Last Friday, I wrote a post about a measure by the US DoD to produce efficiencies by publishing the actual cost of the preparation of each report and study in the front of each document.
As part of that same “Defense Efficiencies Initiative” launched in 2010 by former Secretary of Defense Robert Gates, there were as well the following two:
“[…] immediately cut the dollars allocated to advisory studies by 25 percent.”
“[…] cut the size of the staff support contractor cadre by 10 percent per year for three years […]”
Another report (1) by the Congressional Research Service [PDF, 86KB] assessing the efficiency of Gates’ initiatives found these ones as the ones with the higher potential savings for the DoD.
Nearly everyone working in a big corporation can sympathise with such initiatives, having sometimes wondered where is the added value of certain reports or the cost/benefit of shiny consultants’ teams brought in to solve an important issue based on noise-affected inputs received by insiders in too-short time to digest them only to produce yet another costly report and leave having created barely anything else but costly entropy.
A former colleague has a wall in his office covered by a collection of tens of leaflets from what he calls “strategic consultants”. I took on his habit of picking those leaflets, and even though I don’t collect them I do publish them in my Twitter account from time to time:
https://twitter.com/#!/javierirastorza/status/96623169644924928
https://twitter.com/#!/javierirastorza/status/131786083699662848
https://twitter.com/#!/javierirastorza/status/154655970201567232
That much for the perceived value of consultants.
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(1) Cost of Congressional Research Service assessment not available.
The Blog by Javier 
Much deeper this one! xDDD
You missed the point of consultants to large organisations. They are there to provide someone credible to blame. Larger budgets make managers appear more powerful. Often they tell the organisation what it already knows but it isn’t worth anyone’s job internally to say it.
You’re fully right. A colleague put it like “you pay them to say what you want them to say”. But then, seeing the bills they charge, I continue to miss the point to a large organisation.
“But then, seeing the bills they charge, I continue to miss the point to a large organisation”
It is how the immune system in a large organisation works. If you do something interesting/good/innovative/risky/different then the organisation will likely kill it since someone else in the organisation is likely to end up worse off. And if you do it directly then you’ll also end up worse off when they fight back. By funnelling that into consultants instead you can distance yourself from whatever they produce but still cover your ass. If the organisation reacts badly then you get to blame the consultants and if things work out then you still get to claim credit.
Large organisations are every resistant to change, even when it is obvious bad things are afoot. See Kodak’s recent (15 year) fall. The innovator’s Dilemma book covers it in more detail. Most notable is that companies tend to be most profitable shortly before they fall. That much money helps fuel the immune system resisting change. Consultants are happy to take the money and the blame.