CXO

Rising above the bleating masses

In his weekly column, Tom Rodenhauser, president and founder of Consulting Information Services, follows trends in e-services and management consulting. This week features a call for industry standards for measuring performance.


We’re all pestered by telemarketers who want you to a) change long distance carriers, b) invest in a “sure” stock pick, or c) sit down for a “free” portfolio analysis. Not surprisingly, the pitch is always the same: “we’re better/cheaper/faster than the others.” Never mind the product.

The consulting industry still likes to characterize itself as a white-glove profession. Yet judging by recent efforts, the message for potential customers is very telemarketing-like.

Too many cries of “we’re better” sound like a herd of bleating sheep; nothing distinctive rises above the din. Judging quality can only be accomplished when the industry agrees to certain performance measurements.

Many consultants allude to metrics that cater to the investment community: utilization rates, sell-through business ratios, etc. Important as these numbers are in measuring a consultancy’s fiscal health, they rarely provide the kind of apples-to-apples comparisons clients crave (or understand).

There should be some universally accepted statistics to measure consulting quality. What about client value-creation ratios per consulting dollar expended? Principal-to-project time involvement? Those are painful to produce, but extremely beneficial to know.

As it stands, revenue figures are sliced and diced and applied in such ways that high “revenue per consultant” numbers are mistakenly equated with quality consulting. Such methods may be fine for determining economic viability, but they’re a poor substitute for gauging “the best.”

Heard on the street
Logistics and supply chain consultants take note of UPS and FedEx expansion plans. Both delivery companies are bolstering capabilities through acquisitions and new services. UPS, in particular, is blurring the line between service provider and service advisor. The brown guys’ IPO last year provides ample currency to snap up smaller logistic firms; two such deals were announced earlier this week. Like IBM 10 years earlier, UPS has quietly built a credible consultancy that bears watching.
Inside Consulting is written by Tom Rodenhauser as a free weekly supplement to The Rodenhauser Report. The report informs senior advisors and business executives of consulting trends and best practices. Subscription cost is $295 per year for 10 issues. Copyright 2000, Consulting Information Services, LLC. Reproduction is prohibited. Quotation with attribution is encouraged.

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