| | By Mick James
Will the alleged
"credit crunch" end the
good times in
consultancy? I hesitate
to use the term "credit
crunch" without scare
quotes, because as far
as I can see it's more
the end of a bizarre
period of time when you
could pretty much borrow
money for nothing and
lend it to anyone.
Friends of mine maxed
out their credit cards
and offset half their
mortgage. My wife had a
totally free punt with
thousands of pounds
worth of premium bonds.
It was fun while it
lasted but calling the
end of all that a
"financial crisis" is a
bit like calling the end
of the all-you-can-eat
buffet in Pizza Hut a
"famine". Of course the
markets haven't quite
seen it like that, and
if I was following the
general trend I would
now be selling
everything I own and
heading for the hills
with a shotgun and a
sack of Krugerrands.
I suspect the market
over-reaction has less
to do with the nature of
the immediate crisis and
more to do with the fact | |
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| | that people have been
steeling themselves for
something terrible to
happen for some time.
It's all been too easy,
this asset price
inflation. Take my house
– if you dare raise the
staggering sum now
required to buy this
heap of mouldering
brickwork – for some
time now it's been
comfortably earning more
than the people who live
in it. You'd think that
would cheer me up, but I
find it strangely
demotivating. Why should
I bother churning out
these articles, for
example, when I can stay
in bed and produce
roughly the same
economic result? Why
does my wife agonise
over whether we should
sell up and move to the
(or another) country? A
couple of years ago we
couldn't have afforded
to do either. We
wouldn't have had the
agony of choice and we
wouldn't have had the
guilt of all that
unearned cash either.
My point is this:
free stuff isn't good
for you. Cheap coal and
the captive markets of
the empire made British
industry flabby and | |
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| | reluctant to invest or
modernise. Cheap
processor power and
storage made our
applications bloated and
drowned us in a sea of
useless data.
Above all, cheap
stuff isn't good for
clever people. I have in
my possession a book
written by the late
Fanny Craddock which
describes in exquisite
detail how to organise a
motoring holiday on the
Continent in the 1940s.
Currency restrictions,
customs barriers,
logistical hurdles –
she'd overcome them all
through intellect and
willpower to vastly
increase her quality of
life in an austere age.
Now any idiot can hop on
the Eurotunnel and crack
their axles with cheap
booze. Cheapness not
only undermines the
advantage of being
clever, it actually
eliminates cleverness
itself. Why reward the
complex skills required
to fix a TV or a washing
machine when it's
cheaper to buy a new
unit than repair the old
one?
Consultants,
therefore, should
welcome the end of the | |
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| | carry trade and all the
financial shenanigans
that went with it.
Clients may no longer be
on such a spending
spree, but sooner or
later they will have to
start papering over the
cracks that they have
stopped up with cheap
money. Lecturing people
about "best practice" is
all very well but who
listened to best
practice in energy use
until prices started
rising? If all
environmentalism
succeeds in doing is to
introduce an overriding
principle of parsimony
into our thinking it
will be no bad thing.
Consultants may well
be able to wean their
clients off cheap money
and energy-binging.
These tasks will come to
seem trivial when it
comes to getting British
commerce over its
long-standing drug of
choice: cheap people,
the captain of
industry's crack
cocaine. British firms
will literally go to the
ends of the earth to
avoid sorting out a
problem as long as
there's the chance of
throwing staff at it.
This isn't a pop at the | |
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| | outsourcing or
offshoring industry.
It's a pop at the
mentality that halves
the cost of a call
centre by moving it
somewhere cheap rather
than trying to solve the
service or product
faults that are
generating the calls in
the first place. There
may be a wealth of
transformational
outsourcing stories that
go beyond cost-cutting,
but as long as they
require any intellectual
effort most clients will
stop reading at the line
that says "labour
arbitrage".
I'm too old to get
excited by predictions
of doom and gloom, but I
am prepared to accept a
bit of an austere
period. On behalf of
clever people
everywhere, I say bring
it on.
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