The Truth About 'consultants'

[Lonan3]

Read THIS and weep!

 

There are now half a million management consultants in the world, and they all grumble that they face one question wherever they go: yes, but what is it that you actually do? They claim to be able to enter any organisation, watch its workers for a short period, and then – using graphs, algorithms, and a jargon that makes quantum physics look like Sesame Street – render it dramatically more efficient, for a fee.

 

David Craig gives a typical explanation of what the consultants Actually Do. After getting a degree specialising in romantic poetry, he was astonished to be hired by a prestigious management consultancy, given three weeks training, and then dropped into major corporations to tell them how to run their oil rigs, menswear stores, and factories, for tens of thousands of pounds a pop. In his brave memoir Rip Off! he explains: "We were proud of the way we used to make things up as we went along... It's like robbing a bank but legal. We could take somebody straight off the street, teach them a few simple tricks in a couple of hours and easily charge them out to our clients for more than £7,000 per week." It consisted, he says, of "lies, lies and even more lies."

 

Matthew Stewart, another former consultant, summarises his high-flying years in the industry by saying: "I felt like a snake oil salesman without snake oil." When he was sent into a company, he was told to use complex formulae to analyse the productivity of its staff, but he soon realised that the results were "nearly random... Similar results could have been achieved by having four monkeys throw darts at a few matrices." Yet, on this basis, he was taking a fortune in payments, and firing thousands of productive people.

 

David Craig suggests a simple way to call their bluff. Insist that, from now on, all management consultants are paid by their results. If they promise greater productivity or higher sales, fine: don't pay them until it comes through. Today, almost no management consultancy works on this basis. If they did, they'd all be bankrupt.

 

Could 'consultancy' be the greatest 'con' of the last fifty years?

[- Paul -]

Next weeks news headlines:-

Manx Government hires consultants to produce report on consultants.

[VinnieK]

I've a sneaky suspicion that often a lot of the true value of bringing in consultants is that it allows management to avoid taking responsibility and to redirect the blame of their own faliures. If things go pear shaped, management (in this case the Government) can blame the consultants, or, more subtly, claim that since they followed apparently expert advice to the letter it must be that circumstances and unforseen factors are to blame and that faliure was unavoidable. Of course, there's also the fact that consultants provide a much needed, if expensive, security blanket to those who don't know what they're doing and feel out of their depth.

 

In other words, I wouldn't be surprised if in the main management consultants aren't providing expertise as they are a kind of modern superstition - the organizational equivalent of casting the bones or reading tea leaves.

[Tempus Fugit]

I'd not trust them any more than I would financial advisors

[Stu Peters]

I've a sneaky suspicion that often a lot of the true value of bringing in consultants is that it allows management to avoid taking responsibility and to redirect the blame of their own faliures. If things go pear shaped, management (in this case the Government) can blame the consultants, or, more subtly, claim that since they followed apparently expert advice to the letter it must be that circumstances and unforseen factors are to blame and that faliure was unavoidable. Of course, there's also the fact that consultants provide a much needed, if expensive, security blanket to those who don't know what they're doing and feel out of their depth.

 

In other words, I wouldn't be surprised if in the main management consultants aren't providing expertise as they are a kind of modern superstition - the organizational equivalent of casting the bones or reading tea leaves.

Agreed. Years ago I was approached by one of these firms who were going to make my business more profitable, and I had virtually nothing to lose because I could get a grant covering most of their costs. The result was a glossy 'report' that told me what I already knew (and had told them at the outset). I not only refused to pay for it, I also cancelled the grant application.

[manshimajin]

having just read Lonan3's post about the poor service his wife experienced in Tesco I am not sure which is worst (yes I am) consutants or poorly trained management. The former fly in, make squawing sounds, crap over the organisation and fly away never to be seen again. The latter destroy customer relationships and mess up bottom line profit.

[VinnieK]

Agreed. Years ago I was approached by one of these firms who were going to make my business more profitable, and I had virtually nothing to lose because I could get a grant covering most of their costs. The result was a glossy 'report' that told me what I already knew (and had told them at the outset). I not only refused to pay for it, I also cancelled the grant application.

 

That seems to be the story the world over. Most of the complaints I've heard about them have three key features:

 

1. They recycle what you've already told them, and thus already know;

 

2. They pepper this with 'the bleeding obvious', and sometimes even stuff that's already been implemented or is in the process of being rolled out;

 

3. Where they do have an original idea, it's generic MBA nonsense and voodoo that doesn't actually take into account the needs and practical issues of that particular business.

 

All too often calling them in either smacks of naiivity or is an indication that the business is starting to find itself "sailing without a rudder"

[T.I.N.G.]

They are hired to find the solution the hirer wants found.

[Stavros]

Quite funny if there are 500,000 management consultants in the world because they've just said that (Link:)'Councils could cut 500,000 jobs and not harm services'

 

Interesting that the management consultancy that produced the report is based here on the Isle of Man.

[Moghrey Mie]

They are hired to find the solution the hirer wants found.

 

 

I wonder whether they are ever invited back 3 years later to see how their ideas worked out.

[Stu Peters]

Trouble is, I opened my business in 1981 from a borrowed office and with no staff (posh freelancing really) - first year turnover £30k. It built organically over 10 years to a turnover of over a million with premises, staff, equipment, finance and all that other good stuff that someone with no real training has to learn on the hoof.

 

So when someone comes along and tells you that you have a good business but you could be doing so much better (and they're presumably 'business experts') it would be a foolish man who turned them down. I think most of us have insecurities - are we doing things the right way, are we missing out on something we could do better...and these people prey on that insecurity and (in my case) add bugger all but a bill for stating the obvious. I guess that's the situation with politicians where they need external validation of their plans and/or a check on what their own officers are telling them.

 

I'd do it again - but only on a PBR (paid by results) basis - I don't expect many would proceed with a project on that basis, which says it all.

[pongo]

I think we could all do with people looking at the strengths and the weaknesses of our businesses or the people we work for Stu.

 

At its best analytical consulting is effectively very closely connected to systems analysis. In that respect it can be both genuinely analytical and also almost measurably methodological.

 

Analysis is ultimately about determining the rules of a business - finding out what it actually does and how those rules can be measured.

 

I think many people in business would often be challenged to write down what their businesses actually do and express that in terms of business rules. As opposed to what the people in the business may think that it does. Working out what a business really does and describing that methodologically is not (what Chinahand would call) woo. It can be a very important exercise.

 

And the flip side of even the analytical approach can be the John Harvey Jones man-of-the-people TV style approach. Where he just basically comes straight in and more or less divines immediately where the hole in a business is or is about to be.

[- Paul -]

From the Gruniard

http://www.guardian.co.uk/uk/2010/aug/20/health-trusts-private-consultants

Health trusts spend £300m on private consultants

 

NHS figures show 'wasteful' consultancy bill could pay for cancer treatments and fund 10,000 nurses

 

What's the figures for here as a whole?

Didn't someone put them up somewhere?

[P.K.]

I have had experience of good ones (rarely) and bad ones (commonly.) Our "never again shit-list" had some major players on it - thankfully mostly now defunct.

 

It used to be that consultants were taken on because the board simply didn't trust their own employees to do a "proper" job. Plus if you're paying a mighty wedge to some "consultancy" operation then clearly they just MUST know what they're on about - otherwise how could they charge so much money??? What happened was that the "consultants" would do a snow job to justify what the board wanted to do anyway carefully avoiding any skeletons various executives had left in their cupboards and at the same time lining up their next contract. Simple as. So a great big lump of obvious generalities would be presented and everyone would be happy - for now. Because the "consultant" knew they wouldn't know their arse from their elbow so any old guff would do - or they wouldn't have hired the consultant in the first place!

 

That's mostly changed due to various methodologies meaning that you don't get qualified until you bank the savings. This means independent consultants are a dying breed and not before time, imho.

 

Signed - an "LSS Consultant".

[bigduke6]

Consultants - as the saying goes "they take your watch off you to tell you the time"

My dealings with them are they are simply blood sucking parasites!