Capability, expertise and research will lead the way as consultancy firms shift focus from processes to people, writes Claire Arnold
My name is Claire Arnold, and I am a management consultant.
Are these words that should be spoken with a sense of pride, or are they a source of embarrassment – a confession to be muttered at that guilty morning croissant or the trust-circle at workaholics anonymous amid the bankers and politicians?
The world of management consulting has come under a good deal of considered attack in recent months. For example, Francis Maude at the UK Cabinet Office singled out consultancy as one of the simplest savings open to the Civil Service in its efforts to reduce overspending in the Public Sector. How has a profession that positions itself as a thought leader dedicated to making organisations effective become such an easy hunting ground for negative press and generalised opprobrium?
The answer lies in the economics and culture of global businesses – the drivers of scale and the roots of power.
Initially, many consulting businesses were advisory offshoots of big accounting firms. With their access to and relationships with the board members of client companies, they sought to extend the management letter that accompanied the accounts into an advisory service. When this practice was outlawed and firms divided, they sought a new annuity income as a platform on which they could afford to offer advice. That platform was IT.
Encoding inefficiencies
This is a capacity rather than a capability play – one supported by an invading army of systems specialists and fraught with danger for the client. IT system implementations are billed as platforms on which massive change can be achieved in businesses, whereas in truth they are a huge burden on organisations, not to mention a comfort-blanket for executives who would rather not grasp the nettle of leadership.
There are two essential dangers here. In making custom and practice electronic, businesses code in the overall muddle and inefficiency that people manage around on a day to day basis, and in doing so remove the people who add that vital dose of common sense or local knowledge needed to make things work.
Worse still, it hands over the day to day control of activity and prioritisation to a team of outsiders whose loyalty is not to your business but to theirs. This has become the way in which the global armies employed by these big firms are kept busy, and just like the British in India, they don’t just seek to win the initial engagement – they want to move in and govern.
So, is there a future for consulting or will more organisations, like Francis Maude, ask the legions of technologists to move their applications off the lawn and reconsider their contract arrangements?
The answer will depend on leadership and honesty at the top of both consulting firms and businesses. A new model for consulting is emerging: one based on valuing capability over brute capacity and automation, with that capability developed on the foundations of expertise and research.
At its heart is the knowledge that there are only three things in any organisation: the product or service that you sell or provide, the processes by which you make decisions, and your people. Between these three elements there lies the essential truth that if you don’t pay real respect to your people, no amount of systematisation will make the business work any better or cheaper.
Shaping true engagement
Respect grows from the top. ‘Employee engagement’ will not be achieved just because you’ve put in the best software, but because the leadership has made it clear what the goals of the organisation are, that these goals are supported by firm principles, and that these principles guide decision making. So, if cost cutting is a driver, it is much more powerful to ask what we will and what we will not do in the future than it is to pass the buck down and suggest that it’s possible to do it all minus a third of the workforce. That isn’t to say that once the initial question is addressed your team won’t tell you, when asked, that they could easily make things work with fewer people – but it would be their decision.
As a result the new consultancies are smaller, and staffed by people experienced both in running businesses and in working on projects; through which they have developed deep insight and innovative approaches to provide clients with educated choices.
At the heart of these consultancies is expertise and intellectual property combined with a deep and abiding drive to get to the heart of the matter. Above all, there is a new reliance upon personal integrity and honest, straight talking relationships. At Maxxim we are proud of an individual approach to organisational challenges that resolves strategic issues and that looks to connect systems and data to the real people in an organisation – its own employees.
Claire Arnold is a founding partner of Maxxim Consulting. For more information www.maxximconsulting.com
