Corporations should demand that outside consultants not only provide advice, but also get involved in implementing the strategies they develop for businesses, according to William W. Bain Jr., president and founder of Bain & Co., the nation's biggest consulting firm specializing in corporate strategy.
Corporations also ought to demand that consultants agree not to advise competitors simultaneously since this would be a conflict of interest, Bain told a group of alumni of Columbia University and the University of Pennsylvania's Wharton School of Business at a breakfast here today.
"There are a lot of consulting firms that wouldn't be interested in taking on business under these conditions," Bain said, "and most consulting firms work with competitors. But the heart of consulting is to give a business a fact-based strategy that will give them a sustained competitive advantage, relying on a company's relative strengths.
"If a consultant is selling advice to everybody in an industry, how can he give any client an edge?"
Bain agreed with widespread criticism of management consultants who prepare lengthy reports and then disappear, leaving companies confused about how to implement these proposals. He believes strategy consultants should concentrate on fact-based research, strategy development and implementation, rather than preparation of thick, detailed reports that gather dust on the shelves of corporate offices.
Bain said too many consultants rely on impressions and anecdotes rather than facts to develop strategy, leading many executives to express disappointment rather than enthusiasm for strategy consulting.
He said that consulting is a highly visible way of helping organizations match their strengths with opportunities, and that it can succeed if the chief executive officer personally gets involved in the process.
Bain's firm, based in Boston, includes more than 500 consultants who concentrate on blue-chip corporations. The firm had about $70 million in revenue last year.