The Consultant Industrial Complex

Let me tell you about a meeting I sat through.

A Big Four consulting firm had been engaged to develop a "digital transformation strategy" for a government agency. Six months of work. Millions of dollars. A team of fresh graduates supervised by partners who appeared occasionally to nod wisely.

The final presentation was 200 slides. Frameworks on top of frameworks. Maturity models. Heat maps. Quadrants. A dizzying amount of intellectual-looking material.

The recommendations? Buy a bunch of enterprise software. Restructure the organisation around vendor-defined processes. And (here's the kicker) engage the same consulting firm for a multi-year implementation program.

The strategy to solve the agency's problems was: pay us more money to help you buy things and change your org chart.

No capability was built. No knowledge was transferred. No one in the agency could have produced those recommendations themselves, but more importantly, no one could implement them without ongoing consultant support.

That's not consulting. That's dependency creation disguised as strategy.

Welcome to the Consultant Industrial Complex.

The Business Model

Let's be honest about how the consulting industry actually works.

Consultants are not paid to solve your problems. They're paid to work on your problems. There's a difference.

Solving your problem means you don't need them anymore. Working on your problem means they bill hours, deliver documents, and position for the next engagement.

The ideal consulting client, from the consultant's perspective, is one who:

• Has problems that are never fully solved
• Lacks the capability to evaluate recommendations
• Keeps coming back for more
• Refers other clients with similar characteristics

This isn't conspiracy. It's economics. Consulting firms are businesses. They optimise for revenue. Revenue comes from billable hours and ongoing engagements. Permanently solving problems is bad for revenue.

I've watched this play out across twenty years. The organisations that keep engaging consultants are rarely the ones that got better. They're the ones that got dependent.

The Dependency Cycle

Here's how the cycle works:

Phase 1: The Initial Engagement

An organisation has a problem they can't solve. Maybe they lack expertise. Maybe they need political cover. Maybe they just don't know where to start. They bring in consultants.

Phase 2: The Assessment

The consultants spend weeks or months "assessing the current state." They interview people. They review documents. They observe processes. They develop an intimate understanding of how your organisation works.

You pay them to learn your business.

Phase 3: The Recommendations

The consultants produce a report. It's impressive-looking. Lots of frameworks. Lots of best practices from other clients (anonymised, of course). Lots of recommendations that (remarkably) require consulting help to implement.

The recommendations rarely include "build internal capability to do this yourselves." That would be bad for future revenue.

Phase 4: The Implementation

You can't implement the recommendations alone. You don't have the expertise. So you hire the same consultants (or different ones from the same firm) to help with implementation. More months. More millions.

Phase 5: The Ongoing Support

The implementation creates new dependencies. Systems you don't fully understand. Processes designed by people who've left. Knowledge that lives in consultant documentation rather than employee heads.

When problems arise (and they will) you call the consultants back.

Phase 6: The Next Transformation

A few years later, leadership changes or the world shifts, and suddenly you need a new transformation. Who do you call? The consultants who "understand your organisation" from the last engagement.

The cycle repeats. The dependency deepens.

The Knowledge Extraction Racket

Here's something that should enrage you: consultants learn more from you than you learn from them.

Think about what happens during a consulting engagement:

The consultants interview your best people. They extract tacit knowledge that's never been documented. They learn your processes, your problems, your politics. They see your data. They understand your competitive position.

Then they take all that knowledge, anonymise it, and use it for the next client. The "best practices" they bring to your competitors came from clients just like you. Your hard-won insights become their intellectual property.

What do you get in return? A slide deck. Maybe some documents. Recommendations you can't implement without them.

You paid them to extract your institutional knowledge. They walk away smarter. You stay the same.

The Credential Trap

"But they bring expertise we don't have!"

Do they?

Let me describe the typical consulting team on a "digital transformation" engagement:

The Partner: Shows up for the pitch. Appears at key meetings. Actually spends maybe 5% of their time on your project because they're managing twenty others. Has impressive credentials but hasn't done hands-on work in a decade.

The Manager: Runs the day-to-day. Experienced at managing consulting projects. May or may not have relevant domain expertise. Their job is to keep the project on track and position for expansion.

The Associates: Do the actual work. Often two to three years out of undergrad or MBA programs. Smart, hard-working, and almost certainly less experienced in your domain than your own employees.

You're paying $500/hour for work done by 26-year-olds, supervised by people whose expertise is consulting rather than your actual problem.

The credential you're buying is the firm's brand, not the team's capability. And the firm's brand was built on successfully selling engagements, not necessarily on solving problems.

The Transformation Theatre

I mentioned this in my piece about IT procurement offices, but it deserves expansion.

"Digital transformation" has become a consulting industry unto itself. Every large firm has a practice. Every medium firm wants one. It's a multi-billion dollar market built on convincing organisations they need to transform and then selling them transformation services.

But look at the actual outcomes.

How many organisations have gone through "digital transformation" engagements and genuinely transformed? How many can now do things they couldn't do before, not because they bought new software, but because they developed new capabilities?

In my experience: almost none.

What I see instead is transformation theatre. The appearance of change without the substance. New systems that work like the old systems. Reorganisations that shuffle boxes without changing behaviour. Strategies that describe a future state without building the capability to reach it.

The consultants declare victory: "we delivered the strategy," "we implemented the system," "we achieved go-live." The organisation is no more capable than before. Often, it's less capable, because institutional knowledge was disrupted without being replaced.

But the consultants got paid. And they're already positioning for the next engagement.

The Perverse Incentives

Let me be specific about the incentive problems:

Consultants are incentivised to find more problems, not solve existing ones.

Every assessment expands scope. Every implementation reveals "additional opportunities." Every project creates follow-on work. The consultant who scopes a project narrowly and solves it efficiently is failing at their job (their job being to grow the account).

Consultants are incentivised to recommend purchases, not build capability.

Vendor partnerships and referral relationships are significant revenue streams for consulting firms. When a consultant recommends Salesforce or Workday or ServiceNow, that's not necessarily because those products are right for you, it might be because the consulting firm has an implementation practice or a referral arrangement.

More importantly: implementing vendor software requires ongoing consulting support. Building internal capability does not.

Consultants are incentivised to hoard knowledge, not transfer it.

Knowledge transfer threatens future engagements. If your people fully understand the systems, processes, and strategies the consultants developed, why would you hire consultants again?

I've seen consultants actively resist documentation. I've seen them hold key knowledge in their heads rather than writing it down. I've seen them structure implementations so that their ongoing involvement was required.

This isn't universal. I've worked with a handful of consultants over the years who I'd recommend to anyone: people who genuinely transferred knowledge, who pushed back on scope creep, who actively worked to make themselves unnecessary. They exist. I'm still in touch with some of them.

But they're rare. And they often struggle within the system, because the economic incentives push in the opposite direction. The consultants who build dependency get promoted. The ones who solve problems efficiently and leave get managed out or go independent.

Consultants are incentivised to tell you what you want to hear.

Consultants who tell clients uncomfortable truths lose clients. Consultants who validate existing assumptions and avoid political minefields keep clients.

The most valuable thing a consultant could do is tell you that your strategy is wrong, your assumptions are flawed, and your favourite initiative is a waste of money. But that's career suicide. So instead, you get recommendations that align with what leadership already wanted to do.

What Real Advisory Looks Like

I'm not saying all consulting is worthless. Sometimes you genuinely need outside expertise or capacity. The question is whether you're building capability or dependency.

Here's what honest advisory looks like:

Time-limited by design. A real advisor wants to work themselves out of a job. The engagement should have a clear end point where you can continue without them. If the proposed engagement is open-ended or automatically renews, be suspicious.

Focused on knowledge transfer. The goal should be your team understanding and owning the solution, not the consultant understanding and owning it. Every engagement should leave your people more capable than before.

Aligned with your success, not their revenue.Ideally, the advisor's compensation is tied to your outcomes, not their hours. At minimum, they should be able to articulate how their success is defined by your success.

Honest about limitations. A real advisor tells you when they're not the right fit. They recommend against engagements that won't create value. They push back on scope expansion that doesn't serve you.

Building, not just advising. The best advisors don't just tell you what to do, they help you build the capability to do it. They train your people. They create systems and processes you own. They leave behind more than documents.

Ask your consultants: "What will we be able to do after this engagement that we couldn't do before, without your ongoing involvement?" If they can't answer clearly, they're selling dependency, not capability.

The Captive Client

Let me describe a pattern I've seen too many times.

An organisation becomes a captive client. They've been through multiple consulting engagements with the same firm. The consultants know their systems, their politics, their history. Switching to a different firm would mean starting over.

So they stay. Even when engagements underdeliver. Even when costs escalate. Even when they suspect they're being taken advantage of. The switching costs feel too high.

Meanwhile, the consulting firm treats them as annuity revenue. Low effort, reliable income. Why push for innovative solutions when the client will accept mediocre ones? Why transfer knowledge when dependency is more profitable?

The captive client stops even evaluating alternatives. They assume they need consultants. It doesn't occur to them that they could build the capability to solve their own problems.

I've met executives who've spent their entire careers in captive-client organisations. They literally don't know how decisions get made without consultants. They can't imagine operating independently. The dependency has become part of the culture.

This is the end state of the Consultant Industrial Complex: organisations that have lost the ability to function without external support.

The Alternative: Build Capability

Here's the uncomfortable truth: most of what consultants do, you could do yourself, if you had developed the capability.

The assessment? Your people know your organisation better than any outsider. They just need frameworks and permission to analyse it.

The strategy? Your people understand your market, your customers, your constraints. They just need time and space to think strategically.

The implementation? Your people will live with the results. They're more motivated than any consultant to get it right.

What you might actually need is:

• Training and skill development for your existing team
• A small amount of outside expertise to fill genuine gaps
• Time and space to think, which means protecting your people from the tyranny of the urgent
• Permission to fail, so they can learn from experiments

None of these require multi-million dollar consulting engagements. All of them build capability that compounds over time.

Every dollar you spend on consultants is a dollar you're not spending on building your own people. Every problem you outsource is a problem your team doesn't learn to solve. Every dependency you create is capability you'll never develop.

How to Break Free

If you're trapped in the Consultant Industrial Complex, here's how to start breaking free:

Audit your consultant spending. How much have you spent on consultants over the past five years? What do you have to show for it? What capability did you build? If the answer is "not much," you have a problem.

Question every engagement. Before approving any consulting work, ask: "Could we build the capability to do this ourselves instead?" If yes, why aren't you? If no, what would it take?

Demand knowledge transfer. Every engagement should include explicit knowledge transfer deliverables. Your people should be able to maintain and extend whatever the consultants build. If the consultants resist this, you know what they're actually selling.

Start building capability now. Hire people who can build, not just people who can manage vendors and consultants. Protect their time. Let them fail. Create the internal capability that makes consultants optional.

Use advisors, not consultants. When you need outside help, look for people who are explicitly trying to work themselves out of a job. Shorter engagements. Focused scope. Knowledge transfer as the primary deliverable.

Break the captive relationship. If you've been with the same firm for years, force yourself to evaluate alternatives. The switching costs are usually lower than you think, and the fresh perspective is often more valuable than the historical knowledge.

The Honest Conversation

I run an advisory practice. I could pretend I'm completely different from the consultants I'm criticising. But that would be dishonest.

I also want to be fair: I've learned from some exceptional consultants over the years. People who showed me what real knowledge transfer looks like. People who told clients hard truths at the risk of losing the engagement. People who celebrated when their clients didn't need them anymore. They shaped how I think about advisory work.

The tragedy is that those people are exceptions. Many of them left the big firms because the incentive structures made it impossible to do good work. The ones who stayed often got pushed aside in favour of partners who were better at growing accounts than solving problems.

Here's what I try to do differently:

I don't want long-term engagements. I want to help you build capability and then leave. My success is defined by you not needing me anymore.

I don't recommend things I wouldn't build myself. I'm a builder. When I advise, it's based on what I've actually done, not frameworks I learned in business school.

I tell you uncomfortable truths. If your strategy is broken, I'll say so. If your favourite initiative is a waste of money, I'll say so. You might not like it, but you'll respect it.

I'm obsessed with knowledge transfer. Everything I do should leave your team more capable. If you can't continue without me, I've failed.

Is this the right model for everyone? No. Am I perfect at it? No. But I think it's more honest than the industrial complex that extracts value while pretending to create it.

The Question to Ask

Next time someone proposes a consulting engagement, ask this:

"When this is over, what will we be able to do that we couldn't do before, without your ongoing involvement?"

If they can answer clearly and specifically, maybe it's worth doing.

If they can't (if the answer is vague, or involves "ongoing support," or describes deliverables rather than capabilities) you're not buying solutions.

You're buying dependency.

And there's a whole industry designed to sell it to you.