Top-Consultant.com

In a recent edition of the newsletter, we highlighted the growing debate in the consulting industry concerning:<br><br>

* Who are the REAL consultants? Are large firms with hardware alliance partners really providing independent advice?<br>

* Does our industry require greater self-regulation?<br><br>

The issues surfaced at the Institute of Management Consultany&#39;s Annual Forum, where Big 5 leaders and mid-tier consultancy leaders locked horns over who was really still providing consultancy/ advisory services.<br><br>

The comments sparked a lot of debate, so read on and please add your own thoughts. Rgds, Editor

Dear Ed<br><br>

If consultants have an end game other than the agreed deliverable, they become a little like Independent Financial advisors in that every member of the paying public realises that somewhere along the line there is the C word to be dealt with. By that I mean Commission which cannot sit beside independence comfortably. However, due to changes in the law we are now all aware ...... However as far as I know consultants are not covered by these regulations. The point is if the client is made aware of alliances before awarding the contract they are making a fully informed decision. If on the other hand, alliances are kept quiet and then conveniently surface at the appropriate time this compromises the consultancy offering. <br><br>Going back to the comparison with IFA&#39;s, all clients will have in the back of their minds that they are being guided towards one particularly product/solution or another and that is inescapable. Therefore, consultancies that do have product/services alliances essentially become shadowy sales channels and not consultants at all. In this case the role of the consultant has changed or moved over rather, to a sale of product proposition rather than a contract deliverable such as Market Research Report, Technology Forecast etc.

<br><br>Implementation could involve suggesting certain products but surely this should be the stage after independent consultancy.<br><br>

I believe effective consultancy must be independent of alliances. To be truly pure and powerful, consultancy needs to be able to tell it how it is and empower the client to achieve their objectives.<br><br>

Maybe the Big 5 are just too greedy - they want a slice of the action in hardware and software terms as well as consultancy - OK but then they should lose their credibility as consultants. It all gets a bit murky doesn&#39;t it?

<br><br>As for self regulation - that&#39;s sounds like a lot of meetings (consultants&#39; paradise) and nobody but a few will ever adhere to the deliberations. Either you are or you are not ...........independent. Those of us that are (INTERCAI MONDIALE!!) should get the kudos for it.

Dear Editor,

<br><br>My view of &#39;Consultancy&#39; is that the definition HAS been stretched too far. I think the whole area (and wider ?) needs re-defining and that the IMC, or European/International equivalent should take the initiative and manage the debate, via consensus arrive at an &#39;agreed&#39; range of definitions to help the industry (and suppliers and customers) understand what &#39;consultants&#39; are and do. (N.B. Try not to be overly influenced by the &#39;Big 5&#39; and take also the views of academics, forward thinkers, visionary business leaders - who may NOT work for the big firms - James Dyson, Stephanie Shirley, Anita Rodick Trevor Bayliss, and many many more who work against the inertia of &#39;current&#39; convention.)

<br><br>What I mean by this encapsulates a number of wide and far reaching trends that are now affecting all sectors of business (see Charles Handy&#39;s &#39;The Age of Unreason&#39; and other similar publications):-

<br><br>- the business environment is very fast changing (too fast to cope with ?), the government structures and systems (tax, regulations, red-tape, attitudes, etc.) lag far behind and hinder smooth development.

<br><br>- society has changed and is changing with needs and demands on greater flexibility in work conditions, education/training/development - we need pools of transient skilled, specialist labour which is constantly being up-dated.

<br><br>- we need data/information/analysis/intelligence/knowledge constantly up-dated, instantly available and accurately customerised to MY requirements - to understand customers and their current/future real needs, resources (in the widest sense - money, people, time, etc.), market, technologies, constraints (laws, regulations, etc.) and ethics.

<br><br>- we need to be able to initiate, foster and accelerate the development of information, intelligence and ideas. We need all the people to be ideas generators and we need those ideas to get to the decision makers so that better, informed decisions are made better and quicker across business and society.

<br><br>- we need much more consensus decision making with a new form of leadership to engender the above. We need subsidiarity, good delegation and mutual trust throughout organisaitons.

<br><br>- yes, of course we need technology, efficient production, quality products and services, etc., but these relatively &#39;hard&#39; aspects of business are well developed (but there is still much more to do) and the relatively &#39;soft&#39; aspects mentioned above are far more difficult to understand and tackle. Now is the time (in fact 20 years ago was really the time !) to really make an effort.

<br><br>&#39;Consultants&#39; or something like consultants - external advisors, interim managers, contract helpers, subject specialists, change managers, CRMers, etc. - are probably the initiators of all this.

<br><br>I hope some of these ideas help.

Dear Sir,

<br><br>In reply to your request for responses to the &quot;Business & Consultancy News&quot; Email article, and in particular, the question &quot; Do we as a profession need greater self-regulation? &quot;.

<br><br>

My personal opinion is the industry does not need any more regulation, rather a redefinition of what the term consultant means. As your article pointed out there is concern about the impartiality of the larger consultancy companies. Indeed, in the rumour section of the Email there was a possibility of Microsoft acquiring a large consultancy.

<br><br>

A consultant is a person or company that you approach to give you impartial advice and guidance that best suits your company, its present and future goals and business plans. That advice, by definition, should not be tied to a particular solution from a single vendor but rather should present options based on the best products or services available at the time.

<br><br>

The present situation where alliances, or partnerships, between consultancy companies and large multinational vendors will inevitably lead to erosion of that impartiality. That leads to comments like that of Mr Buckle.

<br><br>

I am in complete agreement with Mr Buckle&#39;s views as I have seen the results of these alliances where customers have taken a consultancy and incurred a greater cost than necessary to satisfy a particular &quot;in house&quot; solution. Other solutions could have been implemented at lower cost with similar if not better efficiency.

<br><br>

Unfortunately, this shift from &quot;pure&quot; consultancy to vendor driven

consultancy is motivated by customer perception. The customer perceives that the consultant is independent other wise he would approach the vendor(s) direct. The customer perceives that he does not have the expertise, and/or knowledge, to differentiate between vendors and engages a consultant who he believes does, to do so on his behalf. Given this situation it is simpler for the consultant to present a package &quot;off the shelf&quot; so to speak, rather than research the solution that fits exactly. It incurs less cost for the consultant to do this; it may not however

result in lower cost to the client.

<br><br>

Unfortunately, as the marketplace becomes more competitive this situation will continue to become the norm with the devaluation of the term &quot;consultant&quot;, and inevitably a lack of trust and confidence in the industry as a whole.

Sir,

Certainly I believe that for some while the term "Consultancy" and certainly the composite "Management Consultancy" have been stretched in use and misused to the point where they are now almost meaningless. Too many so called "Consultants" have become "Bodies" to be virtually traded to clients to actually undertake work which the client either does not have the appropriate human resource to execute or else does not have the capacity to undertake. As a result there has developed a significant blurring of the dividing line between true "Consultancy" and Contract Work, to the point where one is often the same as the other .

Consultancy originally meant exactly what it implies - external and impartial experts used to advise clients on any issue or impending change, when internal, impartial expertise was not available within a client company. The emphasis was always on advising, not on actually executing. There have been and are many Consultants in many areas of specific expertise, typically such as Consulting Engineers.

"Management Consultancy" [MC] was originally a much more specific type of consultancy, where the expertise required and provided was for the senior management of a client organization, and concerned aspects of managing their organization for which they either did not have the necessary in-house expertise or experience, or they required a second expert opinion. Similarly the emphasis was always on advising, not on actually executing. The particular qualities of a Management Consultant were originally significant experience of actual Line Management, preferably in a similar or allied industry to that of practice, and much expertise (defined usually by both formal management education & qualifications and senior management track record).

The blurring seemed to commence when the largest Accounting practices moved into MC, and began to use the opportunities presented by auditing and management accountancy to sell consultancy services. Then particularly as the influence of IT in business increased, IT consultancy began to become mixed up in it all, eventually dominating on the basis where IT was promoted to dictate all that was done to manage a business; instead of IT being promoted as the tool which it should be, to manage a business more effectively and efficiently with suitable automation.

The larger MC practices then set up their own IT departments, and increasingly promoted IT as the master of businesses, (effectively causing the "tail to wag the dog"). Due to this they began to promote and capitalise on Business Process Re-engineering (which was really a way to excuse having to distort established and successful business processes within an organization, as originally devised by managers who actually understood the business, so that the only available relatively-limited IT systems could cope with business process requirements which otherwise would have been too difficult to automate with the available IT technology). Particular MCs then began to establish relationships with particular IT suppliers, so that they could be familiar with and help to sell these to clients. Since businesses were now being increasingly sold the idea of being dominated by the available IT instead of the business managing IT to benefit the business, the original management skills and expertise began to become apparently unimportant, business processes were now devised by Computer Programmers (instead of managers), and the IT portions of these MCs expanded rapidly; in addition there was an increasing volume of IT implementation services (including Project Management) sold to and provided to clients. On this basis a number of significant IT companies then established their own so-called "Management Consultancy" arms, since it was increasingly interpreted that MC was about IT. It more and more got to the point where now the true advising portion of the original larger MCs diminished more rapidly, and most client work was concerned with executing and undertaking on-stream client activity, particularly IT-related activity and implementation.

Latterly we have now got to the point where there is really little of the original Management expertise left in many of the larger MCs, and most of the expertise now seems to be in IT and Accountancy. Due to the fact that so much of what MCs do is now IT-related execution rather than advising, and given that there are many IT Contract agencies and Accountancy Contract agencies who supply short-term employees to client companies in similar roles, most of the former clear boundaries no longer exist, and it is not entirely discernible where a dividing line is between temporary staff, Consultants and Management Consultants any longer. (This is particularly significant since in many of the larger prestigious client companies you will now actually find people doing identical work within the same functional client team, one having been placed by a so-called MC, another having been placed by an IT Consultancy and another having been placed by a Contract Staff agency.) Indeed there is an increasing tendency by the larger MCs to view a "body" placed with a client to work on a team as a revenue-generating opportunity, to be maintained for as long as possible. That is the other key blurring which has taken place; previously in an advisory rather than execution capacity there was no predilection to extrapolate the duration of an advisory assignment, to generate a greater stream of revenue.

I do not believe that it would be possible to have any meaningful regulation for actual expertise and terminology in consultancy. I believe that we need to re-apply common sense and call a spade "a spade". We need to discriminate again properly between what is really Expert Consultancy, IT Consultancy, Contract Work, Contract and Temporary Staff agencies and above all what is truly Management Consultancy. I believe most sincerely that the position is not assisted by the fact that the IMC does not include a requirement for formal Management training, formal Management Qualifications and Line Management experience as pre-requisites for their CMC label.

The days of the objective consultant are dead. In fact, I suspect they never really existed.

Consultants are tied to their own way of doing things. We all know the 7 rules of Consultants A and the 4 laws of Consultant B. These naturally predicated the nature of the solution. They are what was sold.

The solutions today are also predicated on a set of rules, except these now include a set of solution tools that the company decides to start out with, much like the rules outlined above. It is a natural progression. Perhaps the issue party one of outside interest, so let&#39;s forget for a moment that the solution tools are made by an outside technology company and imagine they are created internally, a way of delivering the promise of the original 4 laws. I don&#39;t imagine there would be the same outcry, because everyone would know what was going onwithout having to feel suspicious.

The problem right now is that consultants have failed to stand up and hand on heart proclaim that this is what they are tied to using. Worse then that, but even more unsurprisingly, no one has ever stood up and said &#39;Our solution tools are not going to work with your problem&#39;.

It seems crazy to think they would doesn&#39;t it? But if you take other consultative industries, for example advertising, there is growing Kudos in saying no to business that simply doesn&#39;t have the right fit ie the creative tools are not best suited, however much money the clent throws around.

This was only achieved by a raft of smaller, brighter, more exciting agencies who like David, have outsmarted the Goliath&#39;s with the most surprising weapon ever found in the corporate world. Honesty.

From consultancy to honsultency. Must be a fee in that somewhere.