The usefulness of consultancies: An old issue in need of new answers… and new questions

Do McKinsey and other consultants do anything useful?

This is the ostensibly provocative question posed by The Economist in a recent article. It (re)surfaces in the context of scandals in South Africa and France among others, and the polemical release of a book written by two journalists from the New York Times: When McKinsey Comes to Town constitutes a new cornerstone in the somewhat complicated relationship between the prestigious newspaper, which regularly delivers critical insights into the world’s best-known consulting firm, and McKinsey’s activities.

The question is provocative only in appearance. Business as usual, really: as The Economist rightly points out, media criticism is growing but the consulting sector is doing well. The “Big Three” or “MBB” (the three most prestigious consulting firms: McKinsey & Company, Boston Consulting Group and Bain & Company) has seen its turnover triple since 2010 to around 30 billion dollars, and employs 70,000 people.

To provide an answer, The Economist cites some of the traditional functions of consulting services such as increasing the credibility of a decision, obtaining solid analyses in an (apparent) scientific manner or providing access to specialist knowledge. Let us try to answer the initial question more exhaustively before explaining how we could rejuvenate it.

Managing businesses

On the one hand, consultants could be perceived as technical experts, focused on diagnosis and problem-solving, able to heal the organizations in which they intervene (functionalist approach). But where does the value of this intervention come from?

Edgar Schein posed this structuring question in 1978: is the consultant a content expert, or a facilitator who masters a better problem-solving process? In other words, do consultants tell clients what to do or facilitate a better process for them to discover solutions? The study he conducted led to different models:

• In the expert model of consultation, the client buys the help of an external content expert, in the form of specific information or expertise, or in case the client experiences certain symptoms revealing organizational ailments without knowing what is wrong or how to fix them. The responsibility for the diagnosis then lies with the consultant, as does the remedy.
• In the process consultation model, the consultant has skills to help the client discover his own solution or to involve the client in the diagnosis of the problem and the generation of solutions. The focus is no longer on the content of the problem but rather on the process, i.e. the form in which problems are solved.

Managing impressions

On the other hand, consultants are sometimes portrayed as charlatans and management consulting as a largely symbolic activity (critical approach). The criticisms are numerous: they would be zealous and unethical rationalizers; neo-imperialist ideologues; a waste of resources to legitimize existing ideas and plans without substance or innovation; or competent promoters of new management fads. A fundamental criticism, especially after the Enron scandal, is also the lack of accountability or responsibility in the consulting field. In a famous book entitled Managing Consultants: Consultancy As the Management of Impressions, Timothy Clark focuses on understanding the client-consultant relationship through the art of impression management. Far from being anecdotal, he argues that it is central to the success of consulting.

More recent works have tried to go beyond this dichotomy between functionalist and critical visions, depicting, for example, actors dominated by their own domination or emphasizing a more complex reality and highlighting that the haunting question of the value of the consultant is always delicate and always questioned.

Shifting questions

The question asked by The Economist on the role of the consultant is a classic one with multiple answers. The recent media coverage is therefore an opportunity to point out some directions to approach this old problem in a new light (at least in the media). Here are some examples:

1. Is there a consulting world beyond McKinsey? Stop focusing only on the big guys – the consulting industry is characterized by a myriad of players, some of whom are trying to change the old recipes. What connection can be made between the MBBs, the makers and breakers of managerial fads, and a small consulting firm that is starting its business? This is particularly interesting because consulting start-ups (with a turnover of less than 10 million euros) constitute the majority of actors in this atomized sector. A small number of firms, like McKinsey and the Big Four (EY, PwC, Deloitte and KPMG, the four largest financial audit and consulting firms in the world), already receive a lot of attention from academics and the media. Yet, among consulting firms, some claim to promote a different agenda from what they consider to be the dominant norms of the industry. Small consulting firms try to propose alternative visions of the consulting business, taking on political and societal issues.
2. Wither the client in consulting? Stop infantilizing the client or on the contrary making him a dictator. As already shown a long time ago by Edgar Schein or Timothy Clark, consulting makes sense only if the consultant involves himself jointly with the customer to determine what is the problem, why it is a problem, why it is a problem now, and what could be done to solve it. The consultant and the customer are inextricably linked in the foundation of consulting. While the functions may be both similar and distinct from each other, what brings them together is always this consultant-client relationship. We recently reminded it in the impact paper we wrote as part of ESCP Business School’s “Geopolitics and Global Business Impact” series.
3. What about the client-consultant relationship in light of new ecological and social issues? Linking utility issues to the major economic and social transformations that concern both consulting firms and their clients is necessary. Even among the big guys, the desire for change can be sincere as well as sensible (this also implies distinguishing the real from the ‘washing’). The customer – as well as his new ecological and societal issues – must be the starting and ending point of consulting. Let’s give them a voice in the debate and connect the discussion to the new challenges ahead.

“Consultants have much to offer, but also still to prove,” writes the Economist. We would add: clients may have a lot to take but more importantly, a lot to teach us.

This post gives the views of its author, not the position of ESCP Business School.