The mystique of strategy consulting has inspired films such as Office Space and Up In the Air and TV shows like House of Lies. Often hysterically funny and uncomfortably close to the truth (the consultants’ whiteboard in Office Space with the title “Planning to Plan” is a personal favorite), Hollywood’s depiction of strategy consulting relies on an out-of-date perception of management consulting that looks nothing like the reality of the present.
Satire or not, the cliches associated with consulting do have an impact on how consultants are perceived, especially when validated by news reports about rogue consultants and disclosures of consulting debacles. While I generally agree with many of the criticisms of strategy consulting, I am more interested in demystifying what consultants do and how you can learn the same skills without having to work in the industry.
While the current evolution of strategy consulting is far more complex and broader in scope than ever before, consultants have had a big impact on the world. For example, did you know consultants helped invent the bar code and guided the rebuilding of the European economy after World War II?
The level of secrecy surrounding consulting is less about the big firms being “houses of lies” and more a culture of extreme, sometimes bordering on paranoia, and client confidentiality. Even the sharing of insights or self-promotion by a consultant is frowned upon by some firms. It’s this culture of client confidentiality that keeps client logos off of the firms’ websites, partners out of the media spotlight, and the inner workings of their firms as mysterious as a secret society’s rites and rituals.
This has led to all sorts of clichés that originate somewhere in reality, but often give far too much credit at times, and other times far too little credit to an industry, that in my perspective is a lot simpler than most people think.
Let’s dive into some of the common stereotypes and cliches of consultants and see which hold weight.
The consultants are here, layoffs will follow
Ask a manager what the worst part of managing people is, and they’ll probably name layoffs. The euphemisms for terminating employees reflect the verbal contortions used to cushion the blow of being “fired” or “getting the axe.” Instead, the jargon machine of modern business has given us “downsizing,” “right-sizing” or “made redundant.” At Boston Consulting Group they called it “delayering.” Absurd I know. The consultant “George Clooney as the hatchet man” cliché in Up in the Air, where he plays a slick HR consultant who provides “termination assistance” to company executives too chicken to fire people themselves.
Yes, there are human resource consultants who are hired to help corporate HR teams through the wrenching process of down-sizing, right-sizing, and delivering the tough news to laid-off employees that they’ve been fired. And yes, there are going to be impacts on corporate leaders who are expected to execute a strategy consultant’s recommendation to lay off 1,000 workers as part of a post-merger integration engagement, or a turn-around to get the company out of bankruptcy.
But for the most part, unless there is a major global recession, (like in the period from 2009 to 2011) consultants focus on helping companies generate growth and profit.
Second Opinions (Buying Confidence)
CEOs and company leaders are in their roles because they have proven that they can make big decisions. This does not mean they don’t stress about them.
Leaders love bringing in consultants to offer a “second opinion” or sometimes just to make them feel less afraid of making the decision. Even if a CEO is convinced their strategy is the right strategy, having their plan confirmed and endorsed by an outside consultant is a smart political maneuver that puts distance between themselves and any suspicion by the board of directors that what they propose is best for the CEO’s career and not the shareholders best interests.
Consultants as scapegoats
Consultants are often hired to be the bearer of bad news. McKinsey’s former leader of the firm’s Global Strategy Practice, Lowell Bryant, once quipped, “It takes a brave man to call a baby ugly.” Sometimes it’s smarter for a CEO to let an outside consultant make a tough presentation that may criticize past decisions made by their predecessor and the board.
Jamie Dimon, the CEO of JPMorgan Chase, once told Duff McDonald, author of The Firm: The Story of McKinsey and Its Secret Influence on American Business, that the advice of a name brand management consulting firm is like “A Good Housekeeping seal of approval. It’s political, so if you make a decision, you can say, `It’s not my fault, it’s their fault.’” McDonald points out that after Dimon brought McKinsey into Chase to help repair the damage caused by $5 billion in trading losses, Dimon admitted while most consulting engagements weren’t worth the price paid, “but McKinsey — well, it was the real thing.”
A consultant steals your watch to tell you what time it is
Shakespeare’s Macbeth declared life “is a tale told by an idiot, full of sound and fury, signifying nothing.” That quote, to me, embodies the cynical perception held by some critics that a management consultant is someone who (borrowing from the sub-title of Martin Kihn’s book that was the basis of House of Lies”) “steals your watch and then tells you the time.”
Some of this is true but there is nuance.
The surprising thing about working in consulting was how obvious some of the recommendations were to my client. But the thing I also realized was that almost no one was responsible for thinking strategically about what the company should do. In most organizations people are hyper-specialized across functions and divisions, working on vary narrow tasks, and as they have grown and gotten more complex often there is no one thinking about the overlaps of departments, tasks, and other high-level perspectives (including simple ones like “who is worrying about the customer?”)
Many organizations are adapting though, building their internal teams of former consultants that work across various groups of the organization.
Ex-consultants become CEOs who hire other consultants
Some skeptics think the top MBA programs, consulting firms, and CEOs are in an incestuous relationship only open to Harvard Baker Scholars who join a top consulting firm straight out of school, advise a client for a few years, and then eventually get hired to run the client company where they immediately hire more consultants and repeat the cycle ad infinitum. And there’s some truth to this one. Think of Lou Gerstner who went from McKinsey to American Express, and Jeff Skillings who went from The Firm to Enron, a poster child McKinsey could point to (and bill) when wooing prospective clients before Skilling’s fall from grace in 2001. The list goes on. Many former McKinsey consultants went on to be CEOs of some of the best-known brands in the world.
Yes, the air is thin at the top echelons of the prestigious colleges where the big firms recruit first-year business analysts. Yes, an MBA from one of the “right” business schools will get one’s foot in the door easier than a degree from a less prestigious one. And yes, the top management ranks in many top companies are filled with the alumni of Bain, BCG, and McKinsey, but they only represent a fraction of the consultants who comprise what CB Insights estimates is a $200B+ industry.
Not to mention that CEOs come from all over, including schools like Texas A&M and Boston College
Planning to Plan
The 90-day consulting engagement is over. The consultants have carefully prepared their deck and rehearsed their final presentation. After they reveal their findings, cite their facts, and explain their reasoning; after they make the big reveal of their recommendations…then what? Who’s going to act on those recommendations and make them happen while the consultants ride into the sunset and the company asks “Where did the experts go? If they’re so good, then why aren’t they sticking around to make it happen?”
Before the 1950s, strategy was regarded as something only chess players and generals cared about. The concept of a business school was historically more about learning how to become a bookkeeper than the analysis of data and the application of strategy frameworks to increase profits and gain market share away from competitors. If there is any cliché harder to dispel in the mind of a skeptic convinced consultants are bandits in $6,000 Brioni suits, peddlers of what Upside Magazine once called “the latest management consulting wank” it’s that consultants traffic in nothing but theory but the real work begins after they leave, never to be seen again.
No consulting firm would survive if all they did was burn their clients and wave their hands. Happy clients become repeat clients. Bain was the consulting firm that first committed to digging in to help its clients implement its recommendations when it committed to working with only one client from any given industry, and then only over long-term multi-year contracts. Bain also invested its time, money, and people in those clients, even placing consultants inside client teams for extended periods to ensure theory was turned into practice.
The reality for any consulting firm today is that clients demand some skin in the game and a commitment to go “beyond the deck” to actual implementation and execution. I worked in the operations practice while at McKinsey from 2008 to 2010 and the typical engagements were years long. Different teams might rotate through the project but the teams were aligned against a multi-year transformation effort. In recent years, these firms have even added dedicated implementation teams, different groups that get put on site for longer than three months.
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