Consultants Inc: Buyers Beware
Written in a racy journalistic style, full of quotations and digressions of brilliant associative connections, the book is an absorbing read, giving insights into the philosophies and growth strategies of today's biggest and most expensive class of consultants.
In the classical structure of business consulting, a management team looks at the observable facts, arrives at a set of shared assumptions about the future and designs a strategy to achieve a goal. Each consulting organisation has its unique way of handling it and thrives on its brand equity assiduously built up and carefully cultivated. McKinsey aims to get the strategy right and expects that technology-led implementation be carried out at the bottom. Boston Consulting Group shares the same philosophy, while Anderson stri-kes a different path: it believes that the roles of strategy, people, technology and process form a seamless web and technology-blind strategies cannot therefore work.
Gemini talks metaphorically of transforming the organisation through a process akin to genetic engineering, grafting and revitalising 12 corporate chromosomes (as against 23 such in human gnomes). We come to a different kind of philosophy with Bain, a secretive firm which makes the consultant don the mantle of a substitute manager: become an insider, behave like a "Trojan horse" to get into the company, open its doors and spread yourselves all over the place. You will get such nuggets strewn all over as you journey through the book.
Philosophies do not win contracts. The marketing techniques of these consulting firms are subtle. They know when and how to whisper into the proper ear; the old boy network always works. With their sophisticated public relations topped up with academic veneer, they have all the tricks of the trade to mesmerise the nuts-and-bolts management executives. McKinsey, for example, can almost at will rope in a healthy collection Nobel laureates; it "always seems to arrive with the equivalent of a new Mercedes-Benz. More important, it knows exactly where to park it." The client-base of these firms is of breathtaking diversity. They keep on adding to the list, collecting the absorbing experiences and strengthening their knowledge capital. Today, riding on the wave of globalisation, they are poised to conquer the world. It is estimated that from half to three-quarters of their revenue comes from countries other than the US.
Several consulting disasters and legal battles notwithstanding, the firms manage to keep their reputation intact. Their dazzling pedigree insulates them from the fallout of any consulting disaster; they can do no wrong, they always succeed, thanks to their persuasive skills, in turning the marketing philosophy upside down, the accountability of failure always lies with the client.
Why do the consultants have the upper hand? The reader is left with the uncomfortable uneasiness that the business of consulting thrives on the complacency of the incumbent management. They become too lazy to think through what ails their corporations. They pass on their caps far too readily to the consultants. Our own corporate world is littered with such examples. Many of our corporate chiefs enjoy basking in the reflected glory of the high-brow consultants.
The story of ` The Rise, Fall, and Rise Again of Sears', as the chapter is titled, is a classic case study of the consequences of abdication of management responsibilities by successive chief executives; this is a must-read for all corporate executives. The consultants were enjoying a free run of the organisation till at long last Sears woke up to the danger. The chief executive made up his mind and started calling the shots and it was then that the decline was arrested. Less was definitely more, so he believed, but, fortunately, for the consulting business, such chief executives are a rare breed.
Well, then, before you choose your consultant, ponder over and over again on the age-old advice of Machiavelli: "Here is an infallible rule: a prince who is not himself wise cannot be wisely advised. Good advice depends on the shrewdness of the prince who seeks it, and not the shrewdness of the prince on good advice."