Consulting firms providing services to governments often find themselves under attack from various quarters. Rare incidents like the one involving PwC Australia make such attacks more vociferous and critical. Even well-intentioned Indian public commentators have, at times, joined this chorus. While criticisms, even if misdirected and ill-informed, should always be welcomed, it is important to analyse any perspective that critics might overlook.
When it comes to consulting firms advising the public sector, the criticisms often adopt a broad and superficial view. They tend to club disparate events across different regions and time-frames, creating a perception of consulting firms as conspiratorial entities with supernatural influence over governments. Critics often cherry-pick from a vast dataset and disregard the fact that senior government officials are extremely smart people who aren’t easily misled.
Of course, there are various factors that demonstrate why many of the attacks on consulting firms are unwarranted, given their genuine contribution to nation-building.
Varied skill sets
For starters, consulting firms provide highly skilled professionals from prestigious national and international institutions to governments. These people bring eclectic skill sets that complement the knowledge and experience of senior bureaucrats and technocrats, in both strategic projects and operational tasks. Also, many middle-level government employees become too comfortable in their jobs, stop upskilling themselves, and cease to remain in sync with the constantly evolving requirements of the job. In such cases, consultants step in to fill this gap, and senior officials come to rely more on them than their own subordinates.
Moreover, consultants are generally more willing to walk the extra mile for project requirements compared to mid or a junior-level government employee. Client centricity is always the guiding principle for consulting firms, and although aberrations may arise, these firms try their best to adhere to it. Employees undergo extensive training to internalise this principle. Such is the level of commitment for the client’s requirements that when a government delegation visits a country with a significant time difference, the consultant providing back-end support willingly sacrifices sleep to offer round-the-clock assistance for several days.
Often, bureaucrats ask for major strategic deliverables on short notice, and consulting firms oblige, sometimes going way beyond their original scope of work. In such cases, even senior people from the firm might contribute to the deliverables required on short notice and under multiple constraints. It is difficult to imagine meeting such demands without the resources provided by consulting firms.
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What do critics offer?
Questions also frequently arise regarding the nature and usefulness of strategic advice from consulting firms. Often, these questions stem from a lack of understanding about the advice’s intended purpose and the government’s needs. If one wants a perfect solution anchored too deeply in data and PhD-level complex statistical techniques, then consulting firms might not always be the best choice. In such instances, collaborating with academic institutions such as IITs, IIMs, ISB, DSE, IGIDR, or organisations such as JPAL with domain expertise could be more suitable, as governments occasionally do.
Academics really go into the intricacies of things, but this process takes time, sometimes years. Furthermore, this level of complexity is usually not even required, nor are the solutions emanating from it easily implemented. To add to this, academics probably wouldn’t even want to collaborate with governments all the time, on all issues, and for all kinds of work. A producer may want to work with the three Khans all the time. But they are rarely available and are extremely selective. Many producers are then left with no option but to rope in Akshay Kumar, who delivers a fairly decent project on short notice with a good enough probability of success. And the mighty Khans also don’t always come up with avant-garde cinema.
Similarly, strategic consulting aims to enhance existing systems considerably, rather than seeking the optimal solution, which might take years to identify. It’s the classic 80/20 principle at play here. But the proposed solutions are infrequently implemented by governments, and even then in a piecemeal manner, impacting their efficacy. Moreover, if even one advice from the thousands that consulting firms provide on a regular basis leads to some unintended consequences, then critics and public intellectuals make consultants the scapegoat without providing any alternative.
When critics do suggest something, their advice is fairly pedestrian, usually something like governments should build in-house capabilities. How these in-house capabilities can be built at the middle and low levels of government hierarchy is something they never bother to answer. The conventional wisdom of classical economics has, by now, undergone enough revisions to make everyone realise that markets aren’t perfect. However, unnecessarily interfering with them without offering concrete solutions often leads to catastrophic outcomes. The present model enables governments to hire any kind of expertise they want from the private sector. It’s worth asking: Is it even feasible to develop an all-encompassing government workforce that can work on any issue? Isn’t it a lot easier and efficient to outsource the exact requirement in the form of a project and then select the most suitable team from a variety of vendors. The answer, for any objective assessor, is pretty straightforward and obvious.
Unfounded allegations
A commentator recently accused consulting firms of promoting nepotism and creating conflicts of interest by hiring relatives of government officials. However, such allegations lack evidence and just beat the dead-horse of nepotism to make an inane point. For instance, similar nepotism can be observed in bureaucrats’ children becoming journalists, which incentivises these bureaucrats to selectively provide information to select media houses. The point is that allegations can be levelled against anything, but that doesn’t mean they are necessarily accurate.
Consultants have collaborated with private corporations long before they started working with governments. If conflict of interest and nepotism were prevalent, then private corporations would have stopped seeking consulting advice a long time ago. In theory, corporate executives could ask consulting firms to hire their relatives in exchange for projects, which may negatively impact the interests of a corporation. It is well-known that corporations always prioritise gains and profit maximisation and therefore will never continue with something detrimental to their interests. If they believe that conflicts of interest and nepotism aren’t common, logic dictates that they probably aren’t.
Almost every facet of our world has certain pitfalls associated with it, and some individuals will act inappropriately in any system. However, this doesn’t justify destroying a well-functioning system without considering viable alternatives.
The writer works with a leading global consulting firm. He tweets @mishraachyut. Views are personal.
(Edited by Prashant)