observer.guardian.co.uk/comment/story/0,6903,1509728,00.html
The Observer After 20 years working for large and small management consultancies, Davi d Craig thought he had seen every variety of human greed. The most strik ing was the director of an international consulting firm who boasted abo ut how much time he spent in brothels at his clients' expense. A few years ago, Craig helped sell a project to a health authority that i nvolved bringing over two consultants from America, even though there we re plenty of people in Britain who would have done just as well. In addi tion to fees, the NHS agreed to pay 300 a week for hotel rooms, 50 a d ay for food, the rent on flats for their families in Hampstead and Kensi ngton, fees for their children's private schools, taxis to take the wive s to and from teas at the Ritz and shopping trips to the West End and tr ain fares to take the husbands to and from the wives at the weekends. It was only when the project manager hired a private plane to bring him b ack from holiday that the NHS found the nerve to object. Whether the receipts they submitted were as straightforward as they appea red was another matter. As large buyers of flights and hotel rooms, cons ultancies can arrange with travel agencies to deliver covertly discounts of about 40 per cent. PWC said if it hadn't taken the money, its bills would have been higher. Maybe they would, maybe they wouldn't, but what is undeniable is that the practice didn't stop with them. When Craig was working for another firm , he received a memo from a helpful colleague which read: 'Here's how we do it every time. But we don't give the client the kickbac k' Over-billing - fraud, to put it crudely - was everywhere. Craig worked in the London office of an international firm where clients were charged f or the equivalent of 300 support staff, when in reality a mere 50 were i n the building. The money was taken and 'dedicated to the noble cause of further enriching consultancy directors'. Enrichment also came from cha rging to clients time spent looking for new business elsewhere or time s pent on the consultancy's business or time spent on the golf course. Craig began consulting straight out of university with expe rt knowledge of nothing apart from Romantic poetry. A graduate who did t he same today costs the client 7,000 a week. Directors are multimillion aires who don't open their eyes in the morning for less than 25k. I can say all this because he has adopted the pseudonym David Craig and s pilled the bean-counters' beans in Rip-Off! For once, the usually overhe ated marketing pitch that this is a book they didn't want you to read is true. Although Craig was a fluent writer who could back up every line, business book publishers wouldn't touch him for fear of offending the in dustry.
comHe once wrote satirical novels and there is a gruesome relish in his descriptions of h ow consultants get their claws into companies. The question which baffle s employees and shareholders alike is why managers let them do it. Craig replies by examining the insecurities of two types of executive: over-p romoted plodders and corporate fashion victims. When a big company threw mone y at consultants, who was hurt? He changed his mind only when he returned home to launch his book and saw what had happened to British government. For the first tim e in years, the cynical Mr Craig was shocked. He accepts that managers can get good work from consultants if they bring them in to run a tightly defined project. And of course not all consult ants are greedy charlatans. But in general, the old rule applies: a mana ger who hires a management consultant shouldn't be a manager. The last days of Tony Blair are seeing management consultants run riot. D avid Bennett, a former McKinsey partner, has been put in charge of the D owning Street policy unit, where he works alongside the astonishing John Birt. The former director general of the BBC gave tens of millions to m anagement consultants to create an efficient internal market. Predictably, administration costs ballooned - up by 140m - while staff n umbers were cut. Birt moved on to McKinsey, which had received many a pl ump cheque from him, and as a sideline provides 'blue-skies thinking' fo r Tony Blair. I remember well the young and radical Alan Milburn lashing the Tories for allowing management consultants to 'cash in'. In 1994, when he delivere d his fiery polemics, the Conservatives were giving consultants 500m a year. In his first term, the battle to 'reform' public services le ft 'scars on his back'. His second was dominated by al-Qaeda and Saddam Hussein. Time is now short and he is turning to the consultants to deliv er quick fixes. If you have any feelings of sympathy for the Prime Minister, I would beg you to murder them at once. His impatience is understandable but he ough t to know better. Every politically aware person has had ample time to l earn that consultants have been a disaster for the Civil Service. The re ason patients couldn't book appointments with GPs in advance is that the target culture is a consultants' culture ('Everything can be measured, and what gets measured gets managed,' is a typically bossy McKinsey slog an). Time and again, consultants have advised spending billions on new IT syst ems for the Immigration and Nationality Department, Passport Office and Probation Service which came in late and over-budget, if, that is, they came in at all. The Benefit Card payment system was scrapped after about 700m had been wasted, the Child Support Agency (CSA) used 450m on a s ystem that doesn't work and a 200m system for doctors to book hospital appointments for their patients managed to make 63 appointments in 2004 against a target of 205,000. Current estimates suggest that NHS computerisation may cost 30bn, five t imes its original projected cost. Meanwhile, the oncoming car crash of t he national ID card data bank promises to see 6bn or 10bn or 15bn pou nds lost in the wreckage. Craig is fascinating on why the public has lost so much money. Civil serv ants are used to dealing with each other and generally assume that peopl e they meet have the country's best interests at heart. They aren't prep ared for negotiations with consultants whose guiding principle is often how to hit the client for as much money as possible. They don't understa nd a world where the acronym Afab - 'anything for a buck' - is thrown ar ound with sniggering nonchalance. Even those who have learned the score after hard-won experience can't use their knowledge because the line fro m Downing Street is that they're hopeless while the consultants are abso lutely fabulous. The government could and should have rented proven technology from other governments or companies which had tried it out and dealt with the teething problems. But there was far mor e work for the consultants if Whitehall reinvented the wheel every time a system was needed. When the immigration computers failed, asylum seekers were left to rot in penury and racial tension rose. If I were Sir Gus O' Donnell or Gordon Brown or, indeed, Tony Blair, I would read this book a nd then invite Craig into Whitehall to reveal the many and ingenious way s in which the taxpayers have been compelled to provide welfare for the wealthy.
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