6 Reasons Why Companies Spend Millions to Hire Management Consultants

Consultants can have a negative reputation - chargingGoods, Semiconductors) b) Serving different clients
$2 million for 12 weeks work that results in stacks offacing similar problems in different industries (eg.
PowerPoint slides, all of which are archived into aEastern European expansion, Central Asia
dusty closet (digital or otherwise) soon after McKBainoutsourcing)
Group leaves the premises.This allows them a sort of pattern recognition for
Below, Ill paint a positive (and more realistic) view oneffective solutions, applying lessons learned in
the 6 reasons why companies hire businessapplicable situations.
consultants. After reading, you will have a better4) Analytical manpower
view on management consulting as a future career.A corollary to staff augmentation, companies often
1) Staff augmentation - the least value-added rolerequire help to address problems where their
that consultants offer. Companies often haveknowledge and skillsets are lacking. Consultants can
short-term staffing needs (in the case ofbe of great value given their training - a big reason
government work, this can extend for several years)why consulting jobs are hard to find!
due to a variety of factors (eg. company5) Fresh perspective
downsizing's, unplanned growth). While expensive, itCompanies often need an outside viewpoint - you'd
can be commonplace for operational consulting firmsbe amazed at the amount of value business
(eg. Deloitte) and, to a lesser extent, public sectorconsultants can add based on the most
consulting firms (eg. Booz)commonplace observations. Critics contend that this is
2) External change force aka political cover. It can beevidence of consultants selling common sense, but
hard for companies to do whats right (sacred cowsfor front-line workers up to senior executives, it can
and all that jazz) " especially when it comes to jobbe easy to fall into daily routines without casting a
layoffs, reductions in benefits, major operationalsharp eye towards self-criticism and improvement.
shifts. Hiring management consultants can be a way6) Skill set augmentation and training
to reach the desired conclusions with political cover inEvery consulting project - particularly the ones with
case key parties are unhappy (eg. disgruntledheavy client interaction - incorporates employee
employees or a displeased Board) or things go awrytraining as a central component. The best
(Despite the major cost increase, we implementedrecommendations are worthless if clients cant
Mercers recommendations " there's little that whatimplement and maintain suggested changes after
we could have done better)consulting teams leave. Thus, a central part of what
3) Best practices across functions and sectors -business consultants do is teach client employees the
consultants have the experience of:a) Servingnecessary skills, knowledge, and mindsets.
different clients in the same sector (eg. Consumer