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Beyond the Conference Room Solution

January 30, 2013

Let's Go Fishing

The oft-quoted Chinese proverb – “Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime” – provides an interesting perspective on the modern management consulting industry.  I was shocked to learn that in one year, AT&T spent more money on management consulting services than it did on research and development!

AT&T is not alone. Last year, worldwide consulting revenues were up 3% over the previous year, yielding a market size of just under $150 billion. Despite the size, growth and influence of management consulting firms, precious little has been written about the true empirical value they provide.  Management consultants are often criticized for overuse of buzzwords, reliance on management fads and a failure to develop thoughtful recommendations that can be easily implemented. Many argue that there is even an inherent mismatch between management consulting advice and the ability of business executives to actually execute the suggested change. 

With the economy in a downturn, clients are becoming more prescriptive about defining the relationship they seek with a management consulting firm. Specifically, clients are asking for:

  1. A clear view of what consultants do and the value they provide.
  2. Confidence that consultants will not try to sell them services they don’t really need.
  3. Clearly defined objectives.
  4. Professionalism and trust.
  5. A resolution of the conflict that consultants’ primary motivation is to sell consulting services rather than to act in the client’s best interest.
  6. Greater specialization and deep knowledge of a specific topic when little or none exists within their organization.
  7. The ability to shift payment over a few years to better match the timing of the benefit with the fixed payment.
  8. The ability to integrate the project recommendations back into the organization.

The inherent disconnect is that most senior consultants simply love solving big, complex hairy problems.  Since consultants are often less interested in implementation than they are in ideation, clients often have difficulty translating the projected returns promised in the PowerPoint decks into their organization.  Management consultancies are stuck with huge infrastructure, economic models that require a high degree of leverage for their senior partners, and traditional problem solving approaches.  In essence, there has been scant innovation ever applied to the delivery of management consulting services.

As such, most consultancies are unable to deliver the value proposition their clients now seek. What is remarkable is that while consultants rant about the rapid pace of change in U.S. business, the management consulting model remains stuck in the 1930s. Returning to our fishing analogy, modern consulting firms should be teachers, not doers. Back in the 1930s, clients companies simply did not have the trained resources to support major change initiatives. Consultants were the only ones that could provide the analytic competence, engineering talent, and accounting expertise required to add insight and value to the client. Today, that hat is simply no longer the case. Companies are stocked with talented resources at all levels. But many are simply going about their 9 to 5 jobs, never given the opportunity to generate the insights they clearly possess. 

So what role should management consultants play?  I suggest that clients would benefit greatly by having management consultants act as teachers rather than sages.  My experience suggests that when client employees are provided with alternative mental models for their consideration, intuitive approaches to problem solving, and innovative mechanisms for implementation, the results can be staggering.  The knowledge employees possess of “the way things really work in an organization” coupled with an effective mechanism for change leads to empowerment, excitement, and rapid results.

I suggest that the consulting profession deliver on a new value proposition built on the following cornerstones:

  1. Generate powerful insights by leveraging knowledge present within client personnel, not through recent business school graduates.
  2. Provide clients with embedded capabilities, not white papers.
  3. Deliver pragmatically achievable solutions rather than intellectually correct but practically bankrupt ideas.
  4. Begin true partnering between consultants and clients where fees are remitted from results generated, not from promises made.
  5. Fixed fee payment schedules whereby the consultant is motivated to always act in the client’s best interest, rather than look to market the “next big project.”

A final message to management consultants: put down your mysterious black boxes and grab some fishing poles. You and your clients will be the better for it.

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"When I have fully decided that a result is worth getting I go ahead of it and make trial after trial until it comes." - Thomas A. Edison

Let’s start with an explanation of the title, Beyond The Conference Room Solution. In all of my workshops and in many of my lectures, I refer to the phrase, The Conference Room Solution as a far too common approach used by organizations use to solve many of their most challenging issues.

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