‘But does it work?’ Perceptions of the impact of management consulting

Strat. Change 11: 271–278 (2002)Published online in Wiley InterScience(www.interscience.wiley.com). DOI: 10.1002/jsc.603

‘But does it work?’ Perceptionsof the impact of managementconsultingChristopher Wright1∗ and Jim Kitay21 University of New South Wales, Sydney, Australia2 University of Sydney, Sydney, Australia

• The performance and legitimacy of management consultants have come underincreasing criticism within the business press, while academic literature hasemphasized the often intangible nature of consulting services.

• Based on extensive interview data, we find that consultants and clients commonly relyon subjective assessments of consulting impact and ‘impression management’.

• A countervailing ‘high-impact’ rhetoric is discerned among large consulting firms whichstresses the measurable, bottom-line results of consulting interventions.

• We interpret this discourse as a legitimation strategy aimed at countering the growingcritique of consulting. However, we note that this strategy has served to heightenclient expectations and that consultants continue to face the dilemma of successfullymanaging client perceptions of consulting success.

Copyright 2002 John Wiley & Sons, Ltd.

Introduction

Management consultants have become aubiquitous feature of corporate change andrestructuring, but assessing their impactwithin the process of organizational changeis difficult. While consultancies themselvespromote an image as successful ‘agents ofchange’, less favourable views can be foundin the mainstream business press (e.g. Mick-lethwait and Wooldridge, 1996). By con-trast, academic studies have emphasized theintangible nature of consultancy services andhow consultants engage in the managementof their clients’ impressions (Alvesson, 1993,2001; Clark, 1995).

* Correspondence to: Christopher Wright, School ofIndustrial Relations and Organizational Behaviour,University of New South Wales, Sydney, NSW 2052,Australia.E-mail: [email protected]

Surprisingly little research has been con-ducted into the ways in which consultantsand clients evaluate the outcomes of con-sulting projects. In this paper we analyse theperceptions of both management consultantsand clients in evaluating the impact of con-sulting interventions and what this revealsabout the nature of consultant–client rela-tions. The paper begins by reviewing recentdebates over the role and impact of manage-ment consultants. We then use interview datato examine how consultants and clients viewconsulting impact. We find significant diver-sity in practices and attitudes on this issue,varying from formalized, quantitative evalu-ations to informal, ad hoc assessments. Thepaper highlights a consultancy discourse thatstresses rational and tangible outcomes andexamines how this relates to the contestednature of consultant–client relations.

Copyright 2002 John Wiley & Sons, Ltd. Strategic Change, August 2002

272 Christopher Wright and Jim Kitay

Consulting impact: good, bad orinherently ambiguous?

The impact of management consultants hasbeen examined from a variety of perspectives.At a macro level, researchers have highlightedthe role of consultants in the diffusion ofmanagement knowledge and practice. How-ever, the micro-level impact of consultantswithin organizations is less clear-cut, as pop-ular interpretations fall into two distinctcamps; highly positive and highly negative.

Consultants themselves present a positiveinterpretation of their contribution to orga-nizational change, and use this rhetoric tojustify their services. Consultancy brochuresand web pages present consultants as mas-terful and rational ‘agents of change’, whocan provide insightful yet practical advice,and assist clients in the complex processof implementing change. Nor is there ashortage of clients who aver that consul-tants provide a valuable service. Advocatesstress how external consultants can provideexpertise which is lacking internally, revealnew insights, instigate new initiatives, trans-fer skills and knowledge, or simply providetemporary skills (Kubr, 1996: 8–13). Indeed,Redman and Allen (1993) found surpris-ingly few complaints from British managersthey interviewed, with most respondentsreporting that consultants gave ‘value formoney’ and ‘added value to their organi-zation’ (1993: 51).

In contrast to this positive image of con-sultants, a more negative interpretation hasdeveloped within the mainstream businesspress. Symptomatic of this backlash are exam-ples of assignments that result in a failureto achieve forecast financial goals or areharmful to performance. Prominent exam-ples include huge consulting expendituresat AT&T, Monitor’s disastrous role at Sears,and the near-bankruptcy of Figgie Interna-tional (O’Shea and Madigan, 1997: 3–9,26–72, 124–5). Unflattering accounts alsocome from former consultants who revealunethical or dubious aspects of their activ-ities (Pinault, 2000). The backlash reacheda zenith in the 1990s where consultants

were criticized for their role in promulgatingwhat many saw as a dubious managementfad — business process re-engineering (Dav-enport, 1995, Micklethwait and Wooldridge,1996: 40–43).

Academic interpretations have added athird dimension to this polarized debate bystressing the inherently ambiguous natureof consulting work. Alvesson (1993: 1005–7,2001: 867–9) has argued that the work of‘knowledge-intensive firms’ and ‘knowledgeworkers’ is often difficult to evaluate. Thisis due to both the inherent ambiguity ofmuch ‘knowledge work’ and the complexityof intervening variables which make a causalconnection between consultancy interven-tions and changes in client performancedifficult to establish. Thus clients often havelittle basis on which to assess the perfor-mance of consultants beyond the subjectivefeeling that it ‘was money well spent’. Fur-thermore, neither consultants nor clients canresolve the perennial issue of ‘what wouldhave happened if consultants had not beenemployed?’

Clark (1995) argues that a critical aspect ofconsulting work is the management of clientimpressions to produce a favourable per-ception of consulting success. Clark outlinesa process of ‘persuasive communication’ inwhich the consultant constructs ‘a realitywhich persuades clients that they have pur-chased a high quality service’ (1995: 18).A key technique is to craft indicators andimages of expertise and substance throughtheir reputation, trademark methodologies,and polished presentation skills. These ‘sym-bolic outputs’ (Starbuck, 1992: 731) promotean impression among clients of a positiveoutcome.

Critical writers have also highlighted thepolitical nature of consulting engagements.Beyond the publicly stated reasons for engag-ing consultants, such as cost reduction ornew business strategies, Jackall (1988: 144)notes that managers often use consultanciesto increase the legitimacy of decisions whichhave already been made or to act as scape-goats for unpopular actions.


The impact of management consulting 273

Finally, how have consultants respondedto these critiques? Sturdy (1997: 397) viewsconsulting as ‘an insecure business’, withboth parties seeking a ‘sense of controlover environment and identity’. This leadsus to expect consultants to be sensitive tocriticisms at two levels. First, they would seekaffirmation from clients that they have ‘donewell’ and might anticipate future business.Second, they would react to criticisms fromclients and the business press that questionthe value of consulting practices or even theirlegitimacy. Thus debate over the impact ofconsultants on organizational performanceis likely to change consulting rhetoric andpractice, for example by highlighting themore tangible outcomes of consulting activityand seeking ways to measure this. Thisis manifested in the growth of so-called‘high-impact consulting’ among the majorinternational consulting firms.

This review of the literature suggeststhat assessing the outcomes of consultantinvolvement in organizational change is acomplex and highly political process. Aswe demonstrate, management consultancieshave responded to critics by developing newrhetorics and strategies which emphasizetheir ability to have a positive impact uponclients.

Methodology

Our analysis is based on an investiga-tion of the roles, impact and careers ofAustralian management consultants. Theresearch involved semi-structured inter-views with 63 consultants and 10 clients.Among the consultant respondents, 25came from large firms (>30 staff), 10 frommedium (5–30 staff) and 28 from small orsolo practices (<5 staff). The majority ofconsultants (46) that we interviewed spe-cialized in change management and humanresource areas, with 10 respondents work-ing in strategy consulting, 4 in operationalefficiency, and 3 in information technologyconsulting. The gender mix was 46 male and17 female. Clients were primarily senior man-agers in large firms from a range of industries,

including manufacturing, financial services,higher education, media and transport. Inter-views with consultants explored the consul-tancy’s background, services and examplesof recent consulting projects. Questions toclients included their use of consultancyservices, the nature of consultant–client rela-tionships and details of specific consultancyprojects. Quotations from the interviews areunreferenced to preserve the anonymity ofrespondents.

The interviews revealed different viewson what results from a consultancy projectare desirable and how the results shouldbe evaluated. The next section examinesperspectives on the intangibility of muchconsultancy work and the difficulty ofmeasuring the outcomes. The followingsection discusses some of the motivationsfor, and consequences of, efforts to devise‘hard’ measures for consulting work.

‘Adding value’ and the ‘warm innerglow’

One theme that emerged was the low empha-sis on formal evaluations of the outcomesof consulting assignments. Interviews withconsultants, particularly in small practices,highlighted a reliance upon informal clientfeedback. As one solo human resource con-sultant stated, ‘we’re in the habit, we finishsomething, ring up a month later and say‘‘how’s it going?’’’. Another common refrainwas that a good measure of effective impactwas repeat business and referrals. A consul-tant with a multinational firm stated: ‘Howdo you make a success of jobs? On whetherthey come back or whether they tell theirfriends. It’s like any other service.’

Some small consultants espoused a moresystematic approach to evaluation. A trainingconsultant explained that she administereda formal questionnaire before and afterassignments in order to gauge how welleach programme had gone. However, otherrespondents argued that more informal andsubjective measures gave a better assessmentof impact and client satisfaction.



The importance of informal, subjectiveevaluation was stressed by one consultantwho often assessed the outcomes of otherconsultants’ work:

. . .there’s formative evaluations, summa-tive evaluations and WIG evaluations,which stands for ‘warm inner glow’. Andmost of the evaluations that we get askedto do are WIG evaluations. . . Like, youknow ‘the project’s over, there are nodata, there is no baseline, blah, blah,blah’. And the question is, do you havea warm inner glow? And if so who shouldbe complimented for it, and if not, whoshould be blamed?

Several consultants justified the use ofsubjective indicators of assessment because‘hard’ or ‘technical’ measures of success werelacking. ‘Objective’ measurement was partic-ularly problematic in areas such as organi-zational development and culture change,where the aim was to alter the thinking ofemployees or key managers. A senior consul-tant in a firm specialising in ‘soft’ consultingrelated:

The learning organization stuff is hardto measure. It is actually one of the keychallenges. And yet people can walk into aroom during one of these workshops andfeel it — the buzz. People are motivated.Talking about things they rarely talkedabout. And it does sort of pay off . . . Youknow, you’ve got a good sense that goodthings are happening.

The same consultant noted that the lack ofhard performance measures made it difficultto demonstrate the outcomes to clients,which made this type of work a ‘hard sell’.

Other consultants highlighted the prob-lems of assessing their contribution to clientorganizations given the presence of othercontributing factors and the long-term natureof strategic change. A solo human resourceconsultant noted:

It’s often hard to get that sort of feedbackbecause you’re going into organizationstypically where a number of things are

happening, often where there’s more thanone consultant in there at the same time.And because you’re in there dealing withthe longer term strategic things all aroundthe process by which they make decisions,it can often be quite a while before youknow exactly what impact you’ve hadin a sustainable sense. . . It can often befrustrating in the sense that you neverquite know what you’ve achieved.

Pressures to complete a project andmove on were cited as another factorthat prevented consultants from undertakingmore detailed evaluation of their projects:‘We don’t [evaluate] because to do thatproperly would take a lot of time. And ifwe were spending our time doing that, wewouldn’t be doing any work’.

Creating the perception of success and‘value for money’ despite intangibility andcomplexity highlights the importance of‘impression management’. As one consultantstated in a media interview:

I mean if we’re going to buy a good,we can see what the good is, but as aconsultant, we need to make sure that allthose aspects which are tangible — thatis, that the client can see or hear — needto be first class. Or if you like consistentwith the quality of advice and perhapsconsistent with the price. And how goodis our advice, how professional lookingare our reports; how do we answer thephone if somebody rings us at 10 to 6 ona Thursday evening; what is the qualityof our stationery; how do we dress, howdo we speak? (ABC, 1997)

Nor was recourse to subjective perceptionslimited to consultants. The client managersthat we interviewed also relied primarilyupon a subjective assessment of consultingprojects. As one manager observed, a recentproject was favourably assessed becausethe consultant had previously done ‘goodwork’ for the client, leading to a feelingthat ‘she had earned her money’ and ‘itlooked like she was delivering everything’.Indeed, most consulting assignments are



not rigorously evaluated or assessed. Rather,clients rely upon such informal mechanismsas the readability of the report or tearoom discussions about the efficacy of theproject (Redman and Allen, 1993: 50).Consultants themselves were well awareof the importance of clients’ subjectiveassessments of their work. As a manager inan international strategy consultancy noted,her firm relied upon creating an impressionof making a difference that was often hard toquantify:

I can think of a situation just recentlywhere we had two engagement managersworking for a client, and the clientsaid to the partner ‘I don’t know whatthese guys have done for us but theyare just brilliant’. So you know you getthose comments coming back. If the clientdoesn’t feel like you’re adding impact, it’sall about impact, then you can’t justifyyour existence.

Not all of what consultants do can be easilymeasured. This might be because (a) it isintangible, (b) there are too many changeshappening at once to isolate the effects ofany one change, or (c) the change involvesa long time frame and the effects are notimmediately apparent. Indeed, there aretimes when hard measures are simply not anappropriate means of assessing the impactof consultancy, but practitioners should beaware of the need to have a more robustform of evaluation than ‘it felt good, so itmust have worked’.

Satisfaction guaranteed: the rise of‘high-impact’ consulting

While many of the consultants and clientswe interviewed stressed an informal andsubjective approach to the evaluation ofconsulting impact, we also encountered astrong countervailing rhetoric, particularlyamong the large international consultingfirms. These consultants not only promiseto ‘deliver’ tangible outcomes in termsof specific financial or technical measures,but also are willing to make their fees

contingent on achieving these objectives.As the managing partner of a leadingUS consultancy explained, his companyexpressly employed a ‘high-impact’ modelin which:

We use a 20 : 1 benchmark. We want theclient to see 20 times our fees in value.And we’re very comfortable having theclient be the sole judge of that. We’ll dowork on a contingency basis. If the clientdoesn’t see the 20 times value, they don’tpay us the full fees.

Similar claims were made by the princi-pals of several other global consultanciesand appear to represent a dominant dis-course among these firms. Indeed, promisesto deliver measurable changes in the perfor-mance of client organizations have becomean important marketing device. Examplesinclude strategy consultancies such as Bain& Co. which chart their clients’ performancein terms of changes in stock market value(O’Shea and Madigan, 1997: 225–7); per-formance improvement consultancies whichimplement structured cost-reduction sys-tems and guarantee set levels of cost savings(Pinault, 2000: 15–6, 144–9); and infor-mation technology and business processre-engineering firms, whose armies of con-sultants engage in long-term implementa-tion projects aimed at demonstrable changesin technology and organizational structure(Wooldridge, 1997). These developmentsform part of a shift away from the traditionalapproach of consultancy as an advice-givingactivity, to one in which consultants areactively engaged in the process of organi-zational change (Morris, 2000). This wasexpressed by the managing partner in aglobal consulting firm:

So we were more into, if you like, doingthe report and here’s the answer. Overthe years, that’s shifted a lot and. . . wedefinitely do like to see the work that wedo have an impact, in an organization. Ifthere’s not an impact, if [it’s] the sort of‘report that collects dust on the shelves’



sort of scenario, then we see that asfailure.

Demonstrating the ‘impact’ took a varietyof forms. Most of the larger consultancies hadformalized evaluation procedures for assess-ing outcomes. Assignments that focused oncost reduction or performance improvementgenerally had tight financial targets and eval-uation of the project was often integratedwithin the consulting methodology. A per-formance improvement specialist noted:

[We] had an evaluation methodology thatwe put in. We put it in week one. And that’swhat directors would review with theclient on a weekly basis. . . We’d establishthe evaluation criteria. We’d effectivelyset up our own spreadsheet, put their datainto it and try to track the results andshow them as we went.

Often such ‘hard’ evaluations were com-bined with client-satisfaction surveys. In oneof the ‘Big Five’ firms this involved annualsurveys of the core clients as well as threemonthly evaluations of ongoing projects.However, another senior consultant notedclient surveys had their limitations:

We have a quality system that evaluatesthings for two years after we’ve donethem. . . But generally we also try andtarget work that gives an immediatemeasurable return because that’s the bestsell and relationship builder you can do.

Hence emphasizing tangible, bottom-lineimpacts was important not only in managingclient satisfaction, but also in marketing andattempting to win new business.

Despite the rational, quantitative logic thatunderpinned the rhetoric of tangible impact,when questioned more closely many con-sultants acknowledged that quantifying theoutcomes of their involvement in organiza-tional change is often problematic. Tangi-ble measures of cost reduction or revenueimprovement, particularly if they involveshort time horizons, focus attention on themore easily quantified outcomes of consult-ing, while more long-term and intangible

projects, involving general business strat-egy or organizational change, have inherentproblems for assessment. As one senior part-ner in a leading consultancy confided:

Some of the work we do though, it’s alittle unfortunate because it’s going totake years and years and years to knowwhether the strategy’s actually had animpact. We’re helping a big company hereget into e-commerce in a big way. Settingup alliances, creating product offerings,creating new distribution channels, train-ing the sales force in how to use this kindof stuff. And you know it may be four orfive years before we know whether thatturned into a mega-billion dollar busi-ness.

Although promising tangible impacts andoffering contingency fee arrangements, thisconsultant argued that his firm’s impact uponclients often involved a gradual, incrementalchange in behaviour and thinking basedupon a long-term relationship, rather thana sudden shift through a single consultingproject.

Some client managers questioned theextent to which consultants had ‘addedvalue’, even when the impact had been mea-sured in terms of cost. In one case, severalclient managers acknowledged that the con-sultancy had assisted in identifying areas forcost savings, but criticized the quality of theconsulting staff and viewed a number ofthe recommendations as impractical. Clientcriticisms of consulting impact were partic-ularly pronounced in information technol-ogy projects such as the implementation ofenterprise resource planning (ERP) systems,where cost overruns and a failure to providepromised efficiencies appear commonplace(Stedman, 1999). Client managers that weinterviewed expressed dismay at the inabilityof armies of consultants to implement thesesystems on time and within budget. As aclient employee in one ERP implementationstated:

They work long hours and sit at theirdesk for ages, doing, I don’t know the



value of the work they’re doing. I don’tknow because a lot of it is a massivepaper chase. They just sit there and justspew out presentations and Gantt chartsand whatever but, I assume that they’renecessary because that’s just what wehave to assume.

In this case, cost overruns and the fail-ure to meet the implementation timetablereinforced client perceptions of poor qualityand contributed to tension between clientmanagers and consultancy staff.

Practitioners need to be aware that mea-suring the impact of consultancy work interms of cost or profitability does not neces-sarily provide a good assessment of its value.There is nothing inherently wrong with mea-suring impacts in financial terms, but thereare two caveats that must be made. First, theclient must be sure that the time frame isappropriate. As the ‘downsizing’ fad of the1990s demonstrated, short-term savings canlead to long-term problems (Cascio, 1993).Second, the client must be sure that thecorrect outcome is being measured. Clearly,many consultants and clients recognize thatthe outcomes of consulting are not alwayseasy to measure, and it is seductive to seizeon something that can be measured. How-ever, simply measuring something tangibledoes not ensure that a valid evaluation ofimpact has been made.

Conclusions

The recent shift towards a ‘high-impact’model of consulting needs to be interpretedwithin the context of greater competitionwithin the consulting industry and the grow-ing critique of management consulting. Byseeking to stress the positive and tangibleimpact of their services, consultancies aredeveloping a legitimation strategy that seeksto answer both the general criticisms of intan-gibility and harm raised in the business press,as well as convince current and potentialclients of the benefit of their services. Thestrategy highlights and privileges particular,tangible outcomes that are easily measured

such as headcount, cost reduction or revenuegrowth. Although management consultantsrecognize that much of what they do is intan-gible, complex and has long-term outcomes,attention is increasingly focused on the shortterm and measurable because this ‘solves theproblem’ of demonstrating that consultantshave made a ‘positive’ difference.

Our research supports those writers whohave stressed the important role that impres-sion management plays in much consultingwork (Clark, 1995). However, rather thanviewing the trend towards quantifiable evalu-ation and impact as simply another means for‘confident consultants’ to win over ‘gullibleclients’, we concur with writers such asSturdy (1997) who views consulting as an‘insecure business’ in which client scepti-cism and resistance play a critical role in thedevelopment of consultancy work. Despiteattempts by some consultancies to use the‘high-impact’ model as a strategy of differen-tiation, the competitive pressures within theglobal consulting industry have resulted in aconvergence in consulting offerings, in whichnearly all the large consulting firms nowemphasize the same rhetoric of tangibility,implementation and performance improve-ment.

Despite the attempt to appeal to ‘objective’financial or technical indicators of consultingimpact, our interviews with client managersand employees highlight the continued cen-trality of the informal and subjective aspectsof organizational change. Indeed, many ofthe consultants we interviewed were wellaware of the need to carefully manage clientimpressions within large, long-term changeprojects given the increased complexity ofconsultant–client relations and the greaterpotential for misunderstanding and con-flict. However, rather than overcoming clientscepticism and resistance, the developmentof the ‘high-impact’ consulting rhetoric hasheightened client expectations of consult-ing performance. Management consultantstherefore continue to face the contradictionsinherent in managing client perceptions ofconsulting impact.



Biographical notes

Christopher Wright is a Senior Lecturer inthe School of Industrial Relations and Organ-isational Behaviour at the University of NewSouth Wales. He has published extensivelyon the history of management practice andis the author of The Management of Labour:A History of Australian Employers (OxfordUniversity Press, 1995). His current researchinterests include the diffusion of manage-ment knowledge, labour management strat-egy, professional service firms, work reorga-nization and technological change.

Jim Kitay is a Senior Lecturer in the Schoolof Business at the University of Sydney.His recent publications include ChangingEmployment Relations in Australia (OxfordUniversity Press, 1997) and From Tellersto Sellers: Changing Employment Relationsin Banks (MIT Press, 1999). His currentresearch interests centre primarily on pro-fessional service firms and human resourcemanagement in banking.

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‘But does it work?’ Perceptions of the impact of management consulting

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