In Pursuit of Profit
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Are consultants simply someone who “borrows your watch to tell you the time?”
“Veteran journalist Duff McDonald makes a point in his book “The Firm” that McKinsey might be the single greatest legitimizer of mass layoffs in history —although that would be pretty much impossible to measure. Companies do need to lay off workers in tough times, that’s a simple fact. But the whole idea of corporate powerhouses laying off thousands of people during good times simply to juice profits—and, naturally, executive compensation—is something that McKinsey has definitely had a hand in as well. ...That sounds like a vote for evil, to me.”
Source – Time.com
The article on Time.com by Gary Belsky goes on to ask whether McKinsey is a force for good or evil.
With suspicions, rumors, and articles about failures over the years which have McKinsey & Co. within arm’s reach, has it tainted the reputation of other consultancy firms and professional consultants? McKinsey & Co. maintains its reputation on the list of top consulting firms for 2017 on Forbes.
Overshadowing potential risks consultants may bring is relentless change. By hiring a consultant, clients are hoping to have access to deeper levels of expertise to deal with the impending changes than would be financially feasible for them to retain in-house on a long-term basis.
A recent press release and special report - “The US Consulting Market in 2017” by Source Global Research highlighted how the need for expertise is apparent as the consulting market grows.
CONSULTING FIRMS ACQUISITIONS
Technology and market changes are not the only trending topics. The Source Global Research report, “M&A: Is it Adding Value?” was released on September 5, 2016, and based on a survey of almost 3,000 senior users and buyers of consulting services. It found that while clients understand why consulting firms buy other firms – they lose expertise – either because good people leave the acquired firm, there are fewer specialist firms to choose from, or the acquiring firm is a generalist, into which niche skills are absorbed.
This transformation via mergers and acquisitions can create new villains, heroes or apathy as the consultants must redefine their role and follow new leadership.
WHO IS A CONSULTANT?
The first consulting firm founded by Arthur D. Little, a professor at MIT, who named the company after himself. Initially, Arthur D. Little specialized in science, engineering, and invention. Frederick Taylor took his emerging theory of Scientific Management and became a management consultant, performing time and motion studies to improve manufacturing processes. Did Mr. Little and Mr. Taylor see the potential of a multi-billion-dollar consulting industry?
The oversimplified dictionary definition: "an expert in a particular field who works as an advisor either to a company or another individual" says that anyone can become a consultant. There is no single qualification to be a consultant other than those laid down in relation to medical, psychological and engineering personnel who have attained a degree in it and professional licenses.
With such an ambiguous standard, it is more difficult to evaluate and ‘score’ the best/worst or good/evil character of a consultant. Referrals or word-of-mouth continues to be valuable, each with a testimonial or story about their experience.
A consultant typically will have influence over an individual, group, or organization, but will not have direct authority to implement changes.
There are professionals who are not consultants but do provide advice:
Standards – Code of Ethics
Fortunately, there are accredited associations bound by a Code of Ethics which require members to provide practical advice that works. Such associations include:
International Council of Management Consulting Institutes (ICMCI) has about 50 member institutes around the world. This organization offers a variety of membership options based on experience, education, and phase of business or career.
Chartered Institute of Management Consultants (CIMC) is a not-for-profit professional body chartered federally under Letters Patent granted by the Government of Canada and registered under the laws of Delaware, USA.
International Federation of Consulting Engineers (FIDIC) Founded in 1913, FIDIC is charged with promoting and implementing the consulting engineering industry’s strategic goals on behalf of its Member Associations. Today, FIDIC membership covers 97 countries of the world.
Management Consulting Institute (MCI) MCI was founded in 2011, and board members include Directors and Partners from the top Management Consulting Firms such as Accenture, Arthur D. Little, Bain & Co, KPMG, McKinsey, and academics.
Association of Accredited Small Business Consultants® (AASBC) is an association focusing on training and certification of small business and SME consultants to develop proficiency in the specialized area of small business and SME consulting.
Institute of Certified Business Consultants® (ICBC) is a professional organization for business professionals with a global presence and a strong focus on professional values and high ethical standards, plus the opportunity for study and career advancement in the field of business consulting.
WHY YOU MIGHT HIRE A CONSULTANT
Robots, artificial intelligence and dramatic changes in regulations are not the only reasons for hiring consultants. Steve Jobs, the former CEO of Apple, once explained: “We don’t hire consultants. The only consultants I’ve ever hired…is one firm to analyze Gateway’s retail strategy so I would not make some of the same mistakes they made [when launching Apple’s retail stores]. But we never hire consultants, per se. We just want to make great products.”
--- Which is a contradiction because, for the right reason, they did hire a consultant.
Reasons for a company to hire a consultant:
Without an understanding of why to hire a consultant, failures are likely.
Hindsight has 20/20 vision, it is simple to look back and know ‘mistakes’ were made. There are no “do-overs’ where companies can redeem the millions of dollars invested or return to grace with buyers when a brand is tainted. Many are eager to tell their story about the worst consultant in the media. Here are a few examples of why hiring a consultant can fail:
Some leapt into working as a consultant, others were pushed and no doubt a few defaulted to becoming a consultant due to a lack of prospects. Whether they are in this challenging profession by choice or by circumstance, they make an impact more than they may realize.
Measuring character is probably the most difficult aspect and truly separates them as ‘villain’ or ‘hero'. Membership in the associations previously mentioned may not be a perfect reference but certainly shows a more serious commitment than those hanging a shingle and handing out business cards.
Stephen M.R. Covey wrote, "Trust is equal parts character and competence." Consultants will deliver less than optimal results if they lack one or both of those parts.