Australia's top chief executives believe consultants are useful for their outside view and specialist skills but are wary of having advisers replace staff in core operations.
The CEOs, who responded to The Australian Financial Review's annual Chanticleer CEO survey, say they often use external experts for specialised, short-term projects, or when extra hands are needed to quickly complete one-off work.
The view from the top demonstrates why Australia continues to have the third-most attractive consulting market in the world, behind the lucrative US and DACH (Germany, Austria, and Switzerland) markets. The management advisory industry is forecast to grow by about 7 percent annually, to $US6.7 billion ($9.9 billion) in the three years to 2021. One common view was espoused by Telstra CEO Andy Penn, who said he valued outsiders challenging his thinking.
"I think there’s a real benefit to be had from having people outside of the business challenge your thinking and push you to make difficult decisions," he said.
"We work with consultants when we believe they can add a unique value or perspective to what we’re doing." The telco brought in strategy consulting firm McKinsey to help shape its Telstra2022 strategy, a broad-ranging plan to cut staff numbers, simplify management and hive off its infrastructure assets into a subsidiary. ANZ chief executive Shayne Elliott also believes consultants can be beneficial.
"There is a place for consultants, they can provide perspective, challenge, and intellectual grunt," he said. "We have and continue to use consultants for a range of activities. The most high-profile case we’ve had recently was when we used consultants [including Boston Consulting Group] to help us transform our workplace under more agile work practices.
"As with most things, it’s making sure you use the right consultants on the right work to make it worthwhile." Francesco De Ferrari, head of AMP, said he valued the "different thinking" of external advisers – but not for "business-as-usual work".
"External consultants can provide value when they bring different thinking and skills into a business or provide a more flexible workforce to a project," he said. "But when the project is complete, the consultancy should finish and the [intellectual property] and the skills should be retained in the business. It’s not value-creating to continually revert to external consultants to deal with business-as-usual work.
"We are using consultants on a range of projects including supporting customer remediation to deliver a more efficient process for the customer." AMP has been a big user of consultants, both before and after the banking royal commission, and Mr De Ferrari has used Bain to develop his strategy to save the embattled group. Macquarie Group CEO Shemara Wikramanayake said the investment bank mainly used consultants for specialist areas such as technology projects. "We use consultants in niche areas such as aspects of technology where they bring very specialist skills and expertise, and that’s usually on a short-term project basis," she said.
Sourced from the Financial Review - written by Edmund Tadros