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October 209


Matthew Stewart explains how he went from a D.Phil at Oxford on “Nietzsche and German idealism”, to sitting with depleted savings at a Pub and deciding almost flippantly to apply to a consulting firm. This firm seemed undeterred by his lack of knowledge and experience, but apparently hired him because of his ability to reply to the question, “How many pubs are there in Britain?” Apparently, his ability to hold forth on something he had little real information regarding, confidently and compellingly, was the Mother Lode being sought by his future consulting masters.

Stewart then regales us with consultant horror stories, of gorged expense accounts, horrifically extravagant meals, escalating engagements that deliver little value, stock analytic charts and graphs that reliably spit out predictable results with which to “shock and awe” gullible corporate rubes (for example, the 20/80 split which seems like the cosmological constant, to be literally embedded in any statistical analysis of the world, evidence of the “critical few” in any review of the relative importance of various factors), advising people confidently based on scant business knowledge, and being seen as an “expert” on the future of their companies by those who invariably know far more about their businesses than the consultant.

Is this caricature or an incisive expose?

Well I went from writing a thesis at Oxford University on “Moral Responsibility and Kant’s Noumenal Self” (what is it about German philosophers and consultants?) and helping to run the Crisis Counseling Center there (Nightline), to Stanford Law School, to then working with some of the pioneers of Neuro-Linguistic Programming (NLP), to working alongside consultants in the field of Business Process Re-engineering (radical process redesign in short) who needed help grappling with the re-engineering of attitudes (they found to their chagrin, that drawing a new process by itself didn’t transform behavior!).

Being originally Pakistani, I went to Pakistan with my American wife as my father wasn’t well. We stayed for some time and began to work on human issues (team, talent, developing leaders) in leading companies like Motorola, American Express, HSBC, Reckitt and Coleman (as it was then) and more. I learned not so much about the content of their businesses, but enablers and barriers to these companies being able to implement strategies and succeeding. I learned this from the most credible source of all – the people “at the coal face” I was engaging. Far from bloated expense accounts, at that point of my expertise, and in that market, if I got $1,000 a day, I was lucky.

But learn I did, and we built a regional training company that then evolved into a consulting business: Sri Lanka, Dubai, Singapore. A client introduced us to a British change management firm that was supporting Reckitt’s globally. This client felt that if our people expertise were married to the process savvy of this British firm, we’d have a powerful combination. They were right. We are partners today. Our business is now established in the UK and Europe, and has finally wound its way back to the US. Today our focus remains resolutely on the link between business results and human performance.

Relative to that dynamic, we certainly know a lot more than most of our clients. And that’s the specific expertise they hire us for, and continue to do so, despite spending cuts in the worst recessionary downturn in a generation. It’s harder to argue that this type of need is “discretionary”. In a downturn, we need the engagement and focus of our people more than ever.

So, leaving our own odyssey aside (as one can always argue from an exception), is Mr. Stewart right in the barbs he slings at the consulting profession as it is currently practiced?

Relative to consultants adopting what he calls “the holy mien of a priestly caste”, he lists things like cuff links (have we now slumped to such a level of sartorial blandness, that cuff links are evidence of manipulative rites, dazzling the allegedly uninitiated with their glitter and gloss?), first class travel, over-priced meals etc.

One first wonders: are we speaking of bankers or consultants?

Leaving cuff links aside as a rhetorically amusing irrelevance, most consultants fly business class (only those in guru altitudes fly first class — and usually for one-off engagements for the multitudes, not for ongoing consulting) or economy class for shorter regional travel, stay in business hotels booked for them by clients, and have HR department hacks doing line item reviews of mini-bar purchases. This is quite a world away from feasts of Krug and Beluga implied by Mr. Stewart.

In fact, to avoid recriminatory exchanges over a glass of wine too many, we at Sensei (and so we advise other service firms we have consulted for) often simply agree an expenses budget with the client. Thus, if we desire a less sterile hotel option than the neighborhood Sheraton, then that’s our own business. And where we dine is no longer a bone of contention. There is a fair, established per diem, usually in line with what companies afford to their own executives.

If a client indulges the frothing excess implied by Mr. Stewart, I think that company isn’t long for the world. None of the global clients we’ve worked with, be they Unilever, Maersk, Raffles Hotels and Resorts, 3M or others, would countenance anything like this.

Other than painting consultants as crazed hedonists, the other key charges are lack of any real knowledge transfer or value-addition. But the same article indicates that in the United Kingdom, the annual spend on consulting is 9 billion pounds. And this isn’t an aberration, it’s a consistent trend. So how can accomplished leaders of blue chip PLC’s, be demented enough to consistently suffer, and pay lavishly for fops with vacuous power points offering only heady rhetoric and engaging bedside manner?

Actually, they don’t. The word “consulting” covers such a wide slew of activities that you could frankly make a case for just about anything. Doing so, you can find tales of egregious excess, of negative return-on-investment and the destructive impact of many consultants. But you could do the same re certain lawyers, accountants, IT experts, marketing and ad campaigns – virtually anything. In the words of the author, such analysis isn’t science, it’s a party trick.

The best of the larger consulting firms excel at analysis. If you have large reams of market, organizational, competitor, financial or other data, that needs to be collated, analyzed, distilled and communicated, consulting firms do this well. They can also offer considerable value relative to things like organizational design, introducing benchmarked processes and systems and things of this ilk.

The dirty little secret is that most large consulting firms are analysts. They often tout what they do as “change management”, but it is only after they’ve spent 80% of the time and budget on various forms of diagnosis, analysis, presentation to clients, and agreeing action plans, that they usually bolt on something to do with “implementation” or “human performance”, almost as an afterthought.

Not only is this usually an afterthought, it is feebly handled, usually after considerable organizational exhaustion at the fees, the time and the extensive nature of the undertaking. And what they offer is more of an audit of actions, rather than any engagement of teams or live coaching in the trenches. And most change efforts fail more at the cutting edge of implementation, rather than because cerebrally clients don’t quite understand what is to be done. If there is a charge to be leveled at many consultants, it is that they incorrectly apply the 80/20 cleaver in favor of analysis over supporting decisive action flowing from that analysis.

Mr. Stewart also alleges that consultants are often hired to provide a veneer of expertise, and to sanctify “opinion” (usually gleaned from people within the organization) or the “agenda” of senior leaders, trussed up as something allegedly objective. Dissonances are smoothed out, static dialed down, rough edges well hewn.

There are parasitical consultants who serve largely as mouthpieces, or a conduit through which conclusions like “work harder, shed one third of the work force” (something even more axiomatic than the 80/20 rule it seems by people trying to improve corporate value through organizational anorexia) can seem insightful and illuminating. But by that token, there are insurance companies dedicated to denying coverage, and lawyers who love to precipitate conflicts to run up billable hours, and newspapers that hock sensationalism to generate sales crowding out anything resembling real “news”, ad nauseum.

But there are real reasons that smart companies hire consultants, things that are worth paying for and which add real value. Here are a few in addition to data-gathering and analysis.

First, truly independent consultants may be among the few who can confront clients and let them know where in their business, the rot truly is. Where “The Emperor Has No Clothes” is something consultants should seek to discern and point out – being pertinent contrarians is something an independent resource can offer. Internal acolytes are likely to salute the “birthday suit” instead.

Helping skills, facilitation skills, are not automatic endowments. The ability to engage people, frame discussions, referee disputes and distil them to their essence, to evoke positive intent, to bridge from disparate positions, to highlight commitments and underline accountabilities, are often rare and needed skills relative to critical debates and discussions, at strategic and tactical junctures, between interfaces across regional or global networks, in the forming of teams and more.

We all tend to believe our blinkers – we think our “assumptions” are truth. Consultants precisely because they don’t know the conventional wisdom of your company or industry, are free to ask impertinent questions, to challenge assumptions, to ask repeatedly, “How do you really know that?” Is that worth 100,000 pounds you ask? It is, when you’ve spared yourself a 3 million pound global spend on a team-building program when the real cause it turns out of your 35% white collar turnover has to do with an absence of lateral or upward development opportunities and a disconnect between real results and recognition and reward, say. Similarly as a dramatic example of potential value, an on-the-ground expert in Afghanistan pointed out recently that the “insurgency” there is partially fueled not by ideology, but starving people being paid $8 a day for insurgency work to feed their families. Bombs may therefore not be a solution to the rampant 40% plus unemployment on the ground that renders people desperate and recruitable. If that insight actually landed and could be essentially validated, it would be worth its weight in gold. It is unlikely to come from the Middle East “experts” at the US State Department or the Foreign Office in the UK.

Another value is the owning of adaptive change. All change has a technical aspect – things we have to do — so in FMCG, creating consumer-relevant product mixes, creating the right advertising, getting it to market, getting distribution right, managing costs, etc. But if let’s say we find we are doing this ineffectively or that various pass-off chains aren’t working, then we have an adaptive issue (relative to how people act, interact, behave, respond and adapt). This element isn’t the purview of any function, who invariably are custodians of technical expertise. If help is needed to connect the dots, someone external who co-owns accountability for the adaptive element, which we know often is critical but can get lost in the press of the “urgent”, is often invaluable.

Consultants who work across companies, industries and geographies can provide very useful benchmarks, alternative paradigms, experiences of what has been found to work or not. Very rarely will anyone internally have such a landscape of comparative experience to be able to draw on. Some experiences aren’t transferable, and each organization has its own dynamics and challenges. But it can often be very helpful to have on tap a medley of other experiences to stimulate our own thinking.

Finally, where do senior leaders go to access a confidential sounding board? The best consultants truly do become trusted advisors. Senior leaders often can’t confess their doubts or uncertainties very readily. If they have no doubts and uncertainties relative to decisions that can influence hundreds of millions of pounds and thousands of lives, God help them. If they do have them, and share them with their Board, or peers, or direct reports, people might think they lack leadership mettle, or clarity, or drive. It could be an undermining act. So having a confidante, a professional peer, whose agenda is their own success (finally that is how a consultant should be assessed — supporting the legitimate success of their clients), someone with whom they can vent, try out ideas, brainstorm, get a sanity check, can often be hugely important.

Mr. Stewart in his quite entertaining piece offers the following extravagant truism: “…the problem of consulting is the problem of the ‘knowledge economy’ in a nutshell…when you stipulate management is the province of experts, you lose sight of the fact that organizing fruitful collaboration among human beings is principally a matter of building trust. And you forget the most elemental truth of political philosophy, that in any system that does not have the features of transparency and accountability, no one trusts anyone.”

I’m not sure how this is a problem for the knowledge economy, which argues that value will increasingly come from knowledge – including, of course, knowledge applied. This says nothing about “experts”. It applies to all of us and the growing knowledge component of value.

Fruitful collaboration is certainly about trust, but not just trust. A family may trust each other, but may not be particularly effective at executing a family reunion. Other skills are needed to drive and deliver results, albeit anchored in trust if the results are to be sustained. But this begs the question, how is this trust to be achieved?

Elemental it may be to political philosophy, but elementary and foundational to human interaction, is that trust is built through relationships. Companies aren’t social clubs. Relationships in turn are forged in the act of delivering things of value to the market in ways that increase the value of the company.

Building relationships under those pressures, where you also earn your livelihood, and have to look at your future career, is a different beast than building trust among members of a croquet club. Hence, while we can grant the fact that transparency and accountability are necessary conditions for effective human collaboration, they aren’t sufficient. When it comes to organizations, such transparency and accountability in turn has to be practiced and built in the crucible of real-time performance.

To my mind, helping to build effective, synergistic, trust and accountability-filled human relationships while delivering business results is the essence of what consulting at its best should be about – it is how human performance delivers strategic value.

This is not a “problem” though. Mr. Stewart to the contrary, it is arguably the solution.