In reporting this potential breakthrough last week, the headline chosen by the Financial Times, “Are consultants really utterly pointless?”, is a symptom of the problem. It’s easy to get attention by saying how awful consultants are, even when the research cited is saying the opposite. In fact, the article, which is based on research by two academics in conjunction with the National Bank of Belgium, and was published by the National Bureau of Economic Research, analysed two decades worth of VAT records and other data and concluded that the results were “in line with a productivity-enhancing view of consulting”.  

So, why is there a problem with value in consulting? 

The obvious answer is that it’s not always easy to see, let alone measure, the value consultants add. Our own research highlights a stubborn gap between clients’ positive perceptions of the quality of the expertise consulting firms bring and the tangible impact on the business that they leave behind. Roughly four out of five clients say quality is high or very high, but only around 50% say that consultants create twice as much value or more for the client’s business than they take in fees. Expertise is easier to see, it’s what clients are largely buying, and it’s what firms are largely selling. Buying and selling the delivery of value is much harder. Although the use of contingent pricing—which would include value-based payment terms—is on the rise, clients we interview often complain about the complexity of such arrangements and how reluctant consulting firms are to offer them. (For the record, consultants say pretty much the same things about clients.)  

Another explanation lies in the relationship between value and price. The standard question we ask is whether a firm adds value over and above the fees it charged. When we separate the two and ask simply about the impact of a project, we get a more positive response. In research we’ve carried out for our forthcoming report on the value of consulting, 93% of clients, asked about a specific project, said that it had delivered long-term, positive change for their organisation. Putting this alongside our other research suggests that clients do think consultants are creating value but they’re not sure that the level of value is commensurate with the price they paid. That’s reinforced by our data on pricing, which has consistently shown that a significant minority of clients (31% this year) expect fee rates to fall.

However, the difference between our long-standing question about value and this latest research may suggest a less obvious, but perhaps even more fundamental, problem with value. Our new, more positive data is based on quizzing clients at length about a specific project that they were directly involved in, while our on-going research asks a more generic question about value. This difference between the general and the specific is a key feature of prejudice: “I hate all redheads, but the family of redheads next door are really great”. Contrary to popular thinking, familiarity breeds favourability, not contempt.  

Again, we can see evidence of this in our data. A firm’s current clients are more likely to rate the value that a firm delivers positively than its prospects (which, for these purposes, is defined as someone that knows the firm but isn’t currently working directly with them).

This takes us to a fourth and final reason why there’s a problem with the value of consulting. Because value is more likely to be recognised by clients who’ve worked closely with a firm on a specific project, it’s subjective. It’s determined as much—if not more—by what an individual client has gained as a result of the consultants’ work (internal kudos, for instance) as by the economic value created for the organisation that bought it. And it’s this, combined with a certain amount of arrogance on the consulting side, that leads people in general to see a conspiracy in which corporate fat cats and the consultants who work with them are in collusion to make money at the expense of workers and taxpayers.  

Analysing Belgian VAT returns is a very, very small step in countering these perceptions. But it will take a step-change in transparency and investment by the consulting industry to close the gap between clients’ views on quality and value. 

What can firms do next? 

To close the gap between clients’ expectations and experiences of the value your firm delivers you’ll need to answer some fundamental questions: What does value mean to your clients? How can you create it? How can you talk about it in a way that helps you maintain a long-lasting, profitable relationship? We’ll be tackling these challenges in our upcoming Emerging Trends report on creating the value that really matters to clients. It’s due out at the start of September 2025. Contact us to register your interest.