27 April 2010

Time to sell results,

The downturn in public spending means management consultants will have to focus their service on delivering results instead of just advice, says Keith Coleman

Many in central and local government are predicting a comeuppance for the affluent tribe of consultants – a fate said by some to be long overdue.

I have to say that as far as the classic model of consulting goes, I agree with them. And that’s despite having spent much of my career in public sector consultancy. What is this classic model? First, just like law firms, it worked on the clock. Clients paid for the number of days or hours worked by consultants, with plenty of clarity about the input and how much they paid for it. And, given that the people are highly qualified it is not cheap.

Second, where there is output, it will – at its best – be a comprehensive report, well written, well researched, with well-argued conclusions and recommendations, as well as an impressive presentation, illustrated with some great slides. The more brilliant consultants would have also thought about the organisational and emotional obstacles to implementation, and have designed in some process to discuss how they could be cleared away.

But will the client benefit as a result? Are the conclusions sound? Will the recommendations work? Will the client save money as promised? Will the client’s customers – taxpayers, benefit claimants, NHS patients, schoolchildren etc – get a better service as predicted?

The answers to these questions are usually very much less clear. The consultants have pocketed their fees, and given their advice, but now, at the crucial point of making that advice work in reality, the client is on his or her own.

They might succeed, but the record shows they might also fail.

The consultant has had plenty of power and lots of freedom in formulating their advice, but when it comes to responsibility, that rests firmly on the client’s shoulders.

So, it is no surprise to see the public sector questioning the value of traditional consulting, where it is notoriously difficult to prove the link between the fee paid and the benefits gained.

But does it have to be like that? No, because new models of consulting are beginning to emerge, and prove their value. Models in which the consultants are paid by the results the client attains by following the advice given. Models where consultants get involved in making delivery happen, not just giving advice. And models where clients pay because their people are better skilled and their organisations more able to create results.

This is a radical shift from traditional practice, taking the focus off the input –timesheets and number of person-days – and switching it to the output... the quantified benefits and improvements delivered to the client and the client’s customers. Let’s get down to specifics with a few examples from my own casebook. We recently worked with a client on getting single mothers back into employment. The client’s efforts had met with little success when they called us in. We started by putting ourselves alongside the council’s frontline staff, talking to the women concerned singly, and in focus groups.
v And, as a result, several workable new ideas emerged, of which I will quote one. We shifted the focus from one-on-one counselling to small groups of six to 12 women attending sessions as a group. The results were dramatic.

First, ideas flowed freely from the group to address each individual’s issues. Second, a sense of obligation to the group quickly took hold with each individual. The result – for which we got paid – was a significant increase in return-to-employment.

In a growing number of engagements, the focus of consulting has shifted from advice to delivery. There are two benefits to this change – first, it is only when delivery has changed in line with the advice received, and been proven effective, that the consultants receive their rewards. And second, the quality of advice and strategic insight improves with delivery experience. The strategy is no longer abstract and the implementation process is tested.

That is the new future of consulting. But does it have a future? I am certain it does, and for two reasons.

No organisation in today’s complex world has all the skills under its own roof to do ‘everything’ with maximum efficiency. After all, that’s why advertising agencies and universities exist.

Specialist skills will be needed and sometimes – for example, for the delivery of a major new policy – for a finite period only.

The external expert will always be needed, especially when there is pressure – as currently – to focus on ‘core business’, and farm out everything else.

Second, the UK public sector doesn’t exist in isolation. Ideas and innovations which it can put to good use are likely to come from elsewhere – supermarkets, oil companies, utilities, and other countries. And spreading innovation from sector to sector is something that consultants are uniquely qualified to do.

That is why, despite much speculation to the contrary, I predict scope for professional service firms such as mine to provide support to the public sector. But I also anticipate the demise of the ‘classic’ consultancy, with its focus on inputs and advice, to a new model based on delivery, proven value-for-money, and results.

Keith Coleman is global head of public sector at Capgemini Consulting
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