Consulting in the magnetic middle

If you give households feedback about how energy-efficient they are, a curious thing happens. Peer pressure means that those who aren’t particularly efficient tend to become more so, but at the same time the most efficient households become less so–they become complacent. It’s a phenomenon researchers have called the “magnetic middle”, that greater information and transparency drives average behaviour.

Now that we’ve collected several years’ worth of clients’ perceptions data, we’re starting to see a similar trend around the quality of consulting work done. As part of our ongoing research programme, we ask clients to rate the quality of work done by individual consulting firms they’ve used. The blue line in this chart shows the average percentage of US clients we surveyed in 2015, 2016, and 2017 who judged the quality of work done by consulting firms to be “good” or “very good” (around 75% in 2017). The green line shows the best-performing firm in each year (not necessarily the same), and red, the worst one. Over this timeframe, the difference between the green line and the red line has shrunk from 90 percentage points to 25. As always with data, we’ve got to be careful. You could argue that the top and bottom firms are outliers, the two extreme points of the scale. And you’d be right: The majority of firms fall into a narrower band–but the same pattern is true here, too, as the shaded blue area indicates.​

Magnetic middle.png

So, what’s going on here? We’ve spent the last three years talking to both clients and consultants about the results. By publishing this data we’ve been trying to help create a consulting industry that’s more transparent (to the benefit of all those involved in it: clients, partners, and employees), but we certainly can’t take credit for any step change. Much more likely is the ever-growing proportion of clients who used to be consultants–the consulting diaspora, if you will.  What they bring with them is a huge amount of knowledge about what consultants do, and the quality of work they provide. More informed than clients who haven’t worked in the consulting industry, they’re perhaps more sympathetic to the difficult work consultants do, or better at managing consulting projects (so are less likely to say that the work done is poor), but also more cynical (so less willing to give the highest scores).

What this means, though, is that it’s becoming harder for any consulting firm to differentiate itself based on the quality of work it claims to do.