A Consultant Finally Makes the Big Time : * Government: Bush’s choice of a management expert for his Cabinet sparks kidding from field’s critics.
Have you heard the one about the management consultant? He’s the guy who will steal your watch, tell you what time it is, then make you pay to get it back.
Or this one? A consultant is an ordinary person 50 miles away from home.
There have been scoundrels and statesmen, siblings and sycophants. But President Bush’s nomination this week of Barbara Hackman Franklin to become secretary of commerce apparently marks the first time that a management consultant has gotten a shot at becoming a Cabinet member.
Not to mention standing 10th in line to succeed the commander-in-chief.
“Wouldn’t that be something? That would probably be someone’s idea of a nightmare,” said James H. Kennedy, a newsletter publisher who tracks the consulting field from his base in Fitzwilliam, N.H.
Critics are hard on consultants. Like lawyers, they come in for a lot of derision. The oft-repeated slam is “that consultants tend to ask people what they think and then tell them what they heard,” acknowledged Robert Paulson, a director in the Los Angeles office of McKinsey & Co., one of the world’s biggest management consulting firms.
Nonetheless, consultants appear to have won a permanent role in corporate America, even in advance of Franklin’s confirmation.
“They provide a very valid service,” Kennedy said. “But the jokes are unending.”
(Here’s another: A management consultant is someone who knows 50 ways to make love but can’t get a date.)
It’s not that anyone is impugning Franklin’s credentials. In addition to running her Franklin Associates consulting firm in Washington, she is a highly regarded director of seven big U.S. companies, including Aetna Life & Casualty, Dow Chemical Co. and Nordstrom Inc. But, like many other consultants, she has never worked as a manager of a large company.
Of Franklin’s nomination to the Cabinet, Marsha Lewin, a consulting veteran with her own firm in Westwood, said: “It’s nice to have a professional among a bunch of amateurs.”
Consulting is a “very elastic term,” Paulson added. “It covers everything from Henry Kissinger consulting on geopolitics to unemployed middle managers. They don’t make anything; they sell advice.”
This advice doesn’t come cheap. No self-respecting senior consultant will bill less than $2,500 a day, Kennedy said, and fees can run double that. Worldwide, the industry’s annual revenues are estimated at more than $23 billion, with U.S. consultants accounting for more than half.
“It’s one of the few industries that we lead in,” said Larry Greiner, a professor of management at USC who in the late 1970s developed the first course on management consulting in an MBA program.
Companies from American Express to Pacific Telesis to BankAmerica use consultants to handle technical projects, advise them on benefits and compensation, help with long-term strategies and eliminate fat in lean times.
In fact, almost all major companies have used consultants at one time or another.
One former consultant who insisted on remaining anonymous recalled that, years ago, a national business magazine published a story about 10 big U.S. companies that claimed never to have used consultants. As it turned out, more than half had hired the same big consulting firm.
The recession has done further damage to consultants’ reputations. “They’re viewed as guys with black hoods brought in to do the head-chopping,” Paulson said.
Although the recession has taken off much of the bloom, the field still attracts many of the best and brightest MBAs from Harvard and other top schools. Fresh out of graduate school, an MBA with some business experience can expect to make $50,000 to $75,000 a year, Greiner said.
Greiner noted that the potential for ethical breaches, such as insider trading, is huge in consulting. In the 1980s, he said, a Boston consulting firm was tainted by its connection with a top official of Guinness, the brewery conglomerate, who was found guilty of stock manipulation in Britain’s biggest white-collar crime case.
Perhaps it’s appropriate to leave the final word on consultants to John Kenneth Galbraith, a renowned gentleman who for decades has practiced the bedeviling science of economics--another field that has taken its lumps:
“You can quote me as saying that consulting is something I’ve rigorously and successfully avoided in my lifetime on the grounds that anybody on the inside (of a company) will know more about it than anybody on the outside.”