It was open season (again) on management consultants this weekend after it was revealed that the NHS spent £313 million on them last year. The Independent’s Johann Hari climbed aboard the bandwaggon with this amusing polemic which seems to have been based on a few conversations he had with some disgruntled former management consultants. Or, perhaps more accurately, former management consultants who have decided to make a second career out of slagging off management consultants.
One such is David Craig, who explained to Johann how, after a degree in romantic poetry, he was hired by a prestigious management consultancy, given a few weeks training and then charged out at £7000 a week to major companies. He describes how junior consultants were given a formulaic toolkit which, with a bit of tweaking, they then applied to every client organisation. The consultants would gather some information, feed it into their models then produce a report and a set of recommendations which they had pretty much thought up before they arrived on the scene.
This training, take a pre-determined formula and apply it to every situation you come across, clearly worked for David Craig because he has used the same approach in his new career as a writer. The book Johann Hari referred to as a ‘brave memoir’ is Rip-Off! The Scandalous Inside Story of the Management Consulting Money Machine written in 2005. This was followed in 2006 by Plundering the Public Sector: How New Labour are letting consultants run off with £70 billion of our money. In 2008 came Squandered: How Gordon Brown is wasting over one trillion pounds of our money. Then in 2009 Fleeced!: How we’ve been betrayed by the politicians, bureaucrats and bankers – and how much they’ve cost us. (Notice that the bankers have been added to the list of baddies; gotta keep up with the zeitgeist y’know!) Finally, earlier this year, there was The Great European Rip-off: How the Corrupt, Wasteful EU is Taking Control of Our Lives. You’ve probably got the picture by now.
Johann Hari must really hate management consultants because, not only does he extensively quote David Craig, a prominent supporter of the Taxpayers’ Alliance, he also relies on a rant by Rod Liddle to back up some of his claims. Hari has said before that he is willing, quite literally, to get into bed with right-wingers if it furthers his aims. Perhaps that was the approach he took to this piece. He might be a leftie but if it helps his argument, quoting right-wing populists is just fine.
Management consultants are an easy target. As with bankers, bureaucrats, politicians, red-tape, civil servants, council workers and the EU, a generalised swipe at consultants, long on polemic and short on data, is guaranteed to get nods of agreement and a string of supportive echos in your comments thread.
Of course there is sharp practice in management consultancy just as there is in many other professions. However, management consultancy differs from most other professional services in one crucial way. Large organisations are forced, either by law, regulation, strong convention or external pressure, to employ certain types of professional advisor. It is almost impossible for all but the smallest companies to avoid using lawyers, auditors, investment bankers, accountants or health & safety advisors. But, with a few exceptions like the teams put into failing NHS trusts, no organisation is forced to use management consultants; it is entirely a matter of choice.
So why, after so many books and articles have been written purporting to lift the lid on the great management consultancy swindle, is the consultancy market so buoyant? It’s five years since David Craig wrote his book but few people seem to have listened to him. Since 2005, apart from a slight dip during the recession, consultancy revenues have continued to grow. Given that no-one is forced to use consultants, why should this be?
Perhaps the people who run organisations are dupes who are easily conned by smooth-talkers from the consultancies. Or maybe they are all rubbish at their jobs and hire consultants to cover up for them – and miraculously no-one has found them out yet. Or perhaps it is even more sinister – like a global conspiracy of management consultants who run an unseen protection racket, forcing companies to hand over millions of pounds each year. One day, someone might even discover some evidence of this and blow the whole scam apart. I can see it now – “The Protocols of the Learned Elders of Embankment Place.” A bestseller in the making.
Of course, there could be another reason why management consultants continue to exist and to prosper. It is just possible that some of them might actually help their clients and then get asked back to do more.
There is no compulsion on companies to use management consultants. If they really were as bad as Johann Hari, David Craig and others make out they would have ceased to exist years ago. Managers use consultancies for a variety of reasons, some rational, others not so rational, but they all do so from choice. If the consultants stop delivering people will stop using them but that clearly hasn’t happened yet.
Update: A number of people have waded into this debate, bringing their own experience of the consultancy game. Have a look at these posts by Kevin Ball, James Kwak (Hat Tip to Mumon for that one) and Jenny Sutton.