Is This The End For Consultants?

In his recent book The Interim Revolution, business transformation expert, Pat Lynes interviews executives about their perceptions of consultants and the results are damning. The majority believe the primary concern of management consultancies is “landing and expanding”–not actually solving the problems at hand.

Cynicism around consulting is nothing new. That adage about a consultant “borrowing your watch to tell you the time” didn’t come from nowhere. But the problem is now stark. According to research by McKinsey, 70% of transformations fail. The irony of a consultancy sharing that statistic is delicious. The only reason anyone would need a consultant is to speed up transformation. If the business world doesn’t believe consultants can do that, why do they exist?

Why do consultants have such a bad reputation?

Philosopher Matthew Stewart in The Management Myth tracks the roots of management consulting. He describes how in the late 1800s Frederick Taylor set out to analyze company performance and was the original advocate of the first maxim of management consulting: “If you can’t measure it, you can’t manage it.” This belief gave rise to time and motion studies–the practice of analyzing systems of work to identify efficiencies and improve profit. It turbo-charged consulting. The product-market fit was good as in essence most businesses of the 20th century were production lines meaning there was no shortage of efficiencies to be identified.

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Cut to today and what drives business success is very different. According to Harvard Business Review, the world’s best organizations compete on differentiators other than price and prioritize increasing revenues over decreasing cost. In other words, a firm’s ability to out-think and out-innovate its competition is the primary driver of success. This requires imagination and ingenuity on a daily basis. It’s a team game. And it’s hard to measure in a time-and-motion context.

High-performing businesses have a secret. They focus first on helping people perform at their brilliant, imaginative, imperfect best. They prize revolution not routine, conflict not comfort, variety not predictability. All of this points to a simple truth: these days, people equal competitive advantage. But traditional consultants and their calculators were not developed to cope with this reality.

The new generation of consulting

The picture for consultants may look grim but there are reasons to be cheerful. In business, objectivity will always be valuable: it is hard to perceive problems from within. Top talent is hard to find which will continue to drive businesses to outsource. In the end, consultants are smart and are reinventing themselves now market forces demand it.

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So in this people-first environment, how do you spot a consultant that will be the right partner? Here are just three things to look for. They should:

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