Large organisations are increasingly turning to the likes of Accenture, PricewaterhouseCoopers, or Deloitte for help implementing digital transformation. However, this is a severe mistake.
According to the Register, car rental giant Hertz is currently suing management consultancy firm Accenture for over $32 million. They claim that Accenture completely failed to deliver the functional website they had commissioned them to build.
I don’t know enough about this case to judge where the real blame lies. But whatever the facts it highlights something I have long argued – hiring a management consultancy firm to work on digital projects is a grave error in judgement.
Why Hiring a Management Consultancy Is a Mistake
Whether it is redesigning a website or helping an organisation undertake digital transformation, a management consultancy firm is rarely the right choice for one simple reason. The big management consultancy firms are products of the pre-digital era and as much in need of digital transformation as their clients.
Take for example Accenture, who was founded in 1989, well before the explosion of the internet. The other big management consultants are as old, if not older.
- Deloitte – 1845.
- KPMG – 1987.
- Ernst & Young – 1989.
- PricewaterhouseCoopers – 1998.
Only PricewaterhouseCoopers can claim to be a digital era company, founded as it was in 1998. However, the two companies who merged to form the current business have roots that go back 160 years!
None of these companies has a culture rooted in the digital reality of today’s business world. They are the products of the industrial and mass media era. An era where very different business rules apply.
I know what you are thinking. These management consultancies have been hoovering up digital talent for a pass time. Surely this fresh thinking is factored into the way they work with clients?
Unfortunately, based on what I have observed, and been told, that is not the case. I have spoken to many organisations who have worked with these consultancies and suffered similar experiences to Hertz. I have also spoken to current and ex-employees of these consultancies about their experiences within these companies.
It would seem that the legacy culture of these organisations stifles new and leaner working practices. Ultimately, these companies are built on delivering large, waterfall driven change programs, rather than embrace the rapid iteration and evolution of digital best practice.
In short, although some employees of management consultancies may be highly skilled and experienced, the companies methodologies and culture are often a barrier to the implementation of best practice.
Why then would any organisation choose to hire a company like Accenture for digital projects?
Why Do Companies Persist in Hiring Management Consultancies?
The answer is simple – hiring a management consultancy feels like the safe thing to do when you work for a large, risk-averse company.
You don’t get fired for hiring a large management consultancy. It is perceived as the safe choice. They are big and hired by a lot of other large companies so that must make them good right?
Also, they speak the language of management and work in ways they are comfortable with. It all feels so predictable and comfortable.
Of course, the problem is that just because something appears safe doesn’t mean it actually is. The world is different now and what feels familiar isn’t always the best solution anymore. Just because these companies had a good track record in the past, doesn’t mean they will have going forward. The rules have changed.
But there is another reason why management consultants win so much work in the digital field – there doesn’t seem to be a viable alternative.
If Not a Management Consultant Then Who?
Many companies turn to big tech players like IBM as an alternative. However, in truth, these companies face all the same challenges as management consultants.
At face value, Hertz would have been better off going to a large digital agency to deliver their website. An agency would almost certainly do a better job at delivering a website redesign like theirs. However, I suspect the failure of this project was not entirely one-sided. My suspicion is that Hertz had a role to play too.
Just as company culture makes management consultants a poor choice for delivering digital projects, so it also creates problems on the client side. In most cases, the client needs to change its working practices to provide and support digital services.
That may well have been why Hertz hired Accenture in the first place. They may have recognised their need for broader organisational change and saw a management consultant as a good fit for that work.
It may well also have been what put them off of using a digital agency. Although digital agencies are good at building digital services they are not traditionally good at change management, service design or digital transformation.
A Gap in The Market
In truth, large organisations like Hertz have limited options when it comes to digital projects. There is a gap in the market that in my opinion, larger agencies should be filling. That is why this is an area I am focusing on as I work with agencies.
At the moment those organisations seriously committed to embracing digital are being forced to improvise.
Some companies like Capital One solve the problem by buying up agencies and bringing that expertise in-house. Others, like the UK Government, are building their own in-house teams spearheaded by strong digital leaders.
However, even these approaches are not without their dangers. It is easy for an in-house team to be subsumed by the existing culture in just the same way as the talent hired by management consultancies often are.
No Easy Answer
As you can see, there is no easy answer to turning a traditional pre-digital company into an organisation where digital services can thrive. Increasingly I am concluding that it can only really happen with enormous strength of will at the very top of the organisation.
If senior leadership wants to be a digital-first company, it cannot just launch another initiative or hire in a management consultancy. As I say in my c-suite digital training, they need to fully commit to the endeavour at every level of the organisation or risk disruption by a new agile, digitally friendly competitor.
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