Companies get wise to the failings of the classis consultancy model

A company has a problem. Pick one at random: efficiency, human resources,
supply chain, pricing, growth strategy (the list goes on and on). Like an
egocentric teenager, the organisation thinks it’s the only one with problems in
the world and is determined to take the seemingly quickest route to find a
solution. Somebody call a consultant.

With accountants now firmly back at the business advisory table following the
hiatus after Enron, they should be conscious that we live in a new world, and
that companies are beginning to get wise to the failings of the classic
consultancy model.

Firstly, they often don’t leave any lasting wisdom with their clients, and
secondly, they are prone to avoid immediate practical advice.

An external eye on a business model is evidently no bad thing, but the
business consultant typically holds a company’s hand so tightly through
transformation processes, that they develop a total dependence. The people on
the inside are then unable to even apply the consultants’ wisdom on their own.

It’s not just clients that foster this dependency, consultancies are also
responsible. An innumerable amount of projects implemented by consultancies fail
because they are too long term in their goals. Before they have even drafted a
plan the problem has migrated and the business relies on the consultancy to
adapt an outdated plan. Businesses should remember that if a project won’t
deliver after six months, then it probably won’t deliver at all.

In the rare instances where a consultancy can deliver a large-scale programme
in one fell swoop, it doesn’t teach a client the skills necessary to managing
that project successfully in the future.

Another major problem is that businesses have long been using the adjective
‘strategic’ as a proxy for ‘loss making’, a malady that has been exacerbated by
the rise of expensive strategy consultants. All activity, and specifically
bringing in professional advisers, should be justified on the bottom line, with
clear reward demonstrable, not written off as a necessary expense. It seems
ironic that a cornerstone of the accountancy profession is to work out
cost-benefit, but in their capacity as business advisers, firms find this
activity extremely difficult.

While solving the initial problems for which they are hired, consultants
should be simultaneously educating, in order to truly demonstrate the worth of
their services. Businesses may get wise to their costly habit, and become more
committed to getting lasting value out of the consultant’s visit.

Eddie Obeng is a director of virtual business school

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