The shrewdness of the consultant

One of my favourite quotes is Machiavelli: “A prince who is not himself wise cannot be wisely advised… Good advice depends on the shrewdness of the prince who seeks it, and not the shrewdness of the prince on the good advice.” I’ve used it often when lecturing about consultants to explain to the students (and consultants) in the audience that they can’t deliver good consulting unless they have a shrewd client who knows how to use consultants appropriately.

However, while writing a book with Peter Smith, a leading expert in procurement, I was struck by a different thought. The book is primarily aimed at procurement people and is based on the premise that, if they understand much more about this sector, they’ll be able to take better decisions about which consultants to use when. Listening to some of the very senior procurement people we interviewed and talking to Peter himself demonstrated to me just how little consultants understand buyers.

If I talk to consultants about procurement, it’s usually a matter of seconds before someone trots out the complaint that procurement people treat consulting as a commodity. “They’re used to buying office stationery,” is the usual way of putting it. For the people in the book, nothing could be further from the truth. Admittedly, they were perhaps more senior than the “category managers” a consulting firm bidding for a one-off contract might encounter, but they were universally well-informed and intelligent about the particular challenges posed by buying professional services.

E-auctions are a case in point. I’ve blogged before about how these help clients identify a market rate and are used because consulting firms don’t publish their rates. In other words, if the consulting industry was more transparent, there would be fewer e-auctions.  Value is another aspect: consultants complain bitterly that procurement people only look at fee rates when they’re comparing one firm to another. Seeing it from the procurement side of the table, price dominates the discussion because there’s no other simple mechanism for comparing firms. Procurement people are caught between a rock and a hard place. The more they succeed in getting consulting firms to spell out the differences in their approach, the less easy it becomes to compare the firms. Their job is to make comparisons: the aim of the consulting firm is to differentiate itself.

That’s just one example. But the main lesson I’ve taken away from the book is that it’s not just the prince that needs to be shrewd.

10th July 2010