Consultancy confessions

I am grateful to two readers for providing material for this month’s musings and challenges. One agreed to stand in our fictional consultant Antonia’s shoes, and the other drew my attention to a number of recent Fortune magazine articles which are challenging, or should be challenging to all management consultants.

The first, authored anonymously, claims to be the “Confessions of an ex-consultant”, with 22 years of experience working for a major American consulting firm, serving scores of Fortune 500 companies. Now that he’s left the business, his advice to fellow managers when hiring a consultants is “buyer beware”. His theme is based on the belief that, while there are consultants who can do your company a lot of good, there are also many who don’t have your best interests at heart. His article wants to help the reader to separate one from the other, a distinction this column has promoted since its inception.

He identifies three kinds of consultants, “minders, finders and grinders”, and goes on to say that clients need to know the difference, because if they don’t, it can hurt their company. The “grinders” meet seasonal needs or satisfy a need for problem-specific input. For a particular problem which may occur over and over throughout the organisation having a grinder is valuable. They know one thing well, but can be out of their depth if asked to tackle anything outside that one thing. “Minders”, he claims, are the people with the real expertise. They’re the ones who deliver the economic value to the client. He suggests that these are the consultants who are under pressure to build a lot of hours into the assignment and put down roots in the client. It can be difficult for these consultants to “tell the truth”. Because by doing so they may reduce the opportunity to earn more.

The “finders” are the ones who probably have something interesting to say about the client. If they’re any good they’ll leave. And if not, they become a sub-set of the “finders” – it’s been so long since they did any real work, they can’t be sure whether the team they’re putting up is any good.

Where do you and your practice stand?

The second article is “Controlling your Consultants”. Subtitled “How to get the most out of your hired help – without getting ripped off”. This is aimed at helping clients to get the benefits of using consultants.

First, make sure your reason for inviting consultants in to assist is sound. Secondly, establish a concensus in your (the client) staff. Thirdly, ensure that the consultants deliver a custom-made solution. Fourthly, consider how the fees are calculated – on a time basis or on a contingency basis. Fifthly, nail down the scope of the contract; don’t allow drift.

Sixthly, the expert consultant probably pitched for three other jobs that week, and if they’re successful, you must ask yourself will you get a fair crack of the whip, among the competing claims for the consultant’s time? And there’s more of that in the same vein too – very helpful to clients.

In this country, dealing with a member of the IMC, or with a practice registered with IMC, spares clients the need to be so concerned, since the IMC Code requires these consultants and firms to observe its strictures.

The third Fortune article entitled “In Search of Suckers”, is an analysis of the how the advice business has been hi-jacked – quietly and without fanfare. New management “gurus”, “armed with nothing more than pens, podiums and a tremendous shamelessness have co-opted what used to be a nice wholesome calling, dishing out sound advice to business men and women”.

One estimate quoted suggests that there are over 31,000 gurus at work on a worldwide basis, earning as much as $10,000 per day and higher.

The writer questions how the US ever got through World War I, the Depression World War II and other major dislocations without the benefit of counsel from the gurus. Do you identify with the gurus?

Antonia, as readers of this column will know by now, is an extremely experienced (though fictional) management consultant. She has carried out engagements in almost every field of consultancy endeavour, and been faced with dilemma after dilemma. She wrote to me recently admitting that she had a copy of the Institute of Management Consultants’ Code of Conduct, but she’d never read it! Yes! Many of the consultancies she’d worked with told their clients (if asked) that they and their employees adhered to the IMC Code. It was only when, in an idle moment, she’d started to read the Code that she realised: “This code is good … I suppose I have read it but I’m not aware of having done so, nor indeed of knowing what’s in it in detail … I just know that it contains good principles and a lot of sound detail that I should have no difficulty in complying with … but that’s crazy, I’m supposed to hold up my adherence to its principles as one of the things that ought to mark me out from the unethical consultant in my clients’ eyes …” So Antonia’s most profound thought, after reading it, was concerned with what she did with the Code in her day-to-day business life. She began to think: “perhaps I should make an explicit statement in my CV, not merely saying that I’m a member of IMC, but that membership implies an undertaking that I will conduct my business according to the IMC’s Code, and include a copy of the Code with my proposals”. This led Antonia to think that perhaps the ability to cite the Code of Professional Conduct attracts sole practitioners and consultants from small practices to IMC membership, but what about large practices? When she worked in a large practice, she wasn’t aware that those practices brought forward their avowed compliance with the Code. She hadn’t looked at the Code when putting together proposals; nor during a project. She guesses therefore, that her colleagues in those large practices are in the same boat. But at least, she thought, IMC members in those large practices which are Registered Practices, know that the principals or directors sign an annual affirmation that they and their employees will be bound to observe the Code. The other employees (not members of IMC) may be in ignorance of this undertaking. Does your practice annually affirm adherence to the Code of Conduct of the IMC? I believe that Antonia may have raised some interesting questions. Do you use this well-constructed Code of Professional Conduct positively? If you do, will you share your practice with all of us? I should be pleased to hear from you. Contact me through the editor or via CompuServe 100445.434

Paul Lynch is a member of the IMC council.