Expert or Charlatan?: The Rise and Rise of Management Consulting

The Rise and Rise of Management Consulting

,

• Publisher: KW Publishers
• Year: 2014
• Print ISBN: 9789383649068
• eBook ISBN: 9789385714511
• Edition: 1

The management consulting industry is a leading component of the world's knowledge economy permeating every segment of industry, commerce and government service. A multi-billion dollar phenomenon, it has yielded its own body of knowledge and set of practices. Exponents do make a lot of money for the consulting businesses they serve. What is not always understood, or transparent, is the value clients receive. This book seeks to make good that deficiency in our perception of the profession. Learning on his deep and wide-ranging experience, Dr John Louth seeks to lift the lid on the management consulting profession in a critically reflective and accessible manner. With vignettes and examples drawn from his own experience and practice, he dissects the rational explanations usually provided by practitioners. He calls for restraint and self-awareness from both client and consultant, and advocates the reform of a profession that seems increasingly powerful and unregulated. Dr Louth explores the management consulting profession on its own terrain, through its own language and discourses. He disentangles the management consultant's notions of "strategy," "risk management," "change" and "project management" so that these become meaningful to the layperson. Given the complexity that dominates the global geopolitical system and international economy, he asks how management consulting diagnoses can be effective in an uncertain and highly contingent world. With a foreword by Professor Rebecca Boden of the University of Roehampton Business School in London, this book is an accessible and scholarly monograph that is essential reading for those seeking to understand management consultancy and its role in the modern world.

SECTION TWO

---

3.	My Role as “An Expert”

---

All Is Not as It Seems

As we have seen from the preceding section, there are (at the very least) two interesting phenomena occurring in relation to management consultancy and the interdependent global economic and geopolitical systems. First, we have dominating features of immense global complexity, uncertainty and even disorder. Second, we have an international management consulting market that is thriving on the promotion of diagnostic certainty despite this complicated modern state. This is fascinating, and whilst on first sight many people might consider that these two conditions are mutually exclusive, in my view management consultancy makes a virtue of this tension. For example, my own consulting career was undertaken contextually to offer management coherence in response to complexity, so that my promotion of the managerially certain and obvious was viewed as a way of taming and controlling the wild and uncertain. This took the form of me being sold-out to clients as an “expert” in transformation and change management, risk and opportunity management, programme management and recovery and corporate strategy, to name but a few activities I undertook. The following chapters address each of these four areas in some detail using an appropriate example or multiple examples from my professional life; but before this I wish to dwell on this concept of expertise as it goes right to the heart of the management consulting idea and business value proposition.

The Expert and Management Consultancy

Each consultancy organisation sells their staff to their clients as subject-matter experts. It could hardly be otherwise, as I have never heard, as yet, of an organisation buying the time of a consultant on the basis that he or she had merely a rough idea of what they were doing and were partially qualified. So, at the very heart of the consulting concept is the transfer of expertise from the consultant to the client via the selling of the expert’s time. From what I have seen to date, there are indeed a number of very well qualified and experienced consultants who excel at making the sale and perhaps even supervise the consulting engagement. I would even concede that such individuals are excellent at managing the relationship with their client through a mixture of charm, personality, past credibility and the strength of the consulting brand they represent. But much of the actual work within the engagement—the diagnosis and analysis to use Rasiel’s terms, the development of options to generate the client’s required outcomes, and even the making of recommendations—is left to more junior staff.

For example, during my time in the Middle East, working in partnership with one of the largest global consulting brands, the managing partner from this business directed the relationship with the client but left all of the detailed work to a junior analyst. It was clear that this analyst was a good and conscientious young professional, but he had neither the past customer experiences nor the skills to develop an emerging solution to meet the demands of a nervous client. Consequently we ended up with a stew of past financial models and organisational analyses cut and pasted from previous engagements, being hastily put together at the last minute by the team and applied to the current client’s circumstances. This was shamelessly offered by the consulting partner under the badges of “learning from experience” and “best practice” which, at the very least, seems disingenuous.

That the advisory business in question could get away with this has something to do with the notion and place of “expertise” in the mindset of the client and the brand strength of the consulting practice. But, in truth, the expertise demonstrated was a trite and shallow expertise associated with relationship management, strong presentation skills and the ability to manage client meetings rather than subject-matter excellence.

Interestingly, each of us involved with that engagement was highly credentialised by our qualifications. I am an accountant and hold a number of different degrees and professional qualifications. We had lawyers and bankers with appropriate certificates also involved and this mix of professional credibility and hard-won qualifications offered much comfort to the client, even as the consulting partner briefed from rehashed presentations, drawing findings and conclusions from insights gleaned from previous engagements. The qualifications of the consulting team added to the allure of expertise but were not actually relevant to the core consulting practice of client management, as revealed through that engagement. What is truly fascinating, though, is that the client was thrilled having so many “experts” presenting to him, glorifying in the qualifications held, so was more than happy to pay for services received. The tale of yet another successful consulting engagement could, of course, be used by consultants to sell yet more services to this client and others whereby the roll-out of yet more expertise continues as almost an organic consequence of what has travelled before. After all, only a fool would argue with a record of expertise and success and no client or potential client wishes to be seen as a fool.

Making the Sale

The core skills of the seasoned and senior management consultant are business development and sales. All but the most junior consultants in practice have sales targets and a sure route to a reprimand or dismissal is failure to meet annual sales targets. Invariably this means that for a number of consultants securing the deal is the focus of their efforts rather than the detail of the client’s perceived problem of their own skills and competencies in delivering an enduring solution. Unlike banking or financial services, misselling, as yet, is an alien concept to the management consulting profession. I believe that this will become a major industry theme during the next few years, especially as management consultancies grow into the service spaces traditionally provided by governments. Should this prediction prove correct, the governance of the consultancy profession, at national and international levels, will become a major societal issue. I return to this theme in latter chapters.

I make the case for the sales function being remarkably important to the consulting profession. This has been my experience in the market place both as practitioner and analyst. Yet many consultants will state forcefully and with passion that the firm they work for does not engage in sales.¹ Somehow, they might assert, selling their services seems to be below the dignity of a profession that has its roots in accountancy and engineering professional services. But, it seems clear that securing a client pitch and making a sale is the lifeblood of the consulting firm. Partners and directors have their remuneration packages developed to reflect the amount of business that they can bring to a practice. How can we reconcile this apparent difference in emphasis when it comes to the subject of selling?

It seems to me that the more prosperous and enduring consulting firms do not “cold call” potential client as some besuited double glazing salesman of myth might, but rather they market brilliantly so that the same potential client automatically calls in the consultancy when a business problem is identified or the necessity for change perceived. As part of this marketing effort, consulting companies might generate a continual pipeline of papers, articles, speeches and even books so that the consultant’s individual expertise within a particular domain or business area is constantly stated, reinforced and validated by the effort itself. Firms like McKinsey and PA Consulting, for example, may produce their own quarterly journals for the use of existing, and as yet unidentified, clients and the wider business community. Such a consulting company will engage proactively with journalists, analysts in think tanks, legislators, their specialist advisers and so on, so that senior consultants become imbued with the pixie-dust of expertise and credibility. This methodology is a form of advanced “selling for professionals”—a form of sales through reputational positioning, business development, networking and branding that is as subtle and effective as it is omnipotent. A client’s confirmation of an order is the inevitable, perhaps even unstoppable, consequence of these endeavours, signposting, in a way, the triumph of the sales process over other practices at the heart of the management consulting proposition. Its power over the industry should not be underestimated.

With this in mind, I now turn my gaze onto a number of consulting activities which seem to dominate the market in the twenty-first century. The practice of change management seems the appropriate place to begin.

Notes

1.A number of private interviews and conversations between 2011 and 1013 contributed to this analysis.

4.	Transformation and Change Management

---

All Change

Management consultancy in almost every way is fundamentally about change. This might be structural, organisational, cognitive, emotional, technological or even physical. If it can be conceptualised and articulated, then the client’s problem or inherent nervousness can be turned into a change programme by the skilled consultant. As a consequence, words such as “change” and “transformation” are at the very centre of the lexicon of consultancy. It could hardly be otherwise.

Change, however, is a double-edged management and social scientific phenomenon. It can help align an organisation to its strategy though, quite often, only in a limited sense, or it can unleash a wave of unrest, dissatisfaction and ill-considered impacts across an environment. Such a perfect storm, on occasions, can generate a tempest from which the business entity in question cannot be recovered. The point about change management as a discipline is that managerial outcomes are seldom certain and consequences can extend beyond those intended. As we discussed in earlier chapters, the world is a complicated, non-linear place beyond the rules of causation.

For much of my professional life I have been involved in designing change engagements and, on one occasion, with the development of a business consultancy’s entire change management practice. Despite this, I still struggle to properly identify the objectives, practices or effects of change management as a discipline and how, when combined, these factors can yield the business benefits so often claimed.

One consultancy that I worked for was considering developing an overt change management methodology and toolset to enable the company to compete for, and win, high-value change management engagements. This was perceived to be a lucrative and sensible strategic choice for the company to make. In fact, more properly, if the company was not successful in acquiring a part of the booming change management market, senior consultants like me and my fellows would have failed to develop the business to its full potential. The task of aligning the business’s competencies to its ambition to be a player in the transformation advisory business was given to me.

The Change Management Proposition

My first objective was to identify just what we meant by “change management” or “transformation.” This was a relatively straightforward task. A quick reading of the business press and one or two management books quickly told me that, within business schools, change management as a concept is usually accessed and understood through three distinct areas of explanation and definition:

• The task of managing organisational and team change;
• An area of professional practice;
• An emerging intellectual body of knowledge.

The first and perhaps most obvious definition is that the term refers to the task of managing a specific, identified change. The obvious, however, is not necessarily unambiguous, as the management of change in this context has at least two meanings. The first is the introduction of changes to an organisation in a planned, managed and systematised manner within the control of an organisation. The second is the ad hoc response to changes generated from within the operating environment over which the organisation has little or no control. In part, driven by this tension, researchers, typically distinguish between a reactive change management response and an anticipative, planned initiative. The distinction is said to be important if the correct strategy is to be crafted by an organisation seeking to change.

In contrast, the area of professional practice associated with transformation and change management stretches from multinational partnerships operating at a global level through to niche, sole traders. Some claim to manage the consequences of inevitable changes, others to make desirable changes to operating procedures and bottom-line results. However, it is the claimed expertise in the task of managing the process of change that is the unique proposition in change management as a professional practice across consultancy. Understanding the process is the key to fully grasping the practice.

Third, there are the models, methods and techniques through which practitioners engage the marketplace that occupies the body of knowledge associated with change management. These, in turn, have been supplemented by, and interchanged with, the models and methods to be found in the business schools and other areas of academia, especially within the West. The content or subject matter is drawn from psychology, business administration, economics, industrial engineering, systems engineering and the study of human and organisational behaviour. Within a globalised environment, these component bodies of knowledge are linked and integrated by a set of concepts and principles that comprise a general systems theory of change.

When I was initially charged with developing a management consulting proposal for the development of a change management practice, I was not clear at all whether this area of practice should be seen as an integrated and mature profession, a discipline, an art or a technology. For the purposes of my organisation it was sufficient to point out that there was a large, cohesive but eclectic body of knowledge underpinning the practice of change management that many practitioners would find common ground with, even if their application of the principles would demonstrate a high degree of variance masquerading as client choice within the market.

The Change Management Body of Knowledge

It was clear to me, though, that this self-styled body of knowledge of change management was homed in the universities’ business schools and that this pedagogy gave it a legitimacy and acceptability within society. Consequently this knowledge could be sifted, coded and “commodified,” allowing the consultants to make money from change management. And, of course...

Table of contents

• Cover
• Title
• Copyright
• Contents
• Foreword
• Introduction: The Prince and the Admiral—How Did I Get Here?
• Section One
• Section Two
• Section Three
• Section Four
• Further Reading