| | By Mick James
Oscar Wilde once said
that "The cynic knows
the price of everything
and the value of
nothing” and certainly
in the consultancy world
there’s plenty of food
for cynics. Over the
years the Management
Consultancies
Association has got
better and better at
bludgeoning its members
into revealing their fee
income, while clients in
the public sector are
becoming more and more
adept at actually taken
some note of what they
spend.
The result has been
that while we now have a
pretty clear view of the
overall cost of
consultancy, for a lot
of people that is all
they see—a massive cost.
And while for many years
the industry has tried
to get people to focus
on the value of outputs
of consultancy rather
than the cost of the
inputs, it has been less
successful at explaining
exactly what those
inputs are or might be.
It makes the
“national conversation”
about consultancy rather
one-sided, and in an
attempt to fill this
void the MCA has
undertaken an ambitious,
not to mention brave
project to quantify the
value of consultancy and
come up with a single
“iconic figure” for the
average return on
investment for a
consultancy project.
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The MCA believes this
is the largest project
of this kind ever
undertaken by a
professional services
industry, and is well
aware of the
methodological minefield
it’s entering. Indeed,
the business schools the
MCA initially approached
said it was impossible.
The MCA initially
approached its members
for full access to their
internal customer
satisfaction surveys,
and then to follow this
up with in-depth
interviews with 30 or so
clients. Collating all
this data was in itself
no mean feat, as every
consultancy has its own
particular take on
assessing customer
satisfaction.
But boiling it down
to crude terms, the
research team concluded
that, in the main,
consultancy customers
could be divided into
two groups: the
satisfied and the very
satisfied (only a
vanishingly small number
of respondents declared
themselves
“dissatisfied”). They
also found another
division in those they
interviewed
in-depth—those who felt
they had “got what they
paid for” and those who
felt they had received a
return which was a
multiple of the cost of
consultancy.
The team then made
what can only be
described as a leap of | |
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| | greater or much smaller.
I also worry that by
focusing too much on
measurable returns we
risk narrowing the scope
of consultancy. It’s
ironic, but the projects
that deliver the
smallest return are
probably the easiest to
quantify—because they
deal in known risks
against modest
ambitions. The more
ambitious the project,
the greater and more
diffuse the returns—and
the greater the risk.
One shouldn’t also
neglect the extent to
which consultancy (and
change projects
generally nowadays) is
not in fact seen as
investment because it is
more about the
short-term survival of
the company.
There are any other
points I could make, but
let’s not pick holes in
the MCA’s
methodology—what they
have built is an
impressive model of how
consultancy can deliver
its benefits, and
hopefully this will feed
into consultancy
discourse and become a
standard for how
consultancies discuss
and measure value
achieved with their
customers in the future.
Whether it will have
much impact on the
“national conversation”
about consultancy is
another matter. It’s not
exactly as if the people
who write and talk
rubbish about | |
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| | consultancy don’t know
any better. They’re
about as susceptible to
rational, evidence-based
argument as any
conspiracy-theorists.
They already believe
that consultants charm
and con their way into
getting clients to buy
projects in the first
place. The fact that the
clients then go on to
tick satisfaction
surveys and commission
more projects will just
be seen as evidence of
how thoroughly
bamboozled they have
been.
Where the project has
the potential to deliver
the most benefit in my
view is in the debate on
public sector
consultancy spending.
Here we are on the brink
of a massive
foot-shooting exercise,
with politicians
threatening to
simultaneously demand
massive change from
public institutions
while depriving them of
the means to implement
it.
Those in the private
sector who continue to
be blind to the obvious
benefits of outside
advice perhaps deserve
what’s coming to them.
To close with the words
of another 19th century
genius, Charles Darwin,
who said “It is not the
strongest of the species
that survives, nor the
most intelligent, but
the one most responsive
to change.” | |
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