Is a consultant simply someone who borrows your watch to tell you the time?
In his article for Time.com, Gary Belsky interviews veteran journalist Duff McDonald, who says he makes a point in his book, "The Firm," that the large and influential management consulting firm, McKinsey & Co., "might be the single greatest legitimizer of mass layoffs in history — although that would be pretty much impossible to measure. Companies do need to lay off workers in tough times, that's a simple fact. But the whole idea of corporate powerhouses laying off thousands of people during good times simply to juice profits — and, naturally, executive compensation — is something that McKinsey has definitely had a hand in as well. That sounds like a vote for evil, to me."
The article goes on to ask whether McKinsey is a force for good or evil.
The reality of relentless changes overshadows the potential risk of bringing in consultants. By hiring a consultant, clients are hoping to have access to deeper levels of expertise than would be financially feasible for them to retain in-house on a long-term basis in order to deal with impending changes. A recent special report, The US Consulting Market in 2017, by Source Global Research highlighted how the need for expertise is apparent as the consulting market grows:
- U.S. financial institutions spend $14.8 billion on consultants as attention switches to regtech and robotics
- The U.S. consulting market grew 7.1 percent to $58.7 billion in 2016
- Cyberattacks have forced U.S. companies to ramp up spending on cybersecurity consultants to $7 billion
In essence, changes to regulations in the financial services industry and the advancement of robotics have led to a need for more expertise from consulting firms in the U.S. financial services industry.
Consulting Firm Acquisitions
Technology and market changes are not the only trending topics. The Source Global Research released its report, M&A: Is It Adding Value? on September 5, 2016, based on a survey of almost 3,000 senior users and buyers of consulting services. It discusses transformation via mergers and acquisitions which can create new villains, heroes or apathy as consultants must redefine their role and follow new leadership.
This is part one of a three-part series. In his next post, Eric will examine what qualifies a consultant and the standards to which they are held.
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About the Author
Eric Moore is the Practice Manager of Accounting Solutions Partners (ASP). He brings two decades of progressive experience in controller, CFO and general management roles with privately held companies. He has a broad perspective from working in environments ranging from start-ups to multi-generational mid-market companies withrevenue in excess of $100 million.
Eric holds a bachelor's degree in business administration from Washington State University with an emphasis in accounting and finance. He is an active community volunteer, serving with various faith and compassion-based organizations for the last 20 years. In his free time, he enjoys spending time with his wife and three children, watching college football, traveling, hiking, riding his motorcycle and soaking in the sun at any warm beach.
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