Specialists could restore trust in consultancies following state capture damage

SINCE 2017, South Africa’s management consultancy and business advisory industry has been under incredible pressure. With big players such as McKinsey, Bain, and KPMG implicated in state capture controversies, the model itself has been called into question.

And, according to a recent study by Research and Markets, these scandals have combined with tough economic conditions and consulting expenditure setbacks to put pressure on a traditionally lucrative industry.

But, the same report suggests a wave of mid-tier and specialist consultancies could capitalise on the crisis and restore trust in the model.

It’s easy to see why.

For a while, having the people who did your auditing also do your business advisory and take care of your marketing made sense to C-suite executives. After all, they knew your business better than anyone else, what you could afford, and where you should cut back, so why wouldn’t you trust them?

As revelation after revelation has shown, however, this hasn’t turned out to be the case.

Just ask the people trying to fix Eskom and any number of other stateowned enterprises (SOEs) if KPMG, McKinsey, and Bain & Company really had their best interests at heart when they took massive fees at the height of state capture.

Even ignoring the controversies that have rocked the industry, it was inevitable that flaws would emerge in the big consultancy model.

While many of the big consultancies have brought in relevant expertise (frequently through acquisitions), they often find it difficult to properly balance all the services they offer.

This is especially true when the project leaders from the consultancy lack understanding of one or more of the available services.

Take the digital marketing arena, for example. Here, technologies like augmented and virtual reality are becoming more prevalent and media buying is advancing so quickly that even specialists have to work hard to keep up.

If you’re a project leader or consultancy lead, it could hardly be more difficult to keep up with these changes as well as every other specialisation in their team.

Unlike some of their overseas counterparts, South African consultancies simply don’t have the resources to bring in this kind of expertise at scale. As a result, specialists are the only viable way forward.

Specialist consultancies also don’t require massive one-off fees and can be brought in as and when they’re needed.

If you want to build up your team’s digital marketing capabilities, for example, a specialist consultancy can help you do that quickly and efficiently without trying to rationalise your hiring practices and run a company-wide audit at the same time.

In a tough economic environment, it makes a lot more sense to tackle things one at a time.

And because you can quickly tell whether what they’re doing is working, you aren’t locked in to expensive, long-term contracts.

In fact, some of the braver specialist consultancies base their payment models on the results they achieve for their clients, rather than a flat fee.

This not only benefits the client, but goes a long way to helping restore trust in the consultancy model.

There’s clearly a lot of work to be done, but with the right results, consultancies could again help companies be the best they can be.