| | By Mick James
I recently argued that
consultants should value
their advice more, and
make sure that clients do
the same (not least by
following it) by charging
a reasonable price.
Of course, what I was
forgetting was that some
people still value
consultancy at naught: a
recent Observer
contained yet another
apparently unprovoked
attack on the consultancy
industry. It’s mainly old
stuff, but its repeated
recourse to figures shows
a conundrum consultancy
increasingly faces: the
more successful it is,
the more clients come
back for repeat business
or discover the benefits
of consultancy for the
first time, the more
people will be able to
come up with some
ridiculous figure and
claim it’s all money down
the drain.
The figure in question
is $100bn, a
finger-in-the-air
estimate of consultancy
spend, which according to
Simon Caulkin, the
piece’s author, is the
astonishing cost of what
is little more than a
global corporate comfort
blanket. The world’s
managers are “advice
junkies”: “the
unstoppable progression
of the management advice
industry is monument
above all to the power of
faith and the need of
senior managers for
reassurance”.
This is because, he
says, like advertising,
consultancy has “the
gravity-defying ability
to keep on growing,
despite the lack of any
real proof that it does
any good”. I’m sure
advertising professionals | |
|
| | and their clients might
have something to say,
not least the ones using
the increasingly powerful
metrics of advertising
effectiveness developed
by the, ahem, consulting
industry.
Analysing the overall
effectiveness of the
consulting industry would
be a complex task, but
for Caulkin it’s easy: if
something has gone wrong,
consultants must be at
fault. The credit crunch
for instance: despite
consultancy firms
“pocketing” £1.7bn from
the financial sector “for
advice alone…this advice
has at best not prevented
client companies from
making some very bad
management calls”. Notice
how the goalposts have
moved: at one moment
consultancy is useless
handholding. Next it
falls short of the gold
standard of making not
just its clients, but an
entire industry
infallible.
It seems there’s an
almost wilful inability
on the part of business
commentators to grasp the
scale or the complexity
of the consultancy
industry, or the level of
detail at which
consultants work. Yet
Caulkin himself is well
aware that not all
consultancy projects
involve strategic advice
or management support,
complaining later on in a
typically broad-brush
statement that “the big
consultancies…have given
us the IT-dominated
mass-production service
factories that are as
customer-unfriendly,
unpleasant to work in and
inefficient in the
private sector (bank and
mobile phone contact
centres) as in the public | |
|
| | (HM Revenue and
Customs)”.
That’s a highly
debatable statement in
any case. All the people
who answer the phone at
my own bank seem as happy
as pigs on Prozac. And I
know for a fact that a
couple of the best call
centres have benefited
from consultancy advice,
because I’ve both written
the case study and seen
the results as a
customer.
But it would take a
research project of
massive scale and with
unprecedented access to
confidential client
information, to establish
whether those companies
that had made “bad
management calls” or had
rubbish call centres were
more likely to be
consultancy users, and
whether this had anything
to do with the
consultancy offered. And
what would it prove?
“Overall value” means
very little for any
industry: consultancy
projects surely need to
be evaluated on a
case-by-case basis. A
recent case study sent to
me by consultancy Abeam,
featured here recently,
illustrates this: it is
going to work with
Scottish Water to improve
the scheduling of its
customer service and
maintenance activities.
As Scottish Water is
independently assessed by
the Water Industry
Commission for Scotland,
the success or failure of
the project will be
independently
demonstrated by its
Performance Assessment
scores.
It would be nice if
every project were as
neat as this. Caulkin
complains that clients | |
|
| | spend all this money on
an industry that is
“unregulated” and has “no
statutory standing” and
that also has “no
qualification nor proven
body of theory or
practice”. The first two
statements are true, but
I’m not sure if they
would help. The last are
demonstrably false. We’ve
long had the gold
standard Certified
Management Consultant
(CMC, administered by the
Institute of Business
Consulting) and
consultants regularly
acquire many other
qualifications from MBAs
to Prince certification.
They also draw on a wide
range of well-established
theory and methodologies,
both within management
studies and from the
social sciences.
Not that this would
impress Caulkin, because
his next reference is to
“recent research” – he
doesn’t say from where –
that suggests that “the
most promising management
practices are not someone
else's but lurking hidden
in an organisation's own
values and
traditions...who is more
likely to excavate them:
a bright young consultant
straight off the MBA
production line, or its
own employees?”
That’s certainly true
in part, and any
consultant worth his or
her salt will head
straight for the goldmine
that lies inside the
heads of the employees.
Many will make
“unleashing the power of
your employees” an
explicit brand promise,
and will leave mechanisms
behind to ensure that the
flow of ideas remains
constant without the need
for further intervention. | |
|
| | But you can’t seriously
suggest that companies
should remain immune to
outside ideas (what would
be the point of
management journalists in
that case?) So
consultants will also
temper this internal
resource with their own
experience and ideas, not
least because they are
highly unlikely to be
“bright young MBAs”: the
sweet-spot in consultancy
recruitment has long been
for 10 years or more of
experience and a mixture
of consultancy and
management experience
(Caulkin naturally sees
the fact that many
managers are now
ex-consultants and
vice-versa as evidence of
a sinister freemasonry).
Of course, consultants
that succeed in this will
walk straight into the
next clichéd criticism:
“they stole our ideas and
sold them back to us”.
But – to go back to my
earlier point – if what
it takes to get you to
act on a seriously good
idea is a major
consultancy brand name on
the report and a eye
watering final bill then
so be it – the
alternative is to do
nothing. If consultancy
is about anything, it’s
about making things
happen. Caulkin
concludes, with evident
sadness, that
“consultants are not
going to be out of a job
any time yet”. As long as
management journalists
continue to recycle the
same tired clichés about
consultancy, neither will
they. | |
|
Previous Page 