Is the big con itself a big con?
Perhaps this a childish question to ask about the book The Big Con by Mariana Mazzucato and Rosie Collington, but after reading it I couldn’t resist asking myself this question. What is the answer? It depends. If you expect an objective, academically validated study about the role of consultants in government than this book does not pass the bar. If you are looking for a pamphlet to kickstart a discussion about the role of consultants than you may find this book helpful. However, I have five objections to this book.
First, the book suffers from confirmation and sample bias: it only presents those facts that confirm its main thesis and disregards any counterfactuals. All examples in the book show consultants in a negative light. Not a single positive example is presented. This creates the impression the problem is widespread. But is that true? The book lists dozens of examples many of them going back ten years or more. Over that time period hundreds of thousands of consulting assignments must have been executed. So the sample presented by the authors is very, very small and biased. In fact, too small and biased to draw conclusions from. Moreover, the authors use a very broad definition of consulting. Even though the consulting sector has crossed boundaries with outsourcing, it is hard to see Sodexo that runs cafeterias as belonging to the same category as PwC or McKinsey. By casting the net so wide, the impression is created that the problem with consultants mismanaging things is very substantial. But in reality apples are compared to pears in this book.
To be fair, Mazzucato and Collington’s work is hindered by the fact that very few if any academic studies have been done into the effectiveness of consultancy projects. For as far as they do exist however, they do not suggest such a picture of complete failure. Rather there is a spread from successful to unsuccessful (see Bronnenmayer et al., 2016a, 2016b for an overview of the very scarce literature). More popular literature also does not paint an overall bleak picture (Forbes, 2015 shows high client satisfaction rates in companies; no data on the public sector is presented). The true answer to the question whether consultants have a positive or a negative effect is simply: we don’t know. The danger of basing far reaching conclusions on a limited number of cases is high. Of course we cannot deny that consulting projects may go wrong and sometimes spectacularly so (the greatest scandal of recent years, McKinsey’s role in the opioid crisis, falls outside the scope of the book because it focuses on the public sector only). When they do so, it is a good practice to research why. However whether the problem is as structural and pervasive as the authors claim is highly uncertain and not proven by this book. To base conclusions based on something we don’t know seems premature.
Second, the theoretical scheme behind the book is very simple if not simplistic. The basic thesis is that neoliberalism and new public management led governments to outsource an increasing number of activities, causing governments to become infantilized and transferring power to consultancies. Again the empirical evidence for this statement is thin, but more importantly, the book does not explore alternative explanations for the increased use of consultancies. It is a good academic tradition to do so. Such explanations may lie in the increased complexity of society that may be such that it is impossible for any organization to know and do everything. Or it may lie in mission creep of government, that now is regulating many parts of our lives and society. Or it may lie in civilians’ expectations that the government should solve more problems than in the past. Or it may lie in labor shortages in certain areas. Or the media’s role in turning every mistake into a scandal may lead governments to hire consultants to legitimize their actions. Or… All of these may play a role next to or instead of neoliberalism or new public management. Unfortunately an analysis of these alternative explanations is absent from this book. The authors seem to have locked into the neoliberal thesis and tunnel vision did the rest. The book would have been much stronger if it had refuted the alternative explanations.
Third, for the claim that governments have been infantilized the authors do not provide much evidence. True, some governments make pretty daft decisions. The Australian government set the world record recently by hiring a consultant to advise about how to hire consultants. Yet, despite many years of increased use of consultants, in my work with Dutch governmental institutions I have experienced that few civil servants are ‘infantilized’. In fact, there are quite a few that know what they are talking about. And when I ask them questions, coherent sentences come out. What is the evidence for the statement the government has become infantilized? And even if that were true, are consultancies to blame?
Fourth, my thesis that this book is more a pamphlet is supported by the use of language and insinuations. Just some examples: ‘little is known. about the nature of advice…provided to banks in the run-up to the financial crisis – though had they offered the kind that might have prevented the crisis, it would be surprising they haven’t publicized that.’ (p. 89). The authors may be right, but if ‘little is known’ than this is just speculation. And many consultancies still adhere to a policy of client confidentiality which leads them to be reticent with communicating about clients. With regard to consulting in the area of sustainability, p. 213 states: ‘The consulting industry is riding a new wave: one that rolls over dying coral reefs and the shores of disappearing islands’. Very nice writing, but no evidence. On p. 108-111 there is a lengthy section about the robber barons from around 1900. Why this is in the book is not clear, unless it is a rhetorical device of guilty by association. It is not difficult to find more examples or rhetoric posing as arguments. All this supports the idea that the authors have set out to prove one point only, regardless of the facts: the more consultants, the dumber government.
Finally, the book raises the question whether it meets the academic test of external validity: many examples in the book come from the UK or USA. How are things in other countries? The role of consultants and even the way consultancies work internally differs substantially across countries. In addition the political systems in the UK and USA are quite different with single party majority governments versus coalition governments in many European countries. In those latter countries the policy shifts are never as extreme as in the UK and USA. What does that mean for the central thesis of the book? Does it apply in other countries as well?
All my objections do not mean there is no problem at all. My objections do mean that this book does not show whether there is a problem and if so what the causes are. From personal observation as a part time consultant I am sometimes amazed by the amount of consultants working in organizations, both public and private. Sometimes I also wondered what quality these consultants were delivering. From some research I did a couple of years ago in the Netherlands into over 100 consulting projects, I also learned that consultancies that work exclusively for the public sector, use less sophisticated business models than those working for the private sector. Why? Is it the same in other countries? Was this just due to my specific sample? Anyway: my feeling (not fact!) is that is good to discuss how governments use consultants (in fact I have said so in a 2016 interview in a Dutch newspaper). But we need to do so based on facts and reason not based on preconceived notions and a limited understanding of the facts.
As to the recommendations in the book: with so little empirical evidence and sound reasoning, any recommendation about how to deal with consultants seems premature. This book does not provide a solid basis for policy. Nevertheless some of the ideas presented are good practice no matter what. Focusing on learning from consultants rather that leaving everything up to the consultant is a good practice under any circumstance. Creating capability in the government by investing in internal consultancy departments is a good idea as well, at it is for any other organization. In fact, I have worked with excellent consultants inside the Dutch government in the past and found that very useful.
This book is a pamphlet that aims to set an agenda; it is not an objective analysis. If this book is able to start up a debate in which the truth comes out that will be a contribution to society. If however we accept this book as the truth, society may suffer. Neither the empirical evidence, nor the theory behind it meet basic requirements.
As any good consultant can tell you: without a sound diagnosis any proposal for change is premature.
Bronnenmayer, M., Wirtz, B. W., & Göttel, V. (2016a). Determinants of perceived success in management consulting: An empirical investigation from the consultant perspective. Management Research Review, 39(6), 706-738.
Bronnenmayer, M., Wirtz, B. W., & Göttel, V. (2016b). Success factors of management consulting. Review of Managerial Science, 10, 1-34.
Forbes, 2015, Many Companies Fail to Realize Optimum Value in Consulting Projects, Says New Study, February 25th.