6 Reasons Why Companies Spend Millions to Hire Management Consultants
Consultants can have a negative reputation - charging $2 million for 12 weeks work that results in stacks of PowerPoint slides, all of which are archived into a dusty closet (digital or otherwise) soon after McKBain Group leaves the premises.
Below, Ill paint a positive (and more realistic) view on the 6 reasons why companies hire business consultants. After reading, you will have a better view on management consulting as a future career.
1) Staff augmentation - the least value-added role that consultants offer. Companies often have short-term staffing needs (in the case of government work, this can extend for several years) due to a variety of factors (eg. company downsizing's, unplanned growth). While expensive, it can be commonplace for operational consulting firms (eg. Deloitte) and, to a lesser extent, public sector consulting firms (eg. Booz)
2) External change force aka political cover. It can be hard for companies to do whats right (sacred cows and all that jazz) " especially when it comes to job layoffs, reductions in benefits, major operational shifts. Hiring management consultants can be a way to reach the desired conclusions with political cover in case key parties are unhappy (eg. disgruntled employees or a displeased Board) or things go awry (Despite the major cost increase, we implemented Mercers recommendations " there's little that what we could have done better)
3) Best practices across functions and sectors - consultants have the experience of:
a) Serving different clients in the same sector (eg. Consumer Goods, Semiconductors) b) Serving different clients facing similar problems in different industries (eg. Eastern European expansion, Central Asia outsourcing)
This allows them a sort of pattern recognition for effective solutions, applying lessons learned in applicable situations.
4) Analytical manpower
A corollary to staff augmentation, companies often require help to address problems where their knowledge and skillsets are lacking. Consultants can be of great value given their training - a big reason why consulting jobs are hard to find!
5) Fresh perspective
Companies often need an outside viewpoint - you'd be amazed at the amount of value business consultants can add based on the most commonplace observations. Critics contend that this is evidence of consultants selling common sense, but for front-line workers up to senior executives, it can be easy to fall into daily routines without casting a sharp eye towards self-criticism and improvement.
6) Skill set augmentation and training
Management Consulting Firm