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IMT 581: Case Study Analysis: Success and failure in change consulting

by on November 17, 2010

By Norah Abokhodair, Colin Anderson, and Emily Oxenford

So many MSIM students are interested in working as consultants – and we’ve seen that the topic of consultants have come up quite often in our class discussions. Some of our cohort have received job offers (congratulations!) to work at some of the firms as consultants, joining the ranks of several alumni. But how much do we really know about how consultants are working “out-there”? If you’ve attended an information session with any of the consulting firms (and most of us probably have at least once), you know that most of the “information” feels more like a marketing pitch than truly helpful data about what it is like to be a consultant. And if you start looking around for case studies about the experiences of companies with consultants, you are not going to find a lot of material to review.

 

Our case study was intended to be a bit of an exploration of this very thing – how are consultants working out there with companies, and what is really happening? Our first take was to explore whether or not there were very strong cases for “always use consultants” or “never use consultants”. This did not lead to any sound results, and we ended up focusing in on trying to find what is the best that can happen from using consultants, and what is the worst that can happen? As we researched, we found a wide range of opinions and anecdotal stories about the horror stories of consulting projects gone wrong. But the most startling thing that came from building these two cases – the worst of consulting and the best of consulting – is that there is very little hard and valid data out there that will back up these opinions. It is difficult to find studies, research, or data about the outcomes of consulting projects for people to examine. Of course this makes some sense – many projects deal with sensitive and private company data. But even the research that excludes the identifying information of clients does not necessarily give robust or detailed information. On the other side, consulting sites frame all their success stories so that it feels more like a marketing piece (which is it) than any definitive examination of why the project worked. This makes sense as well, but it can be frustrating to wade through the marketing for honest details. And forget about trying to find data on unsuccessful projects – interviewing a consultant (Steffan Martell) was by far our most honest and detailed source about failed projects. Because the horror stories that are written about – millions of dollars that are lost after years of investment – remain vague about reasons and details.

So while we the focus of our cases were one the good (ASDA-Wal-Mart, Deloitte) and the bad (AT&T, Sears), one of the most striking similarities between the two is that there is lack of substantial reliable data backing up either side. Our analysis primarily focuses on how to mitigate the negative experiences, and how both companies and consultants can work to create more open and clear environments in which to work with each other. Successful change management doesn’t come from consultants, but they can be an effective tool for businesses to use.

So what are your thoughts? Can you imagine yourself as a consultant? As a company using a consultant? If you dream of being a consultant, how would you set expectations with a client? If you worked for a company, how would you go about hiring a consultant and communicating your needs?
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10 Comments
  1. Sanjeevi permalink

    As I read this post, I thought about the handful of times I’ve found myself in the position of justifying consultants. In my naive view, the #1 thing consultants bring is authority.

    The average worker trying to initiate bottom-up change faces two major barriers: it’s outside the scope of his job & his change suggestions aren’t trusted. On occasion, this is fair. I’ve certainly made suggestions that would improve my workflow without realizing the full impact that change would have on other processes.

    Consultants can be trusted to have a wider, outside perspective, because they aren’t bogged down by a regular role and its incentives. That, to me, is the one reason I would lean towards “always use consultants” when it’s a feasible option.

    On a side note, a case study on Cisco’s ERP implementation has an interesting solution for using internal people and resolving the incentives problem. They pulled people entirely out of their divisions and roles, i.e. had them report to a new manager. It’s a bit resource-heavy and drastic, especially since their tactic was to only take staff that departments did not want to give up, but the case study made it sound like it was highly effective. I should mention this was the first case study in a series and everything in it sounded positive.

    To return to the topic of the original post, I think you’ve picked a very interesting topic and your notes on the lack of certain data available make quite a bit of sense & also make me think of the questions I wish we could answer. Well, like you mentioned, soon we will know plenty of people in the field and maybe then we can get some insider insight.

    – Sanjeevi

  2. Shawn permalink

    When I interned at Premera, our team had two IT consultant contracted from a Chicago-based IT consultant company. Basically they work with us for a system project that is supposed to be one year long. From my perspective, they have no differences from my other colleagues, attending meetings and working with team leaders. I would say, at least during my internship, those consultants were great asset to our project as they have wide knowledge of the system we were working on, and they know how to approach internal clients and convey their ideas in a positive and non-offensive way. So basically I haven’t experienced any case that consultants screwed up a project, anyway as you said, it’s hard to make a fair judge between the two sides.

  3. Jitsuko permalink

    Your post reminds me a question I asked before – what is a successful consulting? One of my friends used to work as a consultant at a strategic management consulting firm, and told me a story about her experience.

    An executive of a company asked her as a consultant, to analyze the feasibility of a plan to reform the R&D department of his company. She worked very hard for the project, and completed the report about the plan. Taking all the risks into account, the conclusion was “go for it.” The client really liked her report and conclusion, but he chose not to do it, because he had another plan in his mind. He said to her “your report helped me make my mind.”

    She was wondering whether she did a successful job or not. If the plan the management chose does not work, does that mean she did her job successfully because she recommended the other one? If the plan the management chose does work, does that mean she did her job successfully because she helped the decision?

    I agree with your comment that successful change management doesn’t come from consultants, but the role of consultant teaches us a lot about management, too.

    – Jitsuko on behalf of Swarnika and Scott

  4. As Sanjeevi said that consultants can be expected to have wider world perspective of issues and have experience of working on similar issues in other organizations,there is always a possibility that they might be fixed in their opinions about how to approach a problem and what might be the optimal solution to a issue despite the unique needs of a company .

    However I would strongly agree that consultants cannot be the drivers in leading change in a company as they can only provide guidance and inputs on how they feel the process should be laid out and how the problem should be approached ,but the real drivers would be the managers at the companies themselves who should also have a good understanding of why change is needed and what are the effective issues that concern it.

  5. Meng-Chi Lee permalink

    We also strongly agree that successful change management doesn’t come from consultants, but they can be an effective tool for businesses to use. The consultants are to provide different perspectives about one issue. They give good/bad solutions to the company. However, the company should also show their trust to the consultants first.

    If we work for a company, we would give enough power to a consultant to access internal resources. It is for making sure he/she can fully understand what is our purpose/project. Like Shawn’s intern experience at Premera, we will let the consultant involve projects and treat him/her as one of our employees, even though we know it is just a temporary relationship. We have to show our trust first before we can get one trustful solution back.

    By Meng-Chi (Patrick) Lee, Che-Wei (Tommy) Hu, and Zhenhua (Thomas) Wang.

  6. I agree with what Sanjeevi said. Consultants bring in authority and wider perspective. At times, management within the organization cannot see the loopholes or at times even if it sees, it turns a blind eye to it. Consultants do a good job of bringing in a change which internal management is incapable of. They have good knowledge in certain areas in which the current internal management lacks. I liked Jitsuko’s example. At the end, though the consultant’s solution was not used, it helped the management to make a decision which is more important. It should not be compulsive to follow consultants blindly. They should be more like aids helping to make your decisions easier. But at the same time, if consultants are made to feel as outsiders, it wont work out well. As Shawn mentioned, they should be treated as team members for best results.

    -Gauravee, Surry and Jeroen

  7. I have worked for several companies before include governmental organization (700 employees), OEM machining company (10~20 employees) and multinational software company (4000 employees). They frequently outsource trivial or excessive works to vendor companies, even the smallest company did, however none of above mentioned companies used outside consultants. When I entered this program, I, initially didn’t know what I want to do after finishing it. I had some IT background but I don’t want to be a software engineer or anything relates to coding. Consultant, in contrast, sounds enticing to me. Lots of consulting jobs are IT-related, some doesn’t require technical background. But what do consultants do is always a question in my mind. I visited big four’s websites, asked alumni who is working as a consultant…none of their answers could really satisfy me. This class gave me more images on consulting, in my opinion, consultants are hired to take care of some specific issues (projects, perhaps?). General speaking they know how to deal with various kinds of problems, but cases varies from company to company. Other factors should also be considered when they are going to propose solution. Nevertheless, do they really understand the operation of the company? What if they only see the shallow level of the issue but ignore the ‘real culprit’? We should think about it. Gold is not everything, so does consultant.

  8. The topic you guys have picked is very interesting. Organizations often perceive consultant as folks who will come in, provide a silver bullet quick fix and walk off. This is not true, since the motive of consultants is to work *with* the organization and arrive at the solution. The fact that consultants have done 99 similar projects in the past gives them the legitimacy to work with. But even that does not mean its going to work for the 100th time. Practically, organizations should expect to learn from consultants and not follow them blindly. The challenge would be to think about sustaining the project after the consultants walk out of the door.

    Thanks,
    Ajay, Nishant & Paul

  9. As I discussed in the case – “Role of Consultant”, the first and foremost role of a consultant is to communicate internally. And, I would also agree with the fact that it’s not the consultant who brings about a change in the organization. It’s the team he works with his clients- stakeholders, cross-functional teams and customers. Treating everyone as a client, a consultant’s major role is to provide services and to maintain relationship with his clients. The ongoing communication and collaboration would contribute to the success of the project.

  10. Mansi Sharma permalink

    Our case study also focuses on a similar topic – The role of consultants in companies. We also experienced this problem where finding the good and bad case studies were difficult. The good case studies were easy to find on the company website but to determine whether or not they are really remarkable achievements of consultancy was difficult. And one will not find examples of failures on consultancy company’s websites.

    As for the topic is concerned, I would like to add my opinion to what my fellow classmates have said. It is true that consultants are very important in bringing about a change in a company. They play a major role in this change and it is their level of knowledge and appropriate use of discretion that can really help companies bring smooth changes. It is very important for client company to do a profile check of the consultancy firm to verify whether or not their skills match the requirements. I would like to give the example of Google over here who were very smart at choosing Conyers Dill & Pearman as the consultancy firm as they had great expertise in legal and financial sector. They used their knowledge to implement a strategy known as ‘Double Irish’ and ‘Dutch Sandwich’ that helped Google cut down their tax from 35% to 2.4%. It is only due to the deep understanding of the related subject and situation can a consultancy firm give such advice which can benefit the client company to great extents. Therefor, client companies should be very careful in choosing consultants that can be a good match to the nature of problem that needs to be handled.

    Mansi, on behalf of the team (Tien, Ruchi, Mansi)

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