Danger, consultants coming!

Engagement of external help at times reveals how a company is mismanaged

THERE seems to be a puzzling parallel that has escaped many company-watchers. C-suite salaries are heading north as are the earnings of management consulting firms. The global consulting market is Brobdingnagian. Globally, it rakes in a mind-blowing RM1.1 trillion according to Consultancy.asia website. There aren’t any numbers available for Malaysia, but it must be a tidy sum given that the Asia Pacific market is worth a mighty RM200 billion.

Back to the puzzling parallel: why are C-suite salaries in Malaysia increasing as companies find more use for management consultants. Is not the chief executive officer the consultant-in-chief? It is true that this is not a cause-and-effect thing, but a parallel no doubt. This is no socialist editorial that seeks to check the capitalist sprawl. Neither does this Leader aim to squeeze the two extreme ends of the Malaysian salary spectrum to a just range. Far from it. Is there a just range ? Should there be one? Such healthy inquiries and scepticisms must exercise our minds, but they rarely do. We tend towards inanities. Silliness even. Our social media mirrors this national habit of ours. Perhaps a Leader on a just salary range may become necessary when our CEOs’ salaries reach a 100 or 1,000-fold of their average executives’ wage as they do in the United States. Until then, we shall hold a watching brief.

Management consultants do fill a need. With this we have no quarrel. And we advance none here. They have been doing this from time immemorial. They may be as old as management itself. Every company would want to engage one of the big five of the industry to help solve its problems. What’s stopping them is the hefty price-tag they come with. If you do not have a spare few millions, do not bother to make the call. Management consultants do seem to have the magic formula to make corporate problems go away. Or do they? Consider the case of Malaysia Airlines (MAS). Many consultants of various stripes have walked through the door of MAS C-suite, with their briefcase packed with management mantras. With Powerpoint thinking bulleted in successive slides for added effect. Such Powerpoint pills notwithstanding, MAS’ wings remain clipped. MAS has even tried two foreign CEOs, but they had taken off before the airline could. After six decades of independence, we should surely be in position to have a small pool of local talent to take MAS north. Yet we looked outside. What is more we failed, and twice at that. It will be fair to suspend our judgment on MAS until the second turnaround plan is revealed.

To be fair, not all management consultants leave piles of problems behind. Some do a pretty good job at getting rid of what at one point appeared to be intractable problems to insiders. Especially when they come bearing rich data mined from global companies across their clients’ industry. At times, a third eye may be needed to look at a problem from the outside. A different way of seeing does come up with an “aha” moment. But a first look at the problem must come from the inside. Only then a look outside should be attempted.

This is no socialist editorial that seeks to check the capitalist sprawl.