The consulting section
of the spin industry might be having problems at present, but it’s
still good at catching the interest of journalists. The Fin
today launched a two-part series by Jennifer Hewett on business spin
consultancies, focusing on what she calls a “new breed of spin doctor
operating at the very top of Australian business.”

She then
proceeds to list a dozen or so people, most of whom, rather than being
“new,” have been in the game for between two and three decades. So why
do the story now, and why that angle?

It probably owes a bit to
a bid by one or more of the firms quoted to generate some publicity. In
some cases some firms think they need it, and in others they seem as if
they can’t help themselves when it comes to passing up public exposure.

The
angle is more puzzling because the reality is that consultancies are
actually less important at top levels of business than at any time in
the past two decades.

Admittedly Hewett mentions that companies
are beefing up in-house resources and quotes some highly successful
leaders, such as Geoff Dixon and Michael Chaney, who rarely use
outsiders. In Chaney’s case with the exception of the exceptionally
good Connolly and Partners.

Indeed, the real story is probably
given away by the list of consultancies and their numbers. Gavin
Anderson is described as the biggest with 39 consultants (although the
same article seems to suggest that CPR with 40 would be bigger).

As
far as the list is concerned none of the consultancies – other than
Third Person and Louise Watson – are really new, and both of them are
headed by old hands. Moreover, even the biggest of the consultancies
mentioned are less than a quarter the size of the top consultancies of
just a decade ago and sometimes significantly smaller than they were
themselves back then.

So what’s happened? A fundamental
re-alignment in the industry with more boutique consultancies; pressure
on margins and fees; greater emphasis on contractors; and, significant
expansion of in-house resources. Indeed, after almost 50 years of
steady expansion, including some spurts of very rapid growth, the
Australian consulting industry has been in retreat.

The big
numbers – and the big salaries – are now within the tent rather than
outsourced. That’s the real story – along with why journalists still
get so successfully spun about spin. Meanwhile, if you do read the
article and decide to hire a consultancy under the mistaken impression
that that’s the new black, here are some simple survival rules:

1. Never employ a consultancy whose principals talk to the media
about what they do – you’re the news not them. They ought to be like
referees who have done a good job if you don’t notice them.

2. Never employ a consultancy which publicly suggests
they decide or influence anything in a company – good advisors to good
companies advise and don’t decide.

3. Never employ a consultancy which says it succeeds because of
“relationships” – neither journalistic nor political relationships are
sufficient when it comes to hard calls on hard issues.

4. Never employ a consultancy unless they show clear evidence of real intellectual grunt rather than contacts.

Applying these simple survival rules reduces the list of the wonderful
“new” spin merchants quite substantially. Connolly & Partners are
obviously the first choice; Tim Duncan has to be considered on the
sheer intellectual grunt criteria; with Cosways, Cannings and Jackson
Wells Morris being reliable and experienced.