The Future of Consulting

by Tune Hein-Sorensen

“WE DON’T USE CONSULTANTS BECAUSE…” THE PROMINENT BANK CEO TOLD HIS AUDIENCE – THE ANNUAL MEETING OF ANDERSEN CONSULTING. He explained how his managers knew better than consultants, why consultants would weaken his leadership system, why it would signal distrust of his employees and managers, why he needed substance rather than the latest fad, and on and on.

The speech became a taboo topic in the organization in the coming years. No one ever had the courage to ask the managing partner why he felt that this was exactly the right speaker for the annual meeting. Unfortunately, the bank CEO was right on a number of things – as people at that level often are. He talked about his feelings, as well as the issues. The debate about the benefits of consulting is driven by feelings and fears as much as by facts.

Sifting through the evidence, and our experience, we have found some principles that underpin successful consultancies – things the wise buyer should know about the ability to take advice, and the trends in consulting.

INCLUSION AND RELATIONSHIPS
Inclusion is a powerful tool to build loyalty. It is an organizational capability. The consultant begins as a stranger. Some organizations view the “outsider” as a threat. They may recognize the services are needed, they may be polite and professional towards the consultant, but fundamentally don’t trust him/her. So the consultant is not included, and not given the full story. Organizations with low inclusion capabilities should not waste their money on consultants. In other organizations, the consultant, while still initially a stranger, is welcomed and included. There is eagerness for the potential contribution, active seeking for a catalytic effect to help the organization achieve its mission. There is trust and openness.

As a consultant to Nestle in the early 1990s I received unconditional inclusion in the organization. I was part of the team – accepted. My contribution was valued, and I developed a strong loyalty to the organization and its products. Even now, ten years later, I still buy Nescafé instant, rather than coffee beans. And on family trips, on a hot summer’s day, I will bypass stores, over the protests of my family, to get to the one that carries Nestle ice cream.

Organizations must be able to accept and include the consultant before they can really benefit. Equally important, the consultants must be able to build good relationships, be trust worthy, and honour their inclusion by acting respectfully.

Effective consulting is determined by the quality of the relationships. Relationships are needed to build the trust, which is necessary for meaningful, open, and complete interactions between the consultant and the people in the organization.

FIVE TRENDS IN CONSULTING
Effective consultants practice the five emerging trends in consulting:
1. transferring knowledge to smart customers;
2. supporting the leadership system;
3. dialoguing, not reporting;
4. becoming a strategic investment rather than a cost; and
5. moving from concepts and back to advice.
The rest of consulting is in effect just outsourcing.

1. Transferring knowledge to smart customers.
We have met many teachers who were not good consultants but we have never met a good consultant who was not a good teacher. The transfer of knowledge is an integral part of good consulting, and will be increasingly important in the future. Customers are sophisticated and smart. There is no longer any tolerance for an arrogant consultant coming with pre-packaged solutions, expecting the stupid client to simply nod his head in acceptance. That world is gone – although not all consultants have noticed. Some still present a fixed menu they think applies everywhere. But effective consultants present a buffet of useful knowledge to the client, from which the client is smart enough to select what he needs, in a dialogue within the organization and with the consultants. They go beyond transferring knowledge and presenting possible solutions to “making them stick.” Clients are demanding that more and more substantial knowledge stay in
the organization.

2. Supporting the leaders.
The greatest barrier to gaining a pay-off from the investment in consulting is leadership’s fear of being undermined. The stories are many. A global consulting firm was hired to shape up the client service function of a public organization. Senior managers told the middle managers that there was no way around it and they expected full cooperation with the consultants, with no resistance to making the investment beneficial. The consultants’ contract made their payment dependent on improvement to performance measures in the client service area.

Two months into the project, performance measures were worse than ever. The consultants went to the CEO and said, “You need to follow our recommendations, because otherwise there is no chance of influencing the measurables in our contract and we do not want to debate these things with your middle mangers.” The CEO ordered the recommendations be implemented. A month later, things had deteriorated further and the project was halted. The senior executives were furious and blamed the mid managers. But the mid managers had documented that they had followed the consultants’ recommendations – including the ones they knew wouldn’t work. The CEO was furious at this answer. How could the middle managers implement solutions they knew wouldn’t work, and then blame the consultants? “Because you told us to,” they replied.

It is of the utmost importance to not undermine the leadership system by the way the relationship is set up or the way the consultant behaves. Good consultants in the future will actually support the leadership system and help every leader in the organization grow in his/her position. The good consultant is a catalyst for success for everybody in the organization because they work for the vision. They bridge the gap between middle management and senior management, not widen it. This must be an area of focus for senior management and it must be a skill area for the consultant.

3. Execution as an integral part of the project.
The old consulting model of “We’ll tell you what to do in a report and you will pay us a lot of money for it and then struggle to implement it yourselves” is dying, thankfully. There are simply too many stories about outrageously expensive strategy reports gathering dust on bookshelves or even being so rejected they are tossed into the recycle bin. One pharmaceutical industry giant spent four million dollars on a strategy report by a global consulting firm and the report was literally shredded five days later. In the future, writing will not be the primary channel for consulting. Reports will not be the main deliverable. The primary channel will be dialogue. Just as with leadership, the way to create effects and influence people is not by memo, it is through dialogue and interaction, through relationships not reports. The future consultants will dig into that relationship-building toolbox, build on their reception by the inclusion values of the organization, and together with the organization implement the solutions effectively.

4. From costs to strategic investments.
Hiring a consultant has been seen by many as the cost of fixing a problem – a problem the manager has identified, knows the solution for, but lacks the courage to tackle directly. Such uses will inevitably undermine the leadership system. Leaders should fix their own problems. Instead, consultants will be an investment in the development of people, of organizations, of strategies, an investment to move the organization towards the mission. An investment in execution, catalysts, and a channel to gain knowledge and experiences. An investment in inspiration to feed the execution capability of the organization. Hence, consultants will be seen as in two groups: one with a high degree of integration with the organization; and the second more as suppliers of packaged systems, processes and solutions. We see that trend today where some consulting houses become less and less consultants and more and more suppliers. Their concepts and commodities are best sold to the purchasing department.

5. From advice to concepts and back to advice.
Consulting traditionally involves providing advice, telling people what they should do, with all the issues of ego and modesty that involves. But government was revolutionized in the 1980s and 90s by the enormous IT investment that led the consultants to more and more packaged solutions and concepts like TQM, Service Management, the Balanced Scorecard, etc. Consultants came to install a concept or a system and left soon after. But the pendulum is now swinging back. Consultants who are not being suppliers will go back to the old values of advice, serving clients in their context and for their best interests. In the future, the essence of consulting will be to support the strategy and progress towards the vision – as a catalyst for knowledge development and execution – in a humble collaboration with the organization. This philosophy is symbolized by a consultant we know, who has two things on his mantle – a globe and a statue of Socrates. They remind him his services should be delivered with a world view, as he learns from local and international experience, and makes adjustments that are practical in the specific situation. And that he must maintain the humility of Socrates, who sought by asking questions to get to the truth. Or as Czech prime minister Vaclav Havel, expressed it: “Follow those who seek the truth, run from those who claim to have found it.”

Consulting can be very simple – but still of high value. As popular consultant and best-selling author Ken Blanchard puts it – “My best advice is often ’Don’t change -just start doing what you say you do’.”


Tune Hein-Sorensen is a partner with the European branch of Right Management Consulting.