Why 'Credible' Is Crucial: To Management Consultants

By Senior, Peter | New Zealand Management, March 2004 | Go to article overview

Why 'Credible' Is Crucial: To Management Consultants


Senior, Peter, New Zealand Management


We included an article in the Upfront section of the December issue of Management magazine asking: "What do you think of your consultant?" We invited readers to complete an online survey carried out with the Institute of Management Consultants of New Zealand (IMCNZ). The results, along with some conclusions, make interesting reading.

The successful or otherwise world of the management consultant hangs on a word: 'credibility'.

Buyers of the services offered by management consultants believe they (consultants) should have a professional qualification in management consulting, according to out jointly conducted re search. But currently most do not. What users want is a 'warrant of credibility', a WOC if you like.

To define the market we asked: what is a management consultant? Of the consultant respondents 65 percent said they provided consulting services on strategic and business planning, business process improvements and management of change; 43 percent included project management and a smaller percentage offered a range of human resource services.

On what academic or other qualifications a consultant should have, 65 percent of all respondents thought a graduate degree and a professional qualification were basic necessities.

A weighted average of respondents' answers suggests there are around 2000 management consultants offering their services in New Zealand. But the range of responses to the survey suggests a wide disparity in views of both the numbers of management consultants, and what distinguishes them from other management service providers. This disparity is exemplified by the answers to a question on fee levels. Nearly 90 percent of responses were spread fairly evenly through the range $750 to $3000 a day for short-term assignments, with significant reductions for longer-term assignments.

The concern, at least for IMCNZ is that 20 percent of management consultants consider their profession suffers from 'credibility' problems. On the other hand, 90 percent of them thought Enron and other recent miscreants had no or little effect on perceived credibility in New Zealand.

Perhaps the most telling responses were captured in 'key issue' comments such as:

* "Identification of professionals versus casuals and cowboys."

* "Just what is 'management consulting', vis-a-vis other contracted management services."

* "Telling clients what they want to hear rather than what they should hear."

* "Lack of professional standards."

* "Lack of credibility."

Real professions?

Internationally, management as a profession suffers from a lack of recognised standards, qualifications, regulations, complaints procedures and other formal aspects normal for the legal, engineering and accounting professions for example.

Legislation in Austria requires all management consultants to be members of the Austrian Institute of Management Consultants. With 2500 members from a total population of eight million, Austria offers a stark contrast to New Zealand.

A profession, according to the Collins English Dictionary, is "an occupation requiring special training in the liberal arts or sciences, esp. one of the three learned professions, law, theology or medicine". Herein perhaps, sits a useful clue to understanding the management consultant's problem.

The key word is 'requiring'. Apart from exceptions such as Austria, there is no requirement by providers or users of management consulting, let alone legislation, that management consultants should have specific qualifications.

There were only two significant management consulting firms in New Zealand in 1983--WDScott and PA Management. WDScott was absorbed into what was then Deloitte Haskins and Sells as all the major chartered accounting firms developed management consulting practices. The 'Big 8' gradually reduced to the current 'Big 4'--Deloitte, PriceWaterhouseCoopers, KPMG and Ernst & Young--and competed with international specialised practices such as McKinsey and Boston Consulting. …

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