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No one ever got fired for hiring McKinsey, or so the saying goes.
The total size of the global transformation market is expected to grow to $2,279.4bn by 2025.
So, someone IS winning from transformation programmes and it’s not necessarily going to be you or your customer.
Mariana Mazzucato, who alongside Rosie Collington has authored the new book The Big Con says in an interview with the FT that these companies have “have no expertise in the areas that they’re advising in.” She claims it’s a confidence trick. “Consultancies and outsourcers, Mazzucato argues, know less than they claim, cost more than they seem to, and — over the long term — prevent the public sector developing in-house capabilities.”
In May 2020, McKinsey & Co. won a £563,000 contract from the U.K. government just to shape the “vision, purpose and narrative” of a new organisation leading England’s Covid-19 contact-tracing efforts. Half a million to describe your purpose? Apparently the capability of some elements of the public sector doesn’t even stretch to articulating why it exists.
Naturally ,the professional consultancy trade associations aren’t great fans of the book. However, anyone who has worked as or with a consultant know there are at least two types:
- Those who see their role as transferrers of skills and knowledge, building the internal capability.
- Those who see themselves as expert advisors, imparting wisdom to organisations that don’t know the way forward.
Yet, if we believe what’s outlined in The Big Con, more operate like the latter. Indeed it’s rare that big consultancy leaves behind a more capable, more highly skilled workforce when, and if, it exits.
Mazzucato and Collington argue that governments and the public sector have simply stopped investing in their own capacity and capabilities, and because they fear failure, they do not take risks. Management consultants rush in and promise to fix the problem but end up enfeebling them instead.
Companies or Government’s haven’t always operated in this way. The birth of the change management movement only began in the 1960s and 70s – when big consultancy began to see a vast new market – convincing organisations of the benefits of ‘transformation’.
Alongside this came the development of a distinctive, pseudo-scientific language of change which the consultants needed to pitch themselves to new clients.
Arguably, people are now wising up to the Big Digital Transformation Con but according to the book the money making machine will move on to the next one: ESG and sustainability are the latest manifestations of a tried-and-true strategy for the consulting industry.
It’s boom time if you are offering advice on environmental, social and governance advice goals. Mazzucato and Collington point to a forecast predicting that the global market for “climate change consulting” could exceed $8.5 billion by the end of 2028. ESG is officially the new digital transformation.
As Adam Lowenstein writes there’s some real chutzpah here, the very people advising us on ESG “continue to do work for oil and gas interests whose business models—and thus their ability to continue hiring consultants—depend on extracting fossil fuels and obstructing efforts to regulate their industry.”
Perhaps if our organisations were more amenable to gentle iterative change rather than lurching forward intermittently to catch up on digital or sustainability initiatives we’d become less reliant on these ‘experts’.
I was talking this through with Rob Rowlands (a consultant who falls into the Type One category!) yesterday about how organisations really need to develop their understanding, skills and confidence about how they approach problems and explore solutions.
Too often organisations just outsource the thinking or the problem to someone else. In a post Rob wrote last year he talks about starting where you are. “There are problems – old and new – still to overcome and ideas to develop so that you can move forward more effectively. Maybe your first reaction is either to feel overwhelmed by the size of the task and give up or you find someone to come and do it for you.” It’s that mindset rather than developing internal capability that Big Consultancy can thrive on.
What are the gaps in what you know?
What can you do to fill them?
I’d suggest capability needs building in at least four areas:
- More reflection and contemplation rather than lots of management activity. Getting better at asking new and unusual questions.
- Devolving resources and influence to those closest to the problem rather than outsourcing them.
- Changing little and often through small-scale experimentation.
- Not rolling anything out until we have evidence that it actually works.
In his piece Adam Lowenstein points out that when governments can’t solve problems or deliver effective services to their citizens, people become more disillusioned. This is equally true within our organisations.
When colleagues see all the thinking outsourced to highly paid hired hands who depart as soon as the contracts end, they suffer the same disenchantment.
We all need a little outside help, for sure. But ultimately it’s your company, your purpose, and your people.
Culture is devilishly hard to copy and should ultimately be unique to each organisation. And I know that to be true, because McKinsey said it.