In the first of this series, Five Ways to Raise Your Game, I introduced another way to further build your  brand and, thereby, your practice – by differentiating yourself and your consultancy (e.g., practice) in a deeper, more meaningful way – by focusing on How you consult, in addition to What you do. 

This second article in the series addresses what you can do to combat the issue that has tarnished the consulting industry for too long – the lack of ethics in consulting.

Ethical Lapses in Consulting

As you are likely aware, there are enumerable media articles on ethics lapses in management consulting.  They include, among all others, these ‘biggies:’

• McKinsey, nearly a $600 million fine for their consulting to Opioid pharmaceutical company Purdue Pharma LP;
• PwC Australia, ended up selling their Government Advisory Unit, with approximately annual billings of $300 Million (AUD), for $1 AUD.  [Yes, equivalent to $0.70 USD] because of, among others, ethics and conflicts of interest abuses;
• When McKinsey Comes to Town argues that the legendary firm has accrued an inordinate amount of influence chasing profits at the expense of moral principle. [Note: it is interesting to note that one of key early leaders of McKinsey, Marvin Bower, was known for espousing the value of ethics in management consulting, as it was said, “There was no backbone in the firm that was nonnegotiable when it comes to matters of ethics.”  Marvin Bowers was also one of the key founders of The Institute of Management Consultants USA, of which I am a member.]
• The Big Con: How Consulting Industry Weakens Our Businesses, Infantilizes Our Government, and Warps Our Economies (Mazzucato and Collington) skewers the industry with examples from Puerto Rico’s bankruptcy to Britain’s Covid contracts. 

Even before some of these abuses were made public, an Economist article started with this sentence, “If a list were made of the reviled species in the professional world, only investment bankers would stand between management consultants and the top.”  The article continues, “Sceptics portray these corporate consiglieri as snake-oil salesmen, bamboozling chief executives and politicians with management gibberish and glossy charts with gorging on fat fees.” 

Causes and Costs of Ethical Lapses in Consulting

Likely causes of these examples were probably due to conflicts of interest, lack of objectivity, and other breaches of ethics.  The cost of ethics lapses is now both quantifiable and very clear; they not only cause reputational damage, but they can also cost hard dollars.  Our collective reputation as consultants, as is your reputation, is ultimately harmed by the press covering quite unfortunate ethics and other lapses in professionalism.

That’s my profession being tarnished, and I am upset.

These and other ethics lapses were preventable.

What You Can Do to Combat Lapses in Ethics

I believe that these examples didn’t have to exist.  I also believe that behavioral guidance comes from an understanding and adherence to an enforceable consulting Code of Ethics.

“What if, in a way of market differentiation, you as a consultant (solopreneur or individual within a professional services firm or inside an organization) understood and adhered to an enforceable Code of Ethics and you marketed that to prospects and clients alike?”

In light of damage to our profession by these very visible (and others, likely less visible) ethics lapses, how would this help you separate yourself professionally?  

A Consulting Code of Ethics

A quick dive into the enforceable consulting Code of Ethics that I adhere to demonstratively shows how adherence to our Code of Ethics would have likely precluded the such lapses that damaged long established reputations and cost enormous amounts of money.  For example, take these five (out of fifteen) elements (Bold presents parts the Code):

1.0 I will serve my clients with integrity, competence, independence, objectivity, and professionalism.

How would individual consultant behavior that exhibits an understanding of ‘integrity,’ ‘independence,’ and ‘professionalism’ have precluded these very public examples?

5.0 I will treat appropriately all confidential client information that is not public knowledge, take reasonable steps to prevent it from access by unauthorized people, and will not take advantage of proprietary or privileged information, either for use by myself, the client’s firm, or another client, without the client’s permission.

What if, for example, PwC Australia partners had not shared confidential government information to other parties?

6.0 I will avoid conflicts of interest or the appearance of such and will immediately disclose to the client circumstances or interests that I believe may influence my judgment or objectivity.

Did any partners and staff disclose real or potential conflicts of interest?

11.0 If within the scope of my engagement, I will report to appropriate authorities within or external to the client organization any occurrences of malfeasance, dangerous behavior, or illegal activities.

How might professionals within McKinsey, as an example, have behaved when they perceived such dangerous or illegal behavior?

13.0 I will represent the profession with integrity and professionalism in my relations with my clients, colleagues, and the general public.

How might all have behaved differently?

And these are only five of the fifteen points in the enforceable Code of Ethics.

Advantages of Ethical Behavior for Consultants

Here’s what we know: the business with high ethical standards has three primary advantages over competitors whose standards are lower:

• A business of high principle generates greater drive and effectiveness because the consultants know they can do the right thing decisively and with confidence;
• A business of high principle attracts high-caliber people more easily, thereby gaining a basic competitive and profit edge; and
• A business of high principle develops better and more profitable relations with customers, competitors, and the general public, because it can be counted on to do the right thing at all times. By the consistently ethical character of its actions, it builds a favorable image.

Ethics in Consulting Creates Market Differentiation

What if then you not only understand and adhere to an enforceable consulting Code of Ethics (only 15 simple commitments) and also market that you do so – in your collateral material, website, proposals, etc.?  For example, I put the following in all my proposals:

As a prospective purchaser of consulting services, you have the absolute right to choose any consultant who serves your needs. I simply ask that, for your protection, you ensure that the consultant you chose adheres to an enforceable Code of Ethics. [Note: I also include a copy of the Code of Ethics and make it a part of the proposal or letter of agreement visibly demonstrating the elements of the Code.]

How would that work as a market differentiator? I know it does, as do my prospects and clients.

In Summary

In this blog, the second of a series, I explained how an understanding and adherence to an enforceable Code of Ethics further differentiates you and your consulting practice from other consultants.

I believe that as a professional consultant to management you should adhere to an enforceable Code of Ethics. We suggest that you join me as members of the Institute of Management Consultants – USA. You, too, can set yourself on a path of differentiating yourself from an estimated 850,000 to 1,000,000 other consultants in the United States. That, I submit, is certainly an incredible value and which publicly shows you are a professional and ethical consultant.

In the next of this series, I will delve further into market differentiation by addressing the set of International Consulting Competencies and how they can be a key part of differentiation and branding. Stay tuned!

This blog post was printed on the IMC USA blog with permission. It originally appeared on The Consultants Peer Group blog.

About The Author, David Norman CMC®-AF, FCMC

The author, David T. Norman CMC®-AF, FCMC has almost 50 years of experience as a management consultant. He is the Chair of The Consultants Peer Group and CEO of David Norman & Associates, specializing in financial, operational and general management consulting services. David was the first recipient in the United States of the CMC®-AF, Academic Fellow of the international Council of Management Consultant Institutes (ICMCI) and is a FCMC, Fellow of the Institute of Management Consultants USA.