Companies must have checks and balances in place to ensure that consultants
are hired based on merit and value, and not simply because they have
unfettered access to a senior executive due to the fact that he/she is an
alumni of the consulting firm in question.

All major consulting firms carefully nurture their alumni relationships, that is, relationships with former partners or consultants who left to work as influential managers or executives in companies or in the public sector. These alumni are often key contacts for securing business at new clients or extending relationships at existing clients.



But do boards or the executive team ensure that these relationships do not undermine the interests of their company? Is there a conflict of interest if a staff member who is an ex-consultant hires their former consulting firm for assignments within their new organization?



There is an argument that the ex-consultant understands the strengths of his former firm, knows who to trust, and therefore who is a good fit for a key strategic or operational initiative. However, there are a host of drawbacks of this situation as well. By hiring the ex-consultant, the company is already benefiting from the knowledge base and problem solving approaches of his/her former consulting firm. Would it not be better for the company to be challenged by a different firm which could introduce alternate perspectives and new ideas to produce a stronger combined business result?



There is also a risk of familiarity breeding contempt. Often an engagement is awarded to the manager or executive's former firm without a proper selection process--the consulting firm essentially gets a free pass. Have they provided their best consultants? Have they submitted their best price? Are there sufficient metrics in place to measure performance? Will sufficient rigor and demands be applied by the executive sponsor when managing former colleagues? Will the ex-consultant cover up for any underperformance so as not to reflect badly on their selection decision?



Executives who are former consultants may often prevent any discussion in the organization on the value of the results delivered by their former firm. This bias may even extend to their predisposition to use consultants in general, taking advantage of their position to stifle the debate within the management ranks about how best to extract value from consultants. In this case they are focused on protecting the interests of their former employer, possibly at the expense of the interests of their current employer.



Such situations often result in millions of dollars being spent on the executive's former consulting firm across multiple projects with little in the way of business results to show for it. Many in the organization recognize the underperformance but it is not discussed as no one in the organization wants to challenge the executive--thus there are no safeguards in place to protect the interests of the company.



We believe that organizations have a responsibility to enact policies to ensure that senior executives, sourced from global consulting firms, do not engage their former consulting employers for a defined number of years without a proper bidding process, and that such bidding processes should be conducted by someone other than the newly hired, former consultant. Of course it should also be expected that the executive would not be providing back channel communications to aid his former peers.



Perhaps if such policies were in place, consulting firms would rely less on easy wins from nurturing those alumni relationships and would have to focus more on winning work at the company based purely on the merits of their proposals and capabilities.



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