‘Other consultants charge too much’ says consultant
A new press release has prompted Kipp to ask: Do we even need management consultants at all? You already know the answer.
September 27, 2010 4:39 by Sam Potter
Writing in the Independent recently, Johann Hari called management consultancy one of the greatest scams of recent years, and the only one to have survived the crisis unscathed. He cites research indicating their lack of effectiveness: “The Cranfield School of Management studied 170 companies who had used management consultants, and it discovered just 36 per cent of them were happy with the outcome – while two thirds judged them to be useless or harmful.” Hari points out that “A medicine with that failure-rate would be taken off the shelves.”
Hari argues there is a growing body of evidence that strategies pushed by consultants are in fact often harmful, largely because they almost always advocate layoffs, and studies have suggested that many layoffs can do more harm than good.
“The OECD has studied developed economies over a 20-year period, and it found labour productivity growth was much higher in the countries where it is hardest to fire people. The better you treat a workforce, the better they work. Professor Peter Cappelli studied 122 companies and found that lay-offs most often shrank their future profitability, instead of swelling it.”
Yet management consultancies almost always advocate layoffs. Another former management consultant, David Craig, who wrote a memoir of his own, said his company always took the attitude that a business must be POPed – People Off Payroll.
If Stewart, Hari, Craig and co are right it could be that, rather than simply saving three quarters of their outlay by using the services of a local management consultant instead of an international one, local companies would do better saving 100 percent of the outlay by ditching them altogether.
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