Ethics in consulting - the courage to speak truth to power
Deloitte’s role in the Steinhoff debacle, the involvement of KPMG in Gupta-related scandals as well as McKinsey’s and Trillian’s dealings with Eskom have become pin-ups for how the breakdown of ethics in South African businesses, and within the companies doing the consulting, can erode company stakeholder value and public confidence.
As McKinsey later timidly stated, it all stemmed from “errors of judgement”.
These extreme - and rare - incidents of alleged criminality are isolated, thankfully, and there is a chasmic difference between a consulting firm operating with criminal intent and one that eschews day-to-day ethical practice.
However, errors of judgement and ethics also occur within the confines of everyday ethical practice, especially in South Africa.
Speaking up is the hard part.
Business ethics is one part integrity, another part responsibility, which is up to the company and all individuals inside to uphold.
Corporate governance, corporate social responsibility, fiduciary responsibilities, and criminal matters, such as insider trading and bribery, all fall under this umbrella.
As businesses, we should continuously strive to uphold these basic principles, but as consultants we are also held to another set of ethical principles.
Essentially, we add value by identifying and helping clients resolve areas of complexity unapparent to those inside a company and to speak to these issues when they emerge. If a consultant is unwilling or unable to play this role, questions may arise about whether they are fit to practice, or whether perhaps they have become too client-centric.
Inherent in the task of strategy consulting and organisational transformation is going against the will or wishes of powerful decision-makers in the company.
Remember, we work for the company and its stakeholders, not for the chief executive, executive committee or any one particular employee - the entire company is the client, and the main objective is to ensure the well-being of the company.
As a result, it is imperative to build trusted relationships. And, again, this is based on decision-makers in the company understanding you are going to advise them on what needs to change, in the interests of the company.
Often, there is a level of discomfort in this relationship, but an understanding managing director or chief executive will know you are there to add value, not to pay lip service.
It is also key to building leadership alignment, as people often have a different understanding of the direction or merits of a project or programme.
In aligning these internal social clusters we begin creating lasting value that can be measured by a company's long-term commercial success.
In neglecting these duties, we are silent witnesses to a company's ills and, in the worst cases, its self-destruction.
Consultants must make the effort to learn about the company and industry they operate in and ask the difficult questions in the very first meeting, keeping in mind a complex myriad systemic factors that are often at play in the particular sector.
This approach is central to any strategy change implementation. The political factors must be resolved before anything can be done.
Further to this, a level of psychological perspective and insight is as vital as a commercial one. Organisations are complex human systems and should be engaged with as such. The interplay between social clusters inside a company illustrates how an organisation understands itself and how it operates.
Leadership that is guarded against change, internal disagreements, and clashing company dynamics are the true challenges of strategy implementation, whereas the operational and strategic elements become almost effortless with years of experience.
As for consultants, we need to hold ourselves to the highest ethical code to deliver value to our client base and build continued credibility within society at large.
It takes tremendous courage to commit to your view and greater courage to push back against your client's view.
This is particularly important in a country such as ours that has been racked by negative politicking for years.
We bring external and professional expertise to a company, a set of eyes and ears that pick up the nuances that those inside a company sometimes become blind to.
We can say things that others within the organisation can't, but evidence amounts to nothing if it is kept from those it affects. This underpins the ethics of our profession. Speak up or get out.
Stephen Rothgiesser serves as managing director of The Change Consulting Group, a South African company with 18 years’ experience in implementing large-scale strategic programmes. He has global experience in working with public and private sector clients and is regarded as a trusted authority on leading and implementing complex transformation programmes.