| | By Mick James
What’s your magic
number? Before you
answer, let me explain
what I mean. A while ago
I reported on the
pre-launch of the
Management Consultancies
Association's (MCA)
report on the value of
consulting, at which
time there was a lot of
discussion about what
figure the MCA would
pick on as the average
return on expenditure
for a consultancy
project. The final
report is now out, but
before I reveal it,
let’s have some time for
reflection. What would
you say is the average
return your own clients
get for the money they
spend on your services
(answers that start with
“it depends what you
mean…” will be ignored
by the examiners).
Got a figure in mind?
Here’s the MCA’s
calculation: Very
satisfied
clients…estimate that
this value ranges from
around two up to twenty
times the cost, with
most clients assuming an
average of ten times the
fees paid. Taking
account of other
projects where value is
equivalent to price, all
this suggests that the
benefits provided by
consultancies are
equivalent in value to
around £56bn to UK
clients, a return of £6
for every £1 spent.
Now, I’ve already
written about some of my
methodological quibbles
about this project, not
the least that in trying | |
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| | to boil the diverse
world of consultancy
into a single canonical
figure, it commits some
of the same errors as
those who cobble up a
grand total of
“consultancy spend”. But
as a step beyond the
finger-in-the-air,
I’m-sure-people-
wouldn’t-keep-buying-it-i
f-it-wasn’t-any-good
stuff we’ve been rubbing
along with for years.
But most
importantly—and the
reason I’ve returned to
it—is that this figure,
this assertion if you
prefer, is now out there
and flying freely
through the world of
information. You can’t
claim to have done your
homework when writing an
article about
consultancy if you
haven’t come across this
figure. You can’t claim
to be writing a balanced
piece about this or that
organisation’s
“wasteful” spending on
consultancy without at
least referring to the
MCA’s assertion that
consultancy can in fact
reflect startlingly good
value for money.
Now, the media
doesn’t really like it
when its chosen
templates start breaking
down. Here’s Metro
ruefully letting go of
the “drugs death
teenager” trope in
reference to “plant
food” mephedrone, which
“by November had sparked
its first major concern
when it was linked to
the death of a
14-year-old schoolgirl
from Brighton (although
police later said she | |
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| | consultants have been
brought in and the
contribution they will
make.
4. Involve your staff
in the process, working
side by side with the
consultants, so that
they acquire the skills
to carry out similar
work by themselves in
the future.
5. Review the work
completed by the
consultants against the
original business case.
Who knows, we might
even begin to move to a
situation where the
non-use of outside
resources is in
question. If your
department never goes to
an outside advisor, if
every project is
completed to the highest
possible quantity using
only internal resources,
then that warrants
investigation, because
you’re either fibbing,
over-resourced or in
possession of knowledge
and expertise that
urgently needs to be
replicated. If there are
areas of your business
that could quickly (and
remember MCA set its
time horizon for
benefits at a year)
return a benefit of 8-20
times the required
investment, then why
aren’t you passionately
working to identify and
promote those projects?
Can you give a
convincing account of
why you are not changing
when the outside world
so clearly is?
Now I’m not
suggesting that we
return to the days when | |
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| | it was considered a good
idea just to get the
consultants in to run a
slide rule over the
business and come up
with some ideas
(although I do promise
to stop what I’m doing
and immediately become a
consultant myself if
those days return).
But we live in a
world where the
externalisation of all
kinds of resources has
become
commonplace—consultancy
has benefited to a great
extent but also has been
held back by the weird
mixture of guilt, shame
and fear that hangs
around it, to the extent
that there are still
those fairly committed
to a life of consultancy
celibacy. Well enough of
that, I say. If the
promise of an 8-20-fold
ROI isn’t enough to
encourage a little
harmless
experimentation, I don’t
know what is.
In the meantime, the
rest of you need to
spread the word. You can
get the MCA report here:
www.mca.org.uk/value-con
sulting target and
there will be updates
and case studies to back
up the argument. Blog
about it. Quote it in
your pamphlets and
websites. Buy your staff
obnoxious green
Mini-Coopers and paint
extracts from it on the
side in yellow. And
we’ll all meet back here
in a year or so and
we’ll see how it went. | |
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