If we know that big 4 consulting firms have screwed numerous times why govt and multi-million/ multi-billion industry firms keep hiring them? What exact value do they add?
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I was attending a mandatory seminar put forward my organization for LEAN modelling for process improvement. Being worked in middle level management, I was sure there is nothing wrong with processes. Still McKinsey &Co consultant was hired and honestly this person had no idea what he was talking about. He took four sessions but it hardly made any sense to anyone in my company. I have read numerous articles and 80% folks say they don't know or didn't know why they hired consulting firm. Why then people keep doing it ?
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Answer:
I worked at Bain & Co for three years. Here's what I said in my recent blarticle, https://medium.com/p/ac31c8b3b245: I think consultants provide three key benefits: 1) Unique insights based on experience dealing with similar problems in different contextsâconsultants bring the experience of other companies, in other industries, markets, sizes, etc., to bear. And, as anyone who has taken a writing class knows, a fresh set of eyes always catches mistakes. 2) An open, honest perspective about the state of your businessâconsultants have no incentive to not be upfront when the business sucks. In fact, consultants are often hired to tell senior management the hard news that they donât want to hear from the ground floor 3) Telling you the time in a way that youâll listenâlet me first start by saying, stealing someone elseâs watch is not an option, nor is building you a new one. Neither of those are helpful (or legal). Yes, consultants take your 100GB database files and regurgitate them back at you. The difference is that they do it in a visually-compelling, action-oriented way so that youâll actually listen and then use those insights to make better decisions. So, is that valuable? Well one can still argue and say, no. But a good number of corporations believe yes and so do I.
James Dong at Quora Visit the source
Other answers
I used to be a management consultant. It boils down to two things: 1. Higher quality "workers" Many companies and the government can't attract top talent, nor have the time to recruit for a particular project or initiative. Even though the math doesn't work out in terms of a consultant's per hour cost vs the salary of an employee, consultants give companies a guaranteed level of talent, and the ability to "fire" as soon as the project/work is done, unlike what would happen if they tried to hire someone. 2. Scapegoat Senior execs use consultants as a safety for their big initiatives. If a project fails, they can tell their bosses the consultants screwed up. If things aren't going well mid-project, might as well switch firms to show that the senior seed is trying to get things back on track. These two reasons will never change, unless senior execs make an effort to recruit/breed the talent they actually want, and take responsibility for their failures. Consultants will always be needed and utilized.
Aneesh Devi
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