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Rising Need of Ethics Code in Consultancy Space

By Shantanu Garg, DGM, Consumer Insights and Brand Development

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Shantanu Garg, DGM, Consumer Insights and Brand Development

With the rise of MNCs and constant exposure to the world business environment, there has been a growing need of being updated with latest and world’s best practices to survive and grow. Customer expectations are at the highest ever in history of business itself and markets are plagued with choices. The need of consultants has never been so dire.

Who’s a Consultant? Oxford defines it “A person who provides an expert advice professionally”. Come to think of it, if not for words expert and professionally, everyone we work with is a consultant. Metaphorically, I’d like to think of consultant as a doctor or therapist, approached out with hope to either (i) to resolve a concern, or (ii) improve/ improvise current performance. He is expected to hear the concern, understand need, explore and come back with plethora of options, proposing ‘solution’ which best suits client’s need, while defining ways to implement it in a given timeframe, for a fee.

Ethics is a complex issue. Ethics are about moral evaluations of decisions as to whether they are right or wrong, basis the socially/culturally accepted principles of behavior. I won't highlight the well-trodden paths of internal controls, reporting mechanisms, billing processes, or other hygiene issues. What I will try to cover is a huge potential liability but rarely discussed: the internal and external need of ethics in consultancy.

Companies, large and small have problems. When it comes to sharing such challenges with people, it is usually believed that they are engaging in clever PR rather telling truth and is subject to bias of personal prejudices, egos or internal politics. Thus organizations view consultants as saviors and expose their deepest secrets. This flavored with the pay makes consultancy an even more responsible obligation, socially and morally. Consultants' value derives from their independence, objectivity and expertise. Management consulting is a trust business. With respect to ethics, this can go two ways (1) consultants themselves can compromise ethics, or (2) consultants create and strengthen ethics.

First, consultants are given implicit authority and credibility by being asked to help solve a problem or opportunity. Ethical lapses in client organizations are multiplied when consultants themselves have conflicts of interest, compromise standards or misrepresent their capabilities. Technically competent but ethically compromised advice may be worse than incompetent but ethical advice. Recently a reputed consultancy team presented a case to us, which looked rather too-simple to address the need. On being questioned, we realized they wanted to provide solution in sync with biz team’s suggestions and not cause any disagreement. While providing a client oriented solution is great, but providing right and required solution is more critical. Think of a doctor giving a cancer patient Asprin for cancer-cure, just coz the patient didn’t like the flavor of proper medication.

Cases are heard of consultants limiting scope in order to get next project within biz or not offering advice or viewpoint when required to avoid difficult situations. Meeting the deliverables and within timelines is important however ensuring feasibility, sustainability and alternative impact is more critical.

Second, instead of creating ethical problems, consultants who are committed to ethical practices, have an opportunity can create or significantly strengthen a client's ethical culture and practices. Management consultants have the privilege of being able to see whole organization because they are given broad access to information, people and activities. Their independence and objectivity, combined with a commitment to observe and practice strong ethics, allows them to see the implications of existing or imminent ethical failures and mitigate them. Organizations that retain consultants with a solid understanding and capacity for ethical practices in management are a powerful resource to increase trust among constituents.

Both clients and consultants live or die by their reputation and trust others place in them. The ethical impact on the culture and practices of the client organization should be at the top of the list for selecting and effectively using consultants. Developing a strong ethics capability should be at the top of the list for a consultant's professional development.

What also needs to be noticed is that we can usually configure ethical consequences that go way beyond the borders of a specific relationship and of its direct impacts (recognition of logistical exclusivity can induce firm to financially exploit customers) and often it isn’t even possible to define the ethics of the same counterpart without overcoming its finalism (it is difficult to evaluate output without analyzing its actual use: ‘gun’ can be used as weapon or for defensive purposes). In a nutshell: on one hand, having ethical business behavior in a consultancy perspective may not have a great ethical value (being hygiene). On the other side, an exhaustive evaluation is not easy.

Amongst the consultancy world it is evident that few operators market themselves on the basis of their ethical approach to work. Doing this they build a character for themselves, akin to the virtue theory idea, thus creating a positive repo-n-recon of operating with integrity, for the client’s benefits. One could ponder who the sub-groups are, within the client organizations who receive this benefit but that would indicate a certain cynicism and miss the real issue. This is the belief amongst many consultancies incubates a need to distinguish themselves from the rest of the community on the basis of their ethical approach.

Considering that ethical behavior is voluntary and highly competitive markets, it is re-assuring to consider the foundation of a good consultancy business in future, as not just being about the bottom line, but about creating a sustainable experience (not product, services or just solution) that meets the needs and delights clients, while displaying a sincere and responsible approach to the community of stakeholders and society in general.

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