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Clients are remarkably consistent about the kinds of changes they’d like to see take effect in the consulting industry.
Top of their agenda is information: ‘Consultants often look as though they’re only too keen to regurgitate the latest solution or package, without trying to take into account companies’ specific situations,’ complained a typical client. ‘This means there’s a lot in the way of impressive presentations, but there’s very little substance.’ ‘I want a better way to gain information about a consulting service without being bombarded by white papers and sales people calling me. I could spend all day doing this, but it would be nice to know what’s out there,’ said another.
It’s recognized that it’s not just the consulting firms who are at fault here: clients themselves have been insufficiently proactive in demanding better information. ‘Clients should push more aggressively for reference sites and case studies, and then contact them,’ argued one respondent. ‘Most do not follow up on the references provided, although this is crucial if they’re to be more informed and in control. I also think that consultants should be forced to be more honest about what they can’t do. Expectations need to be clear on all sides.’
For some clients, market forces could resolve this problem: ‘the market for consultants is competitive enough for no need for any form of regulation – it is, after all, a “reputation” business,’ said one. Technology, too, may have a role to play: ‘what we need is an accessible database of smaller / medium-sized consultancies which are better equipped to provide tailor-made solutions / advice,’ said another. Many clients said they would welcome more opportunities to compare their experiences of using consultants: ‘I’d really like to have the chance to see what other people have found,’ was a typical comment.
Of the majority of clients for whom better information was a priority, most believe that some form of external validation is also required. The message is the same in both the private and public sectors. ‘I’d like there to be some kind of third-party review of what consultants do, so that I can assess this without being hassled by sales people from the consulting firms themselves,’ said one company executive. ‘Being part of government means a document prepared for another entity can be shared with us without restriction,’ said a public sector client. ‘But most government entities do not have formalized performance reviews which makes in-depth comparison difficult.’ Other clients saw the solution slightly differently: ‘it would be immensely useful to have some sort of on-line marketplace for consultants, where we could identify the precise individuals we wanted to work with, rather than the firm.’ Most were simply interested in the outcome: ‘we need to be able to compare different consulting firms on a more reliable basis,’ is how one client summed it up.
As a corollary to this, many clients thought that consulting firms should be more open internally and between firms. ‘Our consultants are most often hired because of personal networks … A more open network would increase the number of consultants available to an organization. In order to achieve this, consultants need to think about their competitors as colleagues – something which represents a difficult transition.’
Item #2 on the clients’ agenda is a code of practice to correct the distortion many clients see in which consultancies, under pressure to maintain the growth rates of the previous decade, are tempted to sell clients work they do not need and cannot afford. ‘I’d like to see codes of practice,’ said a private sector client, ‘governed by a central but independent body and a method by which past experience and specific skills areas can be assessed and independently verified before a client commits to a particular consultancy.’ The picture is the same so far as the public sector is concerned. As one client commented, ‘we would hope that – within public contracting – there is some second party oversight built into each contract along with the professional licensing, and errors and omissions insurance which would either prevent or minimize that impact of any problems.’ For most clients, this issue is a matter of ethics, rather than a call for the professionalization of consulting in legal terms. ‘One of the lessons of Enron,’ said one client, ‘is that all consulting services need to be held to a consistent standard whether professional or not. The fact that an industry is professional or not is immaterial, faced with the potential for something like Enron happening again.’ This client spoke for many when he linked what he saw as the lowering of ethical standards to the long-term reliance on the same team of consultants. ‘There’s always pressure to do more with less, a temptation to trust the consultants I’m already working with to take on more and more work. Clients should spread work around and limit the terms of service for a particular firm. One of the fundamental issues of stewardship is how we keep the honest honest.’
Many clients believe the professionalism of the consulting industry has been damaged by the way in which many consulting firms have responded to the downturn in the market. ‘The consulting industry need an internal code along the lines of “do we still bring value to our client”, if it’s not to be seen to be preoccupied with its own survival,’ commented a client.
Item #3 is accountability: according to one executive, ‘consultants should have a similar level of professional liability as say lawyers, surveyors and accountants for their advice.’ ‘There has to be greater recognition by consultants that they have a responsibility for the ultimate outcome of their work; rather than just for advice which may lead to an outcome,’ said another. However, the underlying concern here is about clarity of ownership. As has already been noted, the vast majority of clients fully accept that there are consulting projects where the buck unequivocally stops with them. They also believe there are other projects where responsibility can reasonably and unambiguously be assigned to the consultants involved. Concern over accountability is therefore directed at those instances where accountability is unclear, where clients think consultants are ducking the issues – ‘consultants should take more responsibility,’ said one.
Lack of accountability rises in proportion to the number of variables in play. Ironically, when many people are looking at the very large IT projects and wondering whether these are capable of bringing down both client and consulting firm if they fail, these projects are unlikely to be the source of an Enron-style debacle – because accountability is clear-cut. They may result – indeed, they increasingly are resulting – in litigation where one party has not fulfilled its obligations. While they damage the reputation of the consulting firms involved, it’s improbable that such cases would raise any systemic issues across the consulting industry: they would be (and have been) treated as acts of individual negligence. A more plausible scenario is that a less well-defined consulting project, which is both shown to have contributed to a corporation’s demise and in which neither side has been clear about accountability, becomes the scapegoat and an illustration of an industry-wide failure.
However, most clients acknowledged the difficulty of realizing this. ‘Accountability is complicated by the wide range of consulting services and the fact that many involve leading-edge knowledge,’ admitted one executive. This makes it difficult to envisage codes of practice being applicable at anything other than the individual level: ‘I’m not convinced that codes of practice will work very effectively with such a fragmented and disparate industry’, agreed another. ‘Consultants should be encouraged (forced?) to undergo some formal, professional training and to have more open peer/client review. The “Chartered Consultant” exists but … I am not sure that the governing body for such a qualification has sufficient credibility within the industry. While many people happily accept that good consultants do not usually make good corporate managers, it also true that good corporate managers cannot automatically expect to make good consultants. More (objective) education is required for those considering life as a consultant.’
At the same time, clients were cynical of what they perceived to be reluctance on the part of the consulting industry to engage with this issue: ‘consultants usually do a pretty good job of insulating themselves from failure,’ was how one client saw it.
A clear agenda for change exists: the need for more reliable, externally validated information; a code of practice that provides clients with reassurance that consultants are genuinely – as they purport to be – acting in their clients’ interests; and greater accountability. However, the present inability to exchange information, a fragmented industry and intangible services all combine to form quite formidable barriers to translating these aspirations into a practical platform around which clients might congregate. But, without action from consulting firms on the concerns raised by clients, the possibility of an Enron-scale scandal haunts the consulting industry. ‘There is always some possibility of a high-profile project going badly,’ said one executive. ‘And, as we all know, the “court of public opinion” can convene quickly and render a verdict without all the facts, even before all claimants make it to court.’
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