Why Do Individuals Get Consultancy?
How much organisations buy consultancy? Is buying consultancy a sign of excellent management or a sign of inadequacy and failure? Is not it management's job to manage? Isn't that what they are procured? If therefore, why use management consultants? And why are so several clients apparently thus ready to spend millions or even tens of millions on consultants to help them manage their organisations?
Throughout my time selling major consultancy comes to almost one hundred, mostly well-known organisations in over fifteen countries within the Americas, Europe and Asia, I constantly struggled with whether we tend to were very providing any value to our clients. There have been, after all, some successes where I used to be very proud to be involved. But, many of the organisations that I saw appeared almost enthusiastic about management consultancy. Frequently there would be several major consultancies working for them at the same time and several of them spent millions on consultants year after year in what the late Lord Hanson, described as "corporate cowardice". Many of these management groups appeared to me to be making certain their own personal survival by continuing to pour cash into the hands of their favourite consultants to do the task that they were ostensibly utilized to do.
As I remember over all the additional questionable management teams that I've got come back across, most of whom were regular shoppers of variant bucks and pounds and euros of management and IT systems consulting, there appear to me to be four main varieties of scenario where the top management and their consultants spent huge sums while delivering little to no value.
1. There is one law for the wealthy and another for the poor
Many management groups are ruthless in controlling their costs and their expenditures when it concerns their workers - reducing budgets and firing folks were often painful annual rituals. Yet, when it issues the survival, well-being and luxury of prime management and their favorite consultants, there seem to be no limits to the organisation's generosity. Many of our purchasers threw millions at their executives and consultants while firing thousands of their staff.
2. We'll take the rewards however not the responsibility
Another common characteristic of the management groups, for that we have a tendency to worked, was the power to require the credit and the large financial rewards when business was smart, but a bent to avoid any responsibility when there have been problems. I saw this in many shoppers who were lambasted within the press for their management's greed, incompetence and avoidance of responsibility while they generously spent cash on consultants and awarded their management massive bonuses.
3. Management as a fashion accessory
A 3rd scenario that provided vast amounts of work for us and our competitors was when a chief executive or senior management team seemed to be hooked on the most recent management fad - Business Process Reengineering (BPR), implementing some new computer system, fixing an Internal Market, jumping into some new growth industry, outsourcing, or whatever. In such cases, there was an inclination for senior management to believe that only they, and of course their consultants, were sensible enough to 'see the light'- solely they'd a transparent picture of the changes their organisation required to make. Nearly everybody else in their organisation was apparently too stupid or too resistant to vary to embrace prime management's new bright idea. By cosying up to such executives and encouraging them in their fantasies, we have a tendency to were able to sell actually eye-watering amounts of consulting to convert the full organisation to the 'new faith'.
4. It's solely taxpayers' cash
When the Labour Party was in opposition, they lambasted the ruling Conservative government for spending up to ?500 million a year on management and IT systems consultants. This was, they thundered, a disgraceful waste of taxpayers' money - cash that should be spent on front-line services like hospitals and schools rather than being handed over to a few already wealthy consultants.
Currently New Labour are in power, they seem to have modified their minds. The New Labour government will pay over ?60bn of our money - at least ?10bn for management consultants and at least another ?50bn for IT systems consultants. Yet thus way nearly all the most public-sector consultancy comes are massively late, vastly over budget and catastrophic failures - the Child Support Agency, Family Tax Credits and after all the NHS' infamous Connecting For Health IT system that should have price about ?two billion and can actually swallow up over ?12 billion without delivering something of any value. If this case continues, and it looks seemingly it can, then there will be more major cuts in front-line services to pay for the multi-billion value-overruns on government consulting projects.
Conclusion: Great managers are not consultancy addicts
Recently, a newspaper did a comparison of the heads of 2 major retail chains, who were both retiring at concerning the same time. One of those chief executives managed to quadruple his company's share value in the last ten years of his long tenure and to require its market capitalisation to over ?3bn. He was described as; "a retailer and an entrepreneur...minded to make business organically...seize the chance in an instant......attention to detail, willingness to require risks, trading mentality".
The opposite CEO managed to almost halve his company's share worth and cut back its market capitalisation down to simply ?139m from a high a few years earlier of well over ?600m. The commentator underlined this gentleman's issues with call-making and tendency to depend on management consultancies for advice, "a manager with a penchant for management consultants...well-known for his ability to procrastinate ad infinitum.....probably to splash out on acquisitions.....inability to form decisions....tendency to surround himself with advisers".
Normally, my expertise suggests that smart management manages and only very sometimes hires consultants for quite specific tasks - questionable management typically hires consultants and too frequently seems to become almost enthusiastic about them.
Author Resource:
aaron adish has been writing articles online for nearly 2 years now. Not only does this author specialize in Consulting, you can also check out latest website about
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