Can consultants demonstrate their quality only by their performance? It comes easy to say that those who succeed on the job will be sure of getting plenty of repeat business.
Yet, assessing individual consultants’ performance is harder than the question above. Things have been balanced too far in favour of sales and sell-on and against quality. Today, there are very few clients who welcome and reward a consultant who says what they don’t want to hear.
The ideal consultant is a “critical friend” to clients. Needless to say that it is possible to fall short either by being too abrasive or too friendly.
Judging consultants’ performance is riddled with such complexity. The emphasis on winning repeat business is combined with the struggle of assessing and agreeing on outcomes.
It is hard to claim credit for complex, long-running, cross-disciplinary projects. Consulting is, after all, a “team sport” where collaboration is vital. In many cases, appraisal is complicated by the fact that consultants may spend years on a client engagement, which is run by a manager different from the one who assesses them.
The big accountancy firms, for which consulting has long been a more lucrative business than audit, face the added difficulty of having to judge staff in the two main operations by different criteria; that can lead to infighting and jealousy. Audit partners think of themselves as “reputation creators” and consultants as “breadwinners”.
The myth of meritocracy
Partners also fall prey to a self-sustaining “myth of meritocracy” that works against reform: “Anyone who rises to the top believes he or she has risen there on merit and automatically believes it’s a good system that has found his or her true potential. As if to claim: “justice has been served”. In pure partnerships, of course, the partners also own the business, creating a further obstacle to change.
Until the recent past, some of these drawbacks used to be solved by the “lockstep” system, whereby partners were paid according to seniority rather than by the fees they brought into the group. Lockstep had its own problems, though, including the risk of freeriding by sluggish partners. Large consultancies — like many of their counterparts in law and accounting — have tended to vary, dilute or even abolish lockstep’s rigidities and allow more of an “eat what you kill” approach, closer to bonus systems used by corporate clients.
A third way, which appears to be the most sustainable approach, is not just a mix between tenure- and profit-based rewards. Consultants are assessed on three dimensions: client outcomes, people outcomes, and intellectual property and expertise. Staff are asked to report, on a rolling basis, whether they would recommend others to work on their project. It’s basically a “net promoter score” (used to gauge whether customers would advocate a particular service or product) to monitor where there may be difficulties with specific clients, teams or individuals.
Top consulting companies assess their consultants against a framework consisting of technical skills, sector expertise and “core consulting and leadership”. This methodology would ensure avoiding any unconscious bias in its appraisal system. It has also re-emphasised the importance of behaviour and values.