GLOBAL EMPIRES OF ADVICE | Daily News

GLOBAL EMPIRES OF ADVICE

For those interested in strategy and the process of decision making, the Battle of Pharsalus offers an excellent case study with lessons that are valid even today.

In 48 BC the forces of the Roman Senate commanded by Pompey the Great, a renowned soldier and statesmen, often compared to Alexander, were defeated by those of his ambitious rival, Julius Caesar. The outcome of the battle was surprising because Pompey had both the numerical advantage with 12 legions or 45,000 troops as well as enjoying vast superiority in terms of supplies, against Caesar's smaller force of 22,000 legionaries.

Confident of his advantageous position, Pompey wanted to delay the battle knowing that Caesar's army albeit smaller was more battle hardened. He based this on the knowledge that his rival's force, faced with shortages in food and other supplies was likely to implode as a result of starvation and mutinies if he were to adopt a long term strategy of attrition. Since all armies, including Roman legions, ultimately march in their stomachs, to quote a much later strategist, Napoleon Bonaparte, this was a sound course of action to follow.

In that context, it was rather unexpected that Pompey would opt to engage Caesar at Pharsalus, in Greece, and would be soundly defeated in that battle by his rival. What is certain is that Pompey threw away his advantage and gave Caesar the battle the latter so badly needed and indeed wanted. The defeat of the senatorial faction would have far reaching strategic and political consequences, paving the way for Caesar's dictatorship, his subsequent assassination and the establishment of nearly five centuries of rule by the autocratic Roman Empire.

Advice on military strategy

Chroniclers of the Appian Wars including Cicero, Plutarch and the great poet Lucan, attribute Pompey's fateful decision to his heeding the misguided advice from a cohort of personalities, generally, senators, collectively described as the “Iactators”.

The “Iactators”, which is translated from the Latin as “charlatans” and sometimes as “boasters”, were determined to make their mark on history by giving their five sestertii worth of advice on military strategy of which they were woefully ignorant. The result was Pompey's disastrous defeat at the hands of Caesar at Pharsalus in 48 BC.

The importance of making decisions, and more importantly the right ones, is a daunting issue that transcends both time and geography. The cost of making a wrong decision remains a worrisome possibility for anyone entrusted with a position of responsibility. Hence all organisations have a paramount need to be equipped with proper mechanisms to be able to formulate the right types of policies that will ensure that the right decisions are taken at all times.

In many ways, there have not been fundamental changes since Roman times given that decision making is still largely dependent on advice. But the fundamental difference is that today, advice has become a multinational industry, which goes under the name of “Consultancy”.

In the current context, we are no longer faced with the dangerous prospect of a coterie of Roman senators who had never thrown a pilum at a foe, advising on how legions are to be best deployed. What we have today in “Consultancy” is a US$ 250 billion dollar industry (2016) that grows annually at 4.1%. This Consultancy industry often uses brilliant minds and the most advanced statistical tools to build scientific foundations to their advisory service.

The largest section of this industry is operational advice (about 30%) followed by financial advice (28%) and strategy (15%).

All these three main sectors are vital for a developing country such as Sri Lanka, which is recovering from 30 years of conflict and a legacy of not having taken in many cases the right type of decision. It also must be added that Sri Lanka needs to take stock of the advances and rapid changes that have arisen from globalisation, to develop Laws and legislation in line with those of the modern world and also to assimilate cutting edge technologies already adopted by nations that are world leaders.

In the Consultancy business, Asia is one of the main recipients of such expertise and It is already estimated that 16% of all the consulting business, to the value of US$ 40 billion was purchased by Nations in the Asia Pacific Region.

Sri Lankan context

Sri Lanka will, therefore, need to be prepared for an influx of consultants given the need to improve in many important areas. A major issue is to ascertain whether the country is well prepared to assimilate the advice given and make the best of this. However, the true nature of this advice needs to be studied thoroughly given that it may or may not be applicable to the Sri Lankan context. Knowledge can bring about positive changes and build capacity if its best practices can be adopted.

A criticism of the consultancy business is that more often than not the client provides the information to the consultant who then builds a model around it. Hence often the recipient of the advice is under the impression that it is he or she who did all the work. This idea that consultant picks the brains of their clients is often mentioned in publications dealing with the subject of consultancy.

Another area that is of interest is the professionalisation of advice with leading consulting firms have become de facto “Global Empires of Advice”. Among the most prestigious consulting firms ranked every year for include many famous names such McKinsey, Boston Consulting Group, Bain and Company leading. The others are Booz, Allen Hamilton, PricewaterhouseCooper, KPMG LLG, to name just a few.

Other bodies that provide advice are international organisations such as the World Bank, and the various specialised agencies of the United Nations. Of course, many of these consultancy firms and bodies have ideas on certain aspects of policy which may or may not be in accordance with the best interest of the host country.

As a profession that earns a living disbursing advice, rather than creating wealth through industry or agriculture, Consultants have often been at the receiving end of many jokes and sarcasm.

Well known Canadian journalist Carl Honore decried the infatuation for easy answers to complex issues stating “We live in a culture that's been hijacked by the Management Consultant. We want everything boiled down to a power point slide. We want metrics and “show me the numbers”. That runs counter to the complex nature of so many social, economic and political problems. You cannot devise an algorithm to fix them”.

The great economist and Nobel prize laureate Paul Samuelson is even less charitable when describing the performance of the consulting profession “often when I become a consultant to a federal agency, that precipitates its demise”.

Others are even more merciless, questioning the very nature of consultants. Mo Ibrahim said “What do you do if you are an executive who resigns? You declare yourself a consultant”.

Global markets

Leading Insurance magnate Eric Severeid introduces humour to the discussion, defining a “Consultant: any ordinary guy more than fifty miles from home”.

But some cases where consulting advice has gone wrong are hardly laughing matters. An often quoted case was the advice dispersed by consultants working for a leading world body to Governments of developing nations to encourage their small scale farmers to give up subsistence farming to boost their earnings by cultivating cash crops instead.

The rationale behind this advice was that cash crops would lift the farmers out of poverty by connecting them to global markets. Whilst there were some indeed some success stories, many of these farmers were unable to secure markets in developed countries. At the same time since some of these crops such as coffee were governed by commodity markets, a reduction in their value could inevitably result in the impoverishment of the said farmers. Hence the cost of changing their production from subsistence to cash crops often worsened the situation, with farmers not even having the option of “eating their produce”. At a national level situations have arisen where those developing countries’ food security was seriously compromised.

Very recently there has been interest on the part of consulting bodies to promote the privatisation of healthcare and they have been providing advice to countries both developed and developing, to move away from a system of healthcare funded by taxation.

There is however little evidence to support the idea that privatised healthcare is more efficient than a national health system and a private system is probably not as well equipped for dealing with contingencies such as epidemics or pandemics. Another daunting issue is the extent to which the advice that the consultants provide can address the real problems. The philosopher Matthew Stewart, author of the celebrated works ”The Management Myth” wrote that “Whoever pays a consultant gets pretty much what they want to hear”.

Hence the question of what advice is needed and indeed beneficial remains largely unanswered even though the implications of heeding the wrong advice can steer a country on the wrong path and the cost may be very high to bear and the necessity of developing the right tools for analysis is therefore of a paramount importance. 


 

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