How The Big Con Might End

If you work in the consulting industry, reading The Big Con. is going to be a bit of a toe-curler. It’s a meticulously researched Mariana Mazzucato and Rosie Collington and lays bare the cynical deception practised by consultancy and outsourcing firms. Now, before I’m accused of betrayal and whistleblowing - I was a management consultant in several boutique firms for 25 years - I should add that although the Big Con does highlight how many elite consulting firms have extracted ‘economic rents’ from their clients - often with no tangible benefits - it’s not always the case. Indeed, some consulting firms have been responsible for some noteworthy innovations and progressive thinking. In 2015, McKinsey published a report titled "Women Matter: Time to Accelerate," which highlighted the benefits of having more women in leadership positions, a topic that continues to show tangible outcomes. My own alma mater Merchants practically invented the first telephone bank and handed over the reins to the client at a point they could excuse to the same standards as their consultancy partner. Over 50 years ago a UK firm Hoskyns Group (part of Capgemini) developed and executed the concept of IT outsourcing that delivered scalable multi-million-dollar benefits to their public and private sector clients at a time when computing power cost as much as the GDP of a developing nation.

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The book pulls into sharp focus some horror stories that reveal a sustained regime of deception and moral ambivalence, allowing obvious and in-plain-sight conflicts of interest, where advice is offered on topics such as tax, climate change and social responsibility. And it’s fair to say, clients quite often don’t do themselves any favours when it comes to the brief. McKinsey’s $6m contract with the Australian government, intended to help reach net zero carbon emissions by 2050 is a good example. In spite of detailed calculations and analysis, their base assumptions were proved to be flawed and the potential for achieving net zero in the timeframe was totally unrealistic. To say the consulting industry - worth over $900bn annually - has a credibility problem is all too obvious. But even when firms seek to address this inequity the partners often fail to agree. One Big Four firm recently pulled out of a well-publicised split of its auditing and consulting business for this very reason.

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It’s not entirely the fault of the consulting firms. Far from it. The book points out the lack of responsibility taken by senior management in client organisations. And an inability to construct contracts that hold consultants to account for lasting outcomes and benefits. The new wave of climate change engagements for consulting forms is all too easy: the outcomes anticipated from their plans are often 25-30 years ahead, and the authors of the reports are never held to account. Yet their clients, as Mazzucato and Collington point out are more than happy to be paid millions of dollars with little or no commitment or mandate for action.

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The authors conclude by providing four ideas for resolving what they describe as a confidence trick that hollows out public and private sector organisations, all of which adopt a more collaborative and shared risk approach to consulting models.

So, what’s this got to do with Chat GPT or AI? Here’s why. The raw material for elite consulting firms is bright graduates seeking a fast-track career to high incomes and senior executive roles in their employer or their clients. Their life for the first three or so years is exhausting: long hours, travel away from home and a treadmill of corporate arse-licking. The output of their unending research and discovery work is mountains of PowerPoint slide decks and brochureware. All this can now be done for the most part by AI and Chat GPT-type products. Put simply, consulting is the next meal for Chat GPT and its competitors. Unless consulting firms can repackage their tenuous value propositions, and address their ever-growing credibility issues, things look bleak.