We’ve done a lot of research into how clients think about the value consultants add. The best way is one of the simplest: to ask someone whether a firm has added value over and above the fees they charged, writes Fiona Czerniawska of Source.
It’s a question a client can instinctively relate to and, by adding some supplementary questions about value as a multiple of fees charged, we can also gauge the extent to which this perceived value has been marginal or genuinely game-changing.
If we take all of our client data from 2016 (2017 data will be available soon… ), clients are pretty happy with the quality of work consultants do (globally, 65% would describe it as good or very good), but they’re unconvinced about the value they add. Only 35% of clients say that the consulting firms they’ve worked with have added more value than they took in fees, while 48% say that fees were in line with the service delivered, and the remaining 17% think that consultants take more in fees than they add in value. Not exactly a stellar report card.
That’s at a global level, across all the firms we gather data on. But looking at individual firms, we’ve noticed a bizarre pattern.
In this chart we show the results for 21 of the world’s largest consulting firms (anonymised: we’re not in the business of washing dirty linen in public). They’re ranked, left to right, from the firm judged by clients to do the highest quality work (Firm A) to the one perceived to do the lowest (Firm U). The data bars show the increase or decrease between a firm’s quality rank and its value rank. Thus, for example Firm B comes second in terms of quality but drops almost to the bottom when it comes to value.
There are some firms (A, C, D, H, K, L Q and T) whose ranks for quality and value are fairly similar. However, firms who are viewed as doing high quality work are often seen more negative in value terms, demonstrating that it’s perfectly possible for a consulting firm that’s doing good work not to be seen to be adding value. The converse is also true: many firms that are lower-rated for quality fare better where value is concerned. From talking to senior executives who buy a lot of consulting services, we’re reasonably sure why this is. Many consultants believe that the quality of their work speaks for itself: they don’t really need to sell or market themselves. They think that they don’t need to spend time with their clients explaining what they’ve done and how it will help, because clients are bound to recognise this for themselves - and the better the work they do, the more likely this arrogance is likely to creep in.
This data highlights why that’s a wrong, and possibly dangerous, assumption. Good consultants need to spend just as much time talking about value as less good ones.
Fiona Czerniawska is a leading commentator on the consulting industry and a co-Founder of Source who provide specialist research on the management consulting market to consultants and their clients.
© Fiona Czerniawska 2017. All rights reserved.
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