Is Management Consulting a Fraud?

Is management consultancy a swindle? So claims ex-consultant Matthew Stewart, whose book The Management Myth is apparently a stinging indictment of MBAs, management gurus, B-Schools and consultancies.

Check some of the thoughts and experiences here:

 Within a few months of the interview in New York, I was suited up and billed out at a rate of about a third of a million pounds per year (only a fraction of which landed in my pocket in those first years). I soon discovered that my lack of a proper business education was no disadvantage on the job, which turned out to be more interesting and enlightening than I expected. I would eventually leave the business in 1999 to work full-time as a writer, but during the previous decade, I would advise French businessmen on how to succeed in Germany; tell Americans what to do in Eastern Europe; show the Spanish how to become more like the Americans.

I eventually came to understand that it is possible to construct a Whale chart for just about any business anywhere. It makes no difference whether the business is inherently good or bad, well-managed or in the hands of chimpanzees.

In its best moments, management consulting is a recognition of the quantitative nature of our reality – of the fact, too easily overlooked by innumerate arts graduates, that a hard look at the numbers can explain much of the structure of the world around us.

Among human beings, it turns out, the perception of expertise, however unfounded, can sometimes be used to good purpose. As the shamans who poison chickens and the soothsayers who read entrails have long demonstrated, sometimes it is more important to build a consensus around a good decision than to make the best possible decision; sometimes it is more useful to believe that a decision is sanctioned by a higher authority than to acknowledge that it rests on mere conjecture; and sometimes it is better to make a truly random choice than to continue to follow the predictable inclinations of one’s established prejudices. Consultants, following in the footsteps of their pagan forebears, understand that they must adopt the holy mien of a priestly caste. 

The most important of the all-too-human functions of shaman-consultants is to sanctify and communicate opinion. Like ministers of information, consultants condense the message, smooth out the dissonances, unify the rhetoric, and then repeat and amplify it ad nauseam through the client’s rank and file.

When you put forward the fiction that management is an exercise in calculus, you tend to assume that integrity is a cost of doing business rather than its foundation. When you stipulate that management is the province of experts, you lose sight of the fact that organising fruitful co-operation among human beings is principally a matter of building trust. And you forget the most elemental truth of political philosophy, that in any system that does not have the features of transparency and accountability, no one trusts anyone. 

Seems like one of those books that are in the lines of Consulting Demons and Dangerous Company. And also Mintzberg’s book, Managers Not MBAs.

I personally agree that management is a craft not a science. It is context dependent and unlike an MBBS/MD/CA/CFA does not involve “knowing stuff” and doing it.

Link to original post

Leave a Reply