructs why certain models outperform by scoring each on three factors: Fee-Outcome Linkage (green), Result Accountability (blue), and Client Selectivity (burgundy). Turnaround Specialists score highest (27) because survival metrics create absolute accountability — the company either lives or dies. PE Operating Partners and Fractional Executives tie at 26, reflecting equity stakes and reputation-as-product dynamics respectively. The critical insight is the dashed line separating outcome-aligned models (scores 20-27) from Traditional Consulting (score 7). The gap isn’t marginal — it’s a 3x-4x difference in structural alignment. The bottom caption states the thesis directly: Higher scores = More skin in the game = Better outcomes.
GRAPH 4
Graph 4: Which Advisory Models Are Growing Fastest? — 5-Year Focus Bar Graph
This is the simplest and most powerful visualization. By focusing only on 5-year growth (2020-2025), it shows what the market is choosing right now. The green bars (positive growth) versus red bars (negative growth) create instant clarity. Fractional Executives tower above everything at +150%, with Boutique Firms (+29%) and PE Operating Partners (+19%) showing solid growth. The red bars — Turnaround Specialists (-13%) and Performance Marketing (-11%) — represent models that are either cyclical or commoditizing. The callout box states the thesis: Fractional executives have the most direct skin in the game: reputation IS the product. This is the graph to use when you need one image to prove that the market is already voting for outcome-aligned models.
-30-
ONE FINAL THOUGHT
“The resistance to outcome-based pricing isn’t a business model choice. It’s a governance failure. The same firms that advise on corporate social responsibility, stakeholder accountability, and Triple Bottom Line reporting refuse to apply those standards to their own work. They’ve built an industry on telling others to be accountable while structuring themselves to avoid it.”
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