| | 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 | |
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| | 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 | |
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| | 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 | |
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| | 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 | |
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| | 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. | |
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