The “incestuous relationship” between business schools and management consultancies is nothing new, but it seems to have stepped up a gear. Placement statistics published by the Financial Times suggest consultancies are now luring the majority of MBA graduates, offering salaries of up to $145,000 a year. Meanwhile, growing numbers of senior management consultants are teaching or becoming heads of business schools. In short, we have a system in which both MBA students, and the institutions that teach them, are increasingly detached from the real world of business; a kind of “Ponzi scheme of inexperience”. Perhaps this wouldn’t matter if consultants weren’t so influential. But, despite their lack of direct business know-how, they end up advising institutions everywhere – and often running them. McKinsey alumni alone have taken senior positions at Google, Sears, AT&T, Citicorp and Merrill Lynch. In his 2013 book on McKinsey, “The Firm”, Duff McDonald argued that the consultancy “has done nothing less than set the course of American capitalism”. No wonder things are such a mess. (Sathnam Sanghera, The Times, London)
All too often answers are staring management in the face. Consultants are called in because the managers themselves lack the courage to make tricky decisions, and find it politically convenient to have outsiders to blame if change goes wrong. If they quietly asked their staff, the most knowledgable people, for suggestions, they could get good ideas without calling in people who have absolutely no knowledge of the industry, and who will only ask the employees their opinions anyway. But CEOs, paid more and more outrageously, spend shareholder’s money to get recommendations that they could arrive at quite simply using common sense. The only exception to the above is the consultant with a genuine knowledge of a technical speciality, such a computing. Leadership is not a virtue found copiously in modern business.
I personally had a stint as a management consultant. I quickly discovered that telling the boss what he wanted to hear was the safest way of getting a nice thank you and being paid! I don’t entirely disapprove of calling in consultants. We are all human and need a disinterested person to validate our decisions from time to time, and it can be lonely being the boss. But to some people, asking their employees what they think could be improved seems to be a sign of weakness. Actually, I think it is a sign of strength, flattering to the staff and building the idea of being all in it together, sink or swim. this is a better, Epicurean answer.