Magazine article Management Today

Strategists Wrong-Footed

Magazine article Management Today

Strategists Wrong-Footed

Article excerpt

There's a hoary old joke about strategy consultants which contains more than a grain of truth. All the strategy consultant does, so it's said, is circle the client three times and drop a report on him -- following that up with a fat bill, of course. This avian technique has served the best-known consulting firms well over many years. But times are changing. Despite the current enthusiasm for 'business process reengineering', 'overhead value analysis' and the like, there are signs that the strategy consultants' market is itself changing in ways which make it difficult for the big firms -- the McKinseys, Boston Consulting Groups, Bains and others -- to keep pace.

'Because today's markets are so fast-moving, competitive strategy often needs to be adapted on a rolling basis. Many companies are therefore taking strategic analysis and interpretation in-house,' says Michael Stiles, a former senior man with PA Consulting Group who set up his own practice four years ago. 'Clients want to solve problems for themselves,' agrees independent consultant Magnus Spence, who recently published a study of the UK consulting industry.

Many would argue that formulating strategy has always been the prime responsibility of management, not of consultants. 'Too often consultants are allowed to state the problem for which they will supply their solution, rather than offer a solution to a problem defined by the client,' maintains Sir Owen Green. In more than a quarter of a century at the head of BTR, Green employed consultants only for straightforward technical problems, like plant lay-outs, to which they could bring specialist knowledge.

Not all senior managers are disdainful of the help that consultants offer at a strategic level. At the building materials group Redland, says its corporate planning director Kevin Connolly, 'we try to do more things in-house'. Nevertheless Redland has used strategy consultants several times, notably on post-acquisition studies following the Steetley takeover of 1992. 'They are expensive and must be used carefully on projects of sufficient value,' Connolly accepts. But Redland has been happy with their work.

Any suggestion that the use of consultants implies an abdication on the part of management is far wide of the mark according to many who have worked on both sides of the fence. 'Sometimes you want an outsider's view, and sometimes it takes an outsider to liberate the insider's view,' says Nicholas Prettejohn, head of strategy at Lloyd's of London and a former partner in Bain & Co. …

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