How To Obtain Better Value From Consultants

When it comes to business villains, it is hard to say whom the general public distrusts most. Corporations in general and Big Tech in general would be contenders. As would be bankers and lawyers. But there is no doubt that management consultants are “having a moment.” The recently published book The Big Con, How the Consulting Industry Weakens Our Businesses, Infantilizes Our Governments and Warps Our Economies has been widely and often enthusiastically reviewed, while today sees the start of a BBC Radio series entitled Magic Consultants that sets out to explain where the industry came from and what it does.

Why all this interest? Partly, it must be down to the growing realization of how much influence consultants have over people’s everyday lives. Developing a response to the pandemic and helping all sorts of organizations adapt to a digital world clearly required specialist expertise that was unlikely to be readily available, while in the U.K. the disruption caused by Brexit is also demanding input from people outside government. More concerning, perhaps, is that, while proponents suggest that consultants are there to provide solutions to specific problems, once in an organization — particularly government bodies — they seem to stay. This does go some way to justifying the “Infantilizes Our Governments” claim in Mariana Mazzucato and Rosie Collington’s book. Although it is fair to say that the way to deal with that might be to change the selection criteria for the U.K. Civil Service so that there are more business-savvy people with skills in such areas as procurement and project management. Another important issue is that some of the biggest consultancies have found themselves embroiled in scandals in recent years — naturally adding to suspicion and criticism of the sector.

Mazzucato, a professor at University College, London, where she founded the Institute for Innovation and Public Purpose, has long been critical of many aspects of current business practice. So the book’s manifesto is hardly a surprise. In a response to the book, published on the U.K.’s Management Consultancies Association website, CEO Tamzen Isacsson said: “The UK civil service is one of the best in the world employing highly talented, motivated and dedicated people. Far from being infantilised, as the authors allege, the partnerships which our sector has formed with the public sector have been some of the most intellectual, dynamic and productive in the world.” Pointing out that the sector grew by 25% last year, she added: “Tens of thousands of clients use our services as they offer access to skills and capabilities not offered in house and fundamentally transfer knowledge to clients leaving them better equipped to respond to future challenges on their own.”

However, a slightly different view is offered by Stephen Newton, who after working in big consulting firms and founding a couple of start-ups, set up Elixirr in 2009. The firm listed on London’s AIM market in 2020 and billing itself as “The Challenger Consultancy” now has a market capitalization of more than £200 million ($246 million) and, with offices around the world, had revenues for last year of more than £70 million. He said: “I relate to the concept that the industry needs a shake-up. I disagree with the solutions.” Mazzucato is essentially arguing that the consultancy problem is symptomatic of the “hollowing out” of personnel and hence expertise from both government and business and that the way to advance is to rebuild those capabilities. But Newton counters that “government will never be able to bring together the talent that consultants can.” Higher pay and the chance to work in a high-performance culture are among the factors that attract the best and the brightest to the industry, he argues. There is also surely a case for those in government or indeed in business to draw on the expertise of those who might have previously encountered the problems they are facing — although there is also an argument that applying lessons from one situation or industry to another does not always work.

Newton suggests that the problem for government departments, in particular, lies in how they go about purchasing. They need to break contracts into manageable chunks so that smaller consultancies as well as the larger ones have a chance of bidding. They also need to be more prepared to hire and fire, using performance against goals as a measure, rather than allowing firms to effectively become embedded. All purchasers of consulting services, whether in government or elsewhere, also need to remember that the value of consultants lies not just in providing expertise and personnel but in offering a contrarian view. “That’s where consultants should play a role,” he says.