On March 7, 2023, a significant book titled “The Big Con: How the Consulting Industry Weakens Our Businesses, Infantilizes Our Governments, and Warps Our Economies” is set to be published. This work is by renowned British academic Mariana Mazzucato and Rosie Collington, a fellow at University College London, and it will be released by Penguin Publishing. The book examines the role of Western private consulting firms, the issues associated with this role, and how to address these problems. Various reviews of the book have emerged, including one from Bloomberg by Adrian Wooldridge, titled “McKinsey’s Missteps Point to an Industry-Wide Mess,” published on January 24, 2023. Other notable reviews include Diane Coyle’s piece in the Financial Times, “The Big Con: The Case Against Consultancies,” released on February 15, 2023, and John Arlidge’s review in The Times, “The Big Con Review: Time to Cut Out the Consultants,” published on February 19, 2023.
Significant Expansion
The book reveals that the role of Western private consulting firms has notably expanded over the past four decades, particularly due to their increased ability to attract clients and their transformation into one of the world’s most successful industries. Some of the primary reasons for this expansion include:
Government Support for Consulting Firms: The influence of consulting firms has been particularly pronounced since the 1980s and 1990s, especially in the UK. Under the conservative government of Margaret Thatcher (1979-1990), many government activities began to be outsourced to the private sector, alongside the privatization of public companies. This trend continued under the Labour government led by Tony Blair, who adopted a Third Way approach in the late 1990s and early 2000s. Consulting firms benefited from reforms introduced by both the new liberal right and advocates of the Third Way, thriving amidst modern capitalism’s challenges, including financing, privatization, and climate crises.
Unique Client Attraction Abilities: Another factor contributing to the emergence and expansion of these major firms is their unique ability to attract clients through exclusive contracts and extensive networks. Acting as advisors, legislators, and external contractors, they portray themselves as objective sources of expertise, leveraging their extensive knowledge and resources. Their hiring of graduates from top universities worldwide has helped companies like McKinsey & Company and Boston Consulting Group secure many leading governments and businesses as clients.
Consulting as a Profitable Industry: As the role of consulting firms has expanded significantly, management consulting has become one of the most lucrative industries globally. Market estimates for the industry size ranged between $700 billion (approximately £425 billion) and over $900 billion (approximately £674 billion) in 2021. Notably, one IT consulting firm, Accenture, ranked as the 57th most valuable company, surpassing familiar giants such as Comcast, Wells Fargo, Verizon, and United Parcel Service.
Professional Dependency
Despite the significant expansion and rising market shares of Western consulting firms, the authors of the book challenge the notion that consulting always adds value to the economy. They highlight several associated problems, including:
Political Accountability Erosion Due to Responsibility Confusion: The authors argue that reliance on firms like McKinsey, Boston Consulting Group, Bain & Company, PwC, Deloitte, KPMG, and EY hinders innovation and disperses accountability for decisions made, complicating political responsibility. This over-reliance leads to ambiguity over who is accountable for decisions—whether it is the firm providing technical advice or the entity implementing the recommendations. The book notes that whereas management consulting used to involve partnerships with self-imposed obligations for any losses incurred, recent years have seen partnerships that offer limited liability for consulting firms.
Exploitation Through Costly Consultations: The book discusses the deceptive trust exercised by the consulting industry through its contracts with governments that avoid taking responsibility for their decisions. As a result, these governments become overly dependent on consulting firms that inflate their market values at the expense of responsible governance. The firms exploit partners’ illusions and fears related to decision-making by pretending to empower clients and help them achieve more with fewer resources. Initially, consulting firms may provide enticing and cost-effective deals, only to later exploit partners with expensive consultations, leading some into a cycle of deception.
Growing Client Dependence on Consulting Firms: The authors contend that the ideal consulting engagement, from the perspective of consultants, is one that leaves clients perpetually dependent on their services. This dependency diminishes clients’ capabilities and relegates civil service employees to the status of “irresponsible children,” continually seeking external help from consulting firms that look for more ideas and advice, often addressing problems they may have previously created, rather than working on transferring knowledge to clients.
Public Institutions Lacking Qualified Human Resources: According to the book, while consulting firms can attract top talent, this often diverts the best graduates away from public service roles, negatively impacting public administration.
Value Contradictions in Consulting Firms’ Operations: The book also notes the pronounced cognitive dissonance within the operations of Western consulting firms. These firms have previously adopted slogans from DEI (Diversity, Equity, and Inclusion) and ESG (Environmental, Social, and Governance) while simultaneously working with some of the world’s largest mining and fossil fuel companies and the most corrupt governments.
Emergence of Ethical and Professional Scandals in Consulting Firms: The book further highlights that these firms have faced numerous scandals in recent years, both ethical and professional. For instance, McKinsey transformed Enron Corp., a once-obscure oil and gas firm in Houston, into a testing ground for its ideas before the company collapsed in bankruptcy. Moreover, McKinsey provided advice to Johnson & Johnson and Purdue Pharma on how to increase sales of their new opioid products.
Knowledge Transfer
The authors emphasize the necessity of enhancing civil service capabilities and rebuilding internal government capacities while improving contracting processes with consulting firms and evaluating the outcomes of outsourcing. This can be achieved through several means:
Recognizing the Value of Public Service: The book stresses the importance of limiting reliance on consulting firms, ensuring this does not undermine public administration’s role or its inherent value. A global management survey over the past two decades has shown that adopting “best practices” in management can enhance productivity and satisfaction in both public and private sectors. Therefore, there is no compelling reason to convert clients into entirely dependent entities lacking discernment and reliant on consulting support.
Enhancing the Contracting Process with Consulting Firms: The authors argue that, while rebuilding capacities in the public sector is crucial, it is equally essential to allocate more time and resources for expanding hiring and rebuilding skills and knowledge. This can occur in parallel with improving contracting processes with consulting firms, emphasizing result evaluation and requiring consultants to disclose any conflicts of interest when bidding for public sector projects. Furthermore, it is vital to select partnerships based on various ethical considerations, including a refusal to work with oppressive regimes.
In conclusion, the authors underscore the need to focus on knowledge transfer, as ultimate success hinges on the client’s ability to learn alongside the consultant’s ability to teach. Marvin Bower, the man who transformed McKinsey into a global powerhouse, famously argued that it is never worth sacrificing integrity for money; integrity will ultimately be the only reliable asset for sustaining operations. This advice should be taken seriously by consulting firms if they wish to continue making an impact in the years ahead.
Sources
Mazzucato, Mariana and Collington, Rosie. The Big Con: How the Consulting Industry Weakens our Businesses, Infantilizes our Governments and Warps our Economies. London: Penguin Press, 2023.
Wooldridge, Adrian. “McKinsey’s Missteps Point to an Industry-Wide Mess.” Bloomberg, January 24, 2023. Available at: Bloomberg Article
Coyle, Diane. “The Big Con — the case against consultancies.” The Financial Times, February 15, 2023. Available at: Financial Times Article
Arlidge, John. “The Big Con review — time to cut out the consultants.” THE TIMES, February 19, 2023. Available at: The Times Article
