A whiff of snake oil?

One of my colleagues says that if you rearrange the letters of the word ‘consultant’ it spells ‘scapegoat’.

In Biblical times the scapegoat was a goat sent into the wilderness after the Jewish chief priest had symbolically laid the sins of the people upon it. Tough for the goat, but a useful function for the tribe, who could now get on with freshly purified lives. So too with management consultants who live in a world in which the client takes the credit and the consultant takes the blame.

The mud has once again been stirred up by an article in the Times newspaper on 15 October that questioned the vast sums of money spent by the government on contractors and consultants in projects to address the COVID pandemic in the UK.

The classic theme in these articles over the years (the first one probably complaining that the high priest had been mis-sold a goat) is that management consultants deploy the skills of snake oil salesmen, beguiling their clients into paying over the odds for sub-standard service. And sometimes this has been the case. In ‘Rate yourself as a client,’ published in Harvard Business Review back in 1977, Anthony Jay wrote:

‘There was a famous London management consultant in the 1950s whose craggy face, bushy eyebrows, deep perception and penetrating analysis were almost hypnotically irresistible to the boards of large corporations. But once the corporation was hooked he was never seen again. For the next 18 months the offices were overrun with hordes of fresh-faced business graduates completing their management education at the corporation’s expense.’

But the Times article had a fresh theme: perhaps the buyers and users of contractors and consultants needed to pull their socks up too!

The snake oil theory is frankly demeaning to those buyers and users; it implies that they are easily duped simpletons, which they are not. So what’s the problem?

Professional services are complex products; they have many degrees of freedom about them by contrast with, say, selecting an office cleaning contractor. Naturally a purchaser wants to reduce those degrees of freedom to manageable levels – a drive to commoditise the service being commissioned. But in doing this, there is the risk that potential value is being lost. The problem for the client is being able to assess that value – and the attendant price that is worth paying for it.

This is endorsed by our own research; a recent survey conducted by the Centre for Management Consulting Excellence shows that clients could get more value from their consultants simply by asking for it.

So, more than 40 years on from Anthony Jay’s article, the rating for clients is still low. And it will remain so until someone recognises that selecting and using consultants is not an innate skill; it must be taught and it must be learned. Excellent projects need excellent clients as well as excellent consultants, and this is a theme we will be returning to in 2021.

Calvert Markham