Consultants are the most rampant, yet the most sushed topic in corporate. There are enough consulting firms today, to make one wonder if we need so many of them. And if the conundrum of needing to hire consultants was not big enough, here comes the issue of what they actually do. Over the last few years, many in the media have reported consulting firms to have held too much power for far too long to have become corrupted. Firms have relied on shady practices to keep their business afloat and, on many occasions, have walked out without much consequences. However, I find the above conclusion misrepresenting, if not incorrect.
However, the need is more pressing when a disruption is to be implemented. Here, it is crucial to appreciate that each firm wants its employees to marry into its company culture. But once they do so, they lose their uniqueness and tend to groupthink. While one way of resolving this is to hire fresh and lateral talent, the issue tends to come up a few times. The easy hack of this is, therefore, to hire consultants who don't carry the burden of the corporate culture and neither have to be assimilated into the culture. A symbiotic agent of disruption.
The need for consultants doesn't arise from corporate's need to implement change or resolve issues. Corporations today are locked in an environment of constant change, be it in business models, products or even markets. The law forbids two companies from coming together and promising on a "happy ever-after". The consequence of this is action and retribution aimed at gaining more of the market. In this dog-eat-dog world, companies need to change, and many of them do. But the trick is the nature of the change; one is incremental (for which the companies rely on the middle managers) and gradual, and the other is sudden and disruptive (for which most top managers have to step in).
In industries where the body of knowledge is not very well defined, firms benefit immensely from their competitors' knowledge (non-proprietary). These could include business models, third-party software or even recruitment processes. The industry stands to benefit if this information is shared and the efficiency in the processes is improved. While communicating directly is forbidden, consultants often come in helpful with their vast body of knowledge.
The third and more nuanced reason could be that nothing markets your internal strength to your competitors more than a team of consultants running in your corporate office. In fact, the fancier the firm, the more the advertisement of strength. And why do firms need this fluff ? Many times in the economy, a firm can enjoy a superior status just by signalling its strength rather than actually fighting it out in the market because, more often than not, competitors buy the bluff.