When clients bring in consultant,s they not only want to leverage their knowledge and experience but also their brand. From a consulting firms perspective, projects  come with the policy that consulting firms don’t talk about their clients.

This allows clients to leverage the consulting project for internal and external communication. Most often in cost cutting projects, the CEO knows very well that she needs to reduce costs – that’s why they bring in consultants in the first place. Mainly to help them detail the required cost cuts and which divisions should be targeted. This is often assessed based on an industry benchmarking, comparing the cost structure of the client to best-in-class peer companies. As a CEO, you leverage the brand and reputation of the consulting firms to your advantage. A CEO would never say to her employees:

The internal reputation of the the CEO would be ruined and she can be happy if the employees are not waiting for her with pitchforks. However, she can position it differently:

All of a sudden, the culprit is not the management hiring like crazy in the past years but the consulting firm suggesting getting the costs in order. This example is of course heavily simplified but this is basically how it works. CEOs communicate difficult measures (no matter whose fault it was) as a recommendation from the consulting firms. And the consulting firm is absolutely fine with this as clients are implicitly paying for this service. Of course, someone affected by such a job cut or colleagues of the person that were let go will absolutely detest the consulting firm and tell all their friends how horrible the consultants are.

But this actually has little implication on the future project flow of the affected consulting firm. Management at the client values this service and management at competitors knows perfectly well that this is common practice. And if the cost cutting went smoothly with the reputation of the  management in tact, this can actually be seen by other firms in the industry as great work by the management of the client and the consulting firm.

And now you might ask why there are no positive projects communicated? This has multiple reasons.

First, if consulting firms were to openly communicate their projects, it would undermine the great job by corporate executives. Imagine if a consulting firm publicly communicates the following:

If a consulting firm were to do that, the senior partner would receive a call from the client CEO right away. And the senior partner wouldn’t even have to put his phone to her ear – she would hear the shouting right away. This example is of course simplified but as a client, your accomplishments are your accomplishments, even if you were supported by consulting firms. Similar to the difficult projects we mentioned earlier, clients have the right to decide what is communicated. And if a project is a success, the client should take all the glory.

This strengthens the trust-based relationship between the client and the consulting firm leading to potential future projects. Who would you rather work with as a client: a consulting firm that allows you to decide what is communicated, allowing you to control positive and negative news or a consulting firm that takes all the glory for themselves?

Second, selective (mostly pro bono) projects are communicated yet the public doesn’t pay too much attention to them. Go ahead and google them – you will find that McKinsey, BCG & Bain all communicate pro bono projects on their homepage and you will also find news articles on them. This pro bono work often revolves around helping NGOs in their efforts.

However, this usually does very little to improve the reputation of consulting firms. Referring to the previous point, if you are working in a company affected by job cuts where a consulting firm was involved, you will likely not care about all their pro bono work but just be pissed about the fact that people are let go. And all of this apparently just based on the recommendation of some fresh college grads that are playing consultant.

Third, positive projects are not communicated publicly but they are communicated in Letter of Proposals (LOPs) and pitches. Most often, they are communicated sanitized, meaning that the client is anonymous. To give you an example:

In an LOP, you would of course only list recent projects that are closely linked to the actual topic of the proposal. And many times, consulting firms also offer clients to talk to the client where the respective project was conducted. But this is only the case if the client of the past project agrees. And most often, especially with longstanding clients, they are more than willing to recommend the consulting firms and talk about the exact nature of the project.

When discussing the bad reputation of consulting firms, we cannot ignore the scandals of the recent years. They added fuel to the fire when it comes to the already bad reputation of the MBB and Big 4 firms. We will not go into detail on the scandals due to legal reasons and as they have been widely covered by the news.

We condemn all these scandals and they definitely hurt the consulting industry and paint a picture of consulting that is, in some cases, far from reality. The news on the opioid scandal involving McKinsey is just a recent example. The work McKinsey did is horrible – there is no question about that. But the news often portrays it as if McKinsey is a family business where every consultants knows what’s going on in each industry. Many consultants in our team work or have worked at McKinsey and we all heard about the scandal from the news (and internal mails after the scandal broke). Our colleagues that worked in the same region in a different industry had no clue about the work we did and even colleagues working in pharma had no clue what was going on. McKinsey has Chinese Walls in place so you only talk about projects internally on a need-to-know basis. If you are not working with me on a topic or for the same client, there is no need to share with you what I am working on. It could be the case that you are working on the energy transition at McKinsey and now come under scrutiny because some idiots at McKinsey thought it is smart to try to push the sales of opioids. Everyone involved in this scandal should be fired – no doubt about that. But condemning all the work McKinsey does due to this scandal is probably also the wrong approach.

But the scandals are definitely a major reason why consulting has a bad reputation. And for some industries and practices rightfully so.