A few years ago, when I told a friend that I was running training sessions for executives on how to use management consultants, he thought I was having him on. “You’re selling consultancy on how to use consultants?” he said, “Please tell me this is another of your wind-ups.”
When you put it like that it does sound a bit like an April Fool’s joke but managing consultants is a skill and it is one that is seriously lacking in some organisations. Today, the National Audit Office has published yet another report into the use of consultants in the public sector and concludes, as many others have done, that the public sector does not get value for money from its external advisers. But this report is different in that it concentrates on the customers as much as the suppliers. Rather than beating up the evil consultants for pillaging the public sector, the NAO concedes that some of this lack of value is the fault of the customers. The report concludes that civil servants are, on the whole, not very good at managing consultants:
Departments are not smart customers of consultants and interims. They need to be skilful, knowledgeable customers to get full value from their use of consultants and interims. This means having the capability to set clear and appropriate expectations of consultants, and systems in place to define and measure the value from engagements.
It’s refreshing to read this report as it highlights some of the problems I have been banging on about for years. Public sector organisations, especially central government bodies, are hopeless at defining what they want consultants to do. Good consultants try to help clients define their needs before they start a project but the civil service seems to be plagued by scope-creep. It is very easy, over time, for consultants to find themselves doing things that they were not called in to do. Even the most experienced consultants sometimes fail to spot scope creep until it is too late.
Two years ago, I wrote this:
Increasingly, though, the public sector is blurring the line between external support and hands-on implementation. Consultants, especially those at the more junior levels, often start off with a specific brief to work on a clear fixed-term project but, over time, end up acting in day-to-day line roles, carrying out tasks which would normally be done by civil servants. Friends of mine have spent months, and sometimes more than two years, working on government projects in which the scope changed and their roles gradually became indistinguishable from those of the civil servants with whom they shared an office. As one of them explained to me, “The department is using us as Higher Executive Officers.”
And bloody expensive Higher Executive Officers too!
This still goes on and, if anything, it is even worse for interim managers and contractors. It is significant that, as the NAO points out, central government organisations often have difficulty distinguishing between consultants, interims and contractors. The lines between the three often blur, as does the line between them and permanent staff.
Three years ago, I did some very crude maths and concluded that, despite all the scare stories, the public sector didn’t spend that much more on management consultants than the private sector. This varies, of course, with the economic cycles. Over the last six months, public sector consultancy spending fell while that of financial services firms increased. But, allowing for these fluctuations, public sector bodies are probably no more dependent on consultants and interims than many other large organisations. The government loses out not because it employes so many consultants but because, as the NAO says, it lacks the ability to get value from them.
Even though spending on consultants is falling, they will not disappear from public sector organisations altogether. As I have said before, experience of large-scale downsizing is rare in the public sector. Government departments, NHS trusts and local authorities will need some outside help if they are to manage the massive changes they are facing effectively. All the more reason, then, for public sector managers to get better at managing consultants.