By Leon Gauhman
Leon Gauhman, chief strategy officer at digital product consultancy Elsewhen, explains how clients can sidestep endemic problems in the consultancy sector, vetting for transparent advisors who are worth their weight in management gold.
The pandemic has delivered something of a double-edged sword for the beleaguered world of consultancy. Never before have such huge opportunities emerged from mass-scale health deliveries, coupled with the move to rapid digitalisation under lockdown. And never before has a sector so conspicuously struggled to meet the incoming tsunami of demand.
Even now, months after the well-publicised failures of Wirecard and the UK government’s Test and Trace strategy, lessons have yet to be learned at both ends of the client-consultancy ecosystem. The likes of Deloitte, KPMG and PwC have been awarded fees of up to £600million from public sector Covid-19 related contracts, with hugely inflated teams drafted in to push through government goals mired in crisis. The Department of Health and Social Care alone spent £40,000 a day on a team of digital specialists.
Six months later, and management consultancy is still a go-to solution used everywhere from digital banking to Network Rail. And yet, management advisors continue to be beset by problems that make their services seem at best, hit-and-miss and at worst, morally culpable. Take the fresh set of lawsuits facing McKinsey in wake of America’s devastating opioids crisis; accusations of a conflict of interest at NHS Digital over its work with Accenture; or the Covid-smoking research paper that was retracted over a consultant’s links to the tobacco industry.
While failures like these often erupt on a spectacular scale, human error is just as likely to scupper what seems like a promising consultancy contract (remember the Microsoft Excel blunder that led to the loss of nearly 16,000 Covid tests last year?).
All of this is not to say that clients should avoid jumping aboard with private consultancy. Indeed, the rewards of procuring expert external advice – especially when it comes to complex project delivery targets – can be huge. But in order to work the consultancy system, clients first need to put in the work: researching diligently and avoiding the constant bandwagon call of “big is best”. Here’s how decision-makers can exercise caution and control in their selection process, to optimise consultancy results:
1. Don’t prioritise panic over level-headed procurement
When a major crisis strikes – such as a global pandemic – it may feel reassuring to reach for big-name consulting, or to tap the old-school tie network for recommendations. Yet as the scandal around casual tax conversations between politicians, business leaders and Covid-19 contracts underlines, hiring consultants is a major investment. Stakeholders including – but not limited to – shareholders, the National Audit Office, the media and the general public expect a good return.
As a result, decision-makers have a reputational responsibility to engage in a rigorous and transparent selection process, regardless of how urgent the circumstances. They need to separate themselves from the current endemic trend towards opaque and off-the-cuff business dealings evident in sagas such as Greensill and stop viewing “track record” and “emergency” as sufficient reasons to put a company on a pitch list without due process.
2. Use consultancy to harness the very best in project management tech
From AI to analytics, data mapping and blockchain, technology exists to map and manage big projects in a much more transparent, efficient and painless way than is currently the case.
In this climate, clients could do worse than require their consultants to leverage state-of-the-art tech tools, and combine these with design thinking to apply data and learnings from past projects. In turn, this would enable transparent procurement processes, as well as helping to ensure that big-investment projects stay on time and budget.
A key area of focus needs to be around developing accelerated procurement processes that can be deployed in an emergency such as a global pandemic. Currently not many companies use advanced procurement analytics, but such datasets are expected to bring about major shifts in sourcing and supply chain technology over the next five years; and companies that stay ahead of this curve will fare the best.
Smart, tech-enabled processes would allow vital initiatives such as Track and Trace to get going quickly while ensuring procurement is robust, transparent and involves the necessary due diligence to protect stakeholders’ interests and money.
3. Beware hiring consultants in your own image
Senior executives are often charged with having a conscious or unconscious bias toward younger versions of themselves – thus neglecting genuine talent. There’s an analogous situation with hiring consultants, which is that clients often feel like they need to work with a mirror-version of their companies: “Blue-chip, global client seeks like minded consultant of similar age, size and pedigree for LTR.”
Leaving aside the sheer cost of working with big consultancies, there is a risk they will simply act as echo chambers – unable to approach the core problem without second-guessing the client’s preferred solution. When considering a pivot to digital strategy in particular, clients need to interrogate closely, asking difficult and even painfully honest questions. For example, “What can a 150,000-employee auditing firm founded in the last century teach us about the cutting-edge AI/data processes that will help us grow and compete at pace?”
Smaller digitally-native consultancies, especially those with a tech-focus, are agile, acclimatised to the current disruptive climate and driven by data. They will move to implement rapidly, deploying a fast fail/learn approach rather than a more conventional much slower “waterfall” approach where implementation follows strategy. This equates to low-cost experimentation that can be ratcheted up quickly depending on success. Moreover, with half of companies now applying agile practices to drive forward change and transformation, those who do not will fast be left behind.
4. Scrutinise who’s doing the work
Consultants sell time, with partners billing the most and entry-level analysts the least. The flaw at the heart of this system is that clients can end up paying partner prices when the work is actually being done by junior executives.
Clients should insist that pitch teams feature all the people who will be carrying out the project in question, so they have a chance to get a feel for the full range of competencies behind any given agency. This is all about looking beyond the gilded entrance hall unveiled at pitch, for a behind-scenes peek at what lies within. Technologists, engineers, designers – the full roster of the back-end team – should be available to answer questions at pitch, to ensure that the proposed solutions your consultant comes up with really can be designed and built as promised.
5. Look under the bonnet of a consultant’s tech stack
When clients hire a big consultancy, they also often inherit the consultant’s preferred tech or software supplier as part of the deal. This can result in clients being locked into technology that might be fit for purpose but isn’t tailored to their specific needs. Running a modern digital business involves a continuous process of upgrades and iterations in order to stay ahead of consumer demand. Nowadays the tech stack required to host and run a digital business is increasingly sophisticated and cheap to build, while at the design layer, design systems and tools seamlessly de-risk the process of moving ideas and projects from the whiteboard, to design to code.
Clients should rigorously query consultants’ approach to tech and software suppliers, insisting wherever possible on a vendor-neutral approach which prioritises client needs over a consultant’s pre-existing relationships. Consultancy offers the opportunity to switch up outdated tech (a staggering 90% of businesses are held back by reliance on legacy applications, according to one study from Computer Weekly); but only if the consultant in question is operating free from pre-existing loyalties.
Looking ahead: a new era of challenge
In order to avoid the growing risk of consultancy land and expand,clients need to learn how to ask the hardest questions first. Going in tough with an interrogative, slow-burn approach when procuring takes time and it’s not the easiest route: but it will also save time and pain in the long-run.
Just as clients challenge their prospective consultants, however, they too should look to be challenged. Having “yes men” or women in your team is rarely good for business; all the more so when they’re an outside force expected to shake things up.
As we enter a new digital age where the challenges to business – including rapid transformation, competitive globalisation and increased regulatory scrutiny – are greater than ever, decision-makers need to become more robust. The best way they can do this is by arming themselves with a deeply curious and investigative approach to all areas of new business development. Within this quest, having the right consultant by your side can be not only helpful but key.
About the Author
Leon Gauhman is co-founder and CPO/CSO of Elsewhen, a digital product consultancy that works with some of the world’s best-known companies – including Google, Mastercard, Spotify and Microsoft – to develop standout B2B design and technology solutions. A firm believer in entrepreneurship, Leon also mentors startups including Seedcamp and Wayra.