It is not new that governments call on consultants for advice on strategy and organization. Already in 1918, the Unionist coalition in power in Ottawa was criticized for its use of the “pseudo experts” of the firm Arthur Young of Chicago (since become Ernst & Young) in the reform of the public service.1.
With the rise of Taylorism and the “scientific organization of work” in the United States at the beginning of the last century, many “efficiency expert” firms such as McKinsey and Arthur Andersen (now Accenture) emerged to serve the organizational needs of the large industrial, commercial and bureaucratic structures which developed rapidly after the Second World War.
McKinsey, KPMG, Deloitte, PwC and other multinational consultancies maintain close ties with the most prestigious management and business schools in the world, and recruit the best candidates there. Sources vary, but the global management consulting market was estimated last year at nearly US$700 billion. Governments would constitute more than a quarter of this market. This is a considerable portion that has been increasing over the past 30 years. The consulting industry is highly concentrated, with an oligopoly of a few firms controlling half of global revenues.
Companies like McKinsey are, for the most part, private companies that are owned by the partners who run them. They are accountable only to themselves.
Their operation is opaque, based on professional and commercial secrecy, and framed by multiple non-disclosure agreements. With their decentralized structure, they have offices in more than 65 countries and 130 cities; which greatly facilitates the local adaptation of the global solutions promoted by the consultants.
Power based on expertise
The influence of consultants on private and public decision-makers is largely in the realm of ideas. Whether we speak of “re-engineering”, “total quality”, “results-based management”, or the “dashboards” of the Quebec Minister of Health, the consultants sell managerial thinking. They sell concepts, theories and methods. They provide intangible services whose effects are uncertain and difficult to measure. This is why it is so complicated for governments and large corporations to know if they are getting their money’s worth when using consultants.
Despite this moral hazard, they still continue to pay hundreds of millions to consultants. Why ? Because they believe that they hold a unique expertise to improve performance, coming from the experience of the thousands of private and public organizations to which the consultants provide advice on a planetary scale. Through their numerous missions, the consultants accumulate knowledge on the functioning and strategies of their clients. This information feeds large statistical databases that allow consultants to compare cases and generalize “best practices”, all based on so-called “proven” data.
Counterbalancing consultants
The consultants promise to streamline management processes. They present themselves as experts whose job is to find the best techniques to achieve the objectives set by decision-makers. This technocratic image is the basis of the reputation and influence of consultants. It serves to depoliticize their role and make what they do less visible on the radar screen of the media and public opinion. But the pandemic has changed that. The explosion of spending on consultants it has caused among governments is now turning the spotlight on the growing power of private consulting firms in defining public choices.
The time has come to provide a better framework for the “consultocracy2 “. Consulting firms should be subject to stricter disclosure requirements and codes of conduct that better control the revolving doors between government and firms. The analytical and research capacities of the civil service should be strengthened. It should be able to compete with the big consulting firms and attract the best talent.
Finally, there needs to be more room for deliberative democracy in the provision of public policy advice. If half of the sums paid by governments to consultants were invested in citizen consultation infrastructures, the advice given to decision-makers would be more balanced. The decisions taken would be more legitimate and would better reflect what Charles Lindblom called “the intelligence of democracy”.
1. So-Called Experts: How American Consultants Remade the Canadian Civil Service, 1918-21Alasdair Roberts (1996), Institute of Public Administration of Canada
2. Building the New Managerialist State: Consultants and the Politics of Public Sector Reform in Comparative Perspective, Denis Saint-Martin (2000), Oxford University Press. Winner in 2002 of the Best Book Award, United States Academy of Management