Radio
Chilling words
Michael Vestey
According to Radio Four's In Business last week (Thursday) the remarkable boom in management consultancy over the past 15 years has come to an end. Managements, it seems, are actually managing, thinking for themselves. Peter Day explored the phenomenon and attempted, without success, to establish if the rise of the consultant had actually worked. Not surprisingly, only the consultants thought it had, others weren't so certain.
Day began by saying. 'They're among the most chilling words in the English language — -I'm the consultant, I'm here to help you." He went on to say that the programme encountered difficulties in finding clients who would talk critically about their experiences at the hands of the consultants. It would have been fascinating to hear from those BBC managers present when the Corporation was virtually run by the consultants in the 1990s, a costly operation which did nothing to improve programmes or morale.
However. John Sunderland, chief executive of Cadbury Schweppes who was prepared to be interviewed, was not that impressed by consultants: 'Our experience of using consultants is, the larger the corporation and the bigger the project the more likely it is to go wrong. It is something in the nature of very large consultancy organisations trying to cover the waterfront in a very complex businesses environment like ours and not really truly understanding it. It is companies that produce wealth. Consultants, if I can put this delicately, are essentially the parasites of that value-creation process. They can contribute to it but at the end of the day they also live off it.' He warned against having them running the operation completely; that was the management's responsibility.
We heard how consultancy had begun a hundred years ago when specialists in time and motion — how quaint that expression now sounds — went into firms to reorganise the shop floor to improve productivity. Later, as one consultant told the programme, you had to have had experience of an industry in order to advise it. Now, he said brightly, you go straight from university to transform a company. He described how after one week in the job he was sent to Ireland to find investment opportunities for a Japanese company and make recommendations. Day put it to him that all the worst fears about management consultants were encapsulated in that one anecdote.
He couldn't see it, though, talking of the value of 'bright young things who brought raw intellectual horsepower' to problems. It seems that the large accountancy firms such as Arthur Andersen added consultancy to their services only to see it outgrow the main business before splitting and leading to the creation of a firm with 'the name that means, well, next to nothing, Accenture'. The Enron affair finished the firm it left behind. Accenture's man said bullishly that he wanted it to become one of the biggest companies in the world. It was an $11 billion company and they were aiming at becoming a $40 billion firm.
Another consultant was less optimistic. He thought the downturn had been massive. There'd been a hardening of attitudes. Firms were saying, let's question whether or not we use management consultants. Can we get it done ourselves? Clients are saying, it is not believable that you can do everything. This, he thought, suggested the market was maturing. One can understand a firm wanting to bring in specialists to install a computer system compatible with its needs. It's a complex task and one can't expect the expertise to be on the premises.
It seems, though, an admission of defeat to spend large sums of money on consultants who can't be expected to understand the nature of a business, as happened at the BBC. The one thing overlooked, in my view, was the essential creativity of the Corporation and how that depended on morale. Once that goes, as it did for a time amidst the frustrations of the internal market introduced by the consultants, the programmes suffer. Even if there's a case to be made for an outsider's fresh eye being cast over a company that needs to make a profit to survive, that didn't apply to the BBC.
Cushioned by its licence fee it should have been left alone, apart from some improvements to its senior management. It got the consultants instead. It makes one wonder if there's no coincidence between that and the YouGov opinion poll for the Daily Telegraph which showed this week that two thirds of those surveyed now believe the licence fee should be abolished. At the end of In Business Day asked an industry pundit if it was time for the management consultants to bring in the management consultants. 'Yes,' she agreed.
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