You’re So Vain: You Probably Think This Blog Is About You

Are you sure you’re getting value from the “Big 4”? There is a common saying in the world of management consultancy and project management that “no-one ever got fired for hiring Deloitte (insert your own name for one of the other four).

The big four are often perceived as being a kitemark for quality, a fail-safe option, and a security guarantee. On the face of it these businesses are doing very well for themselves. The Financial Times reported this week, for example, that 699 equity partners at Deloitte received their biggest payday in a decade with an average profit share of £882,000 – a 6 per cent rise on the previous year.

It’s a very similar story at the other big audit and consulting firms. Critics accuse these businesses of anti-competitive behaviour and conflicts of interests as they take on the role of auditor and implementor of change but there is little sign of their recognising the need to change. The head of audit and assurance at Deloitte said the firm would reject proposed reforms: “that would seen any form of separation of the audit business from the rest of the firm.”

You might think that such practises would be past their sell by date in 2019 but setting aside the rights and wrongs I would simply pose two questions:

1. Do they provide value?
2. Are you getting what you pay for?

Clearly, the partners who work for the big four are very bright, hard working people. Apparently, many of the senior partners who work for these firms boast that they work so hard they only get three to four hours sleep a night during their peak season.

That’s impressive, right? I tend to find personally that huge amounts of long- term sleep deprivation ultimately reduces my capacity to think rationally but maybe I’m a bit of a wimp! No doubt, the large bonuses act as a highly motivational stimulus, which makes the need for sleep redundant.

Many of these big firms give the perception that they are a Jack of all trades, but perhaps since we’re in the land of old sayings, perhaps it really is a case of being a master of none.

As I wrote recently, PwC, failed the competency test when it was fined for failing to comply with the General Data Protection Regulation (GDPR). The fine was in response to a complaint following which the Hellenic Data Protection Authority (DPA) conducted an ex officio investigation into the lawfulness of the processing of personal data of employees working at PwC. You might almost say that the firm was asleep on the job.
Point two: value. One of the most asked questions I get from clients is “what is value” or “how do we measure value?” When it comes to the big four it seems to me that there are two types of value – “real” value and “vanity” value.

Real value measures quality, productivity, throughput, predictability and financials, which all point to areas where performance can be tracked. Fifth Step is comfortable with these measurements as they align with how we measure most things today.

Vanity value is a different proposition altogether. Do the big four offer vanity value? Absolutely, I would argue. Is it a long-term recipe for continuous business improvement? Absolutely not and if you are someone from the big four reading this blog then you probably think this blog is about you.