Why Consulting Delivery Models Are Broken

The Hidden Agency Problem in Consulting

Every year, Australian organisations spend billions on management consulting. The implicit promise is simple: pay us, and we will solve your most important strategic problems.

But there is a structural flaw embedded in this transaction that neither party likes to discuss. It is an agency problem, and it is costing organisations far more than the consulting fees themselves.

The Consultant's Dilemma

When a company pays $2 million for a strategic engagement, the consulting firm faces an impossible tension.

The client is paying for an answer. A definitive, polished, defensible answer. The consulting team knows this. They know that if they walk into the final presentation and say, "Actually, your own people had most of this right, we just helped them structure it," the client will question why they spent $2 million.

So the consultants do what the incentive structure demands: they build the answer themselves.

They retreat into their own analytical process. They conduct interviews and gather data, but the synthesis happens behind closed doors. The frameworks are proprietary. The slide deck is beautiful. The recommendation is presented as a revelation, something only the consulting firm could have produced.

This is the first distortion. The consultants cannot rely too heavily on the client's own people, because if the answer looks like something the client could have reached independently, the fee becomes indefensible.

The Defence of Flawed Work

The second distortion is more corrosive.

When a consulting firm has invested hundreds of hours and staked its reputation on a recommendation, it develops a vested interest in that recommendation being right. Not just intellectually, commercially. The firm's future relationship with the client, its case study library, its references, all depend on the work being perceived as successful.

This creates a dangerous dynamic. If the analysis is flawed, or if the recommendation doesn't survive contact with operational reality, there is enormous institutional pressure to defend it rather than revise it. The sunk cost is not just financial, it is reputational.

We have seen organisations persist with strategies that their own leaders knew were inadequate, because the consulting firm that designed them continued to advocate for them. The consultants could not afford to be wrong. The client had paid too much to accept that they might be.

Why the Traditional Model Cannot Self-Correct

The agency problem is not a failure of individual consultants. It is a structural feature of the delivery model itself.

When one party is paid to provide answers and the other party is paying for certainty, the relationship inevitably drifts toward:

Consultants doing the thinking for the client rather than building the client's capacity to think for themselves
Over-engineered deliverables designed to justify fees rather than drive action
Defensive positioning when recommendations underperform, rather than honest recalibration
Dependency creation, because a client who can solve their own problems is a client who stops paying consulting fees

The result is a model that serves the consultant's commercial interests more reliably than it serves the client's strategic interests. Not because consultants are dishonest, but because the incentive structure makes honest delivery commercially irrational.

A Different Model: Facilitate, Don't Prescribe

At Rekon Group, we recognised this agency problem early, because our founder experienced it from both sides. Having worked within top-tier strategy firms and commanded high-stakes operations in the Special Air Service Regiment, Peter Winnall understood that the best decisions are never made for people. They are made by the people who must live with the consequences.

This is why we built the StratDo® process, a structured decision-making framework that fundamentally changes the consultant's role from prescriber to facilitator.

In the StratDo® model:

DEFINE™, We work alongside your leadership team to agree on the actual problem. Not the problem the consulting firm finds most interesting, but the problem that matters most to your organisation.
DECIDER™, We establish clear decision rights. Who owns this decision? Who has input? Who executes? This step alone eliminates the ambiguity that allows consulting firms to operate in the shadows.
DECIDE™, Your people make the strategic choices, using structured frameworks that surface trade-offs, challenge assumptions, and force intellectual rigour. We facilitate this process. We do not own the answer.
DIRECT™, We help translate decisions into executable plans with clear accountability, defined milestones, and leading indicators.

The critical difference is this: your people own the strategy because your people built the strategy. We provide the architecture, the discipline, and the analytical tools. But the thinking, and the commitment that comes from genuine ownership, belongs to the team that will execute it.

The Rekon Multiplier

Our model works because it addresses all three dimensions of the Rekon Multiplier simultaneously:

Empowered People, Rather than sidelining your team while consultants work behind closed doors, StratDo® develops your leaders' strategic capability through the engagement itself. When we leave, the capability stays.

Faster Problem Solving, Structured frameworks eliminate the weeks of unfocused analysis that characterise traditional engagements. Our clients typically reach strategic clarity in a fraction of the time, because the process is designed for decision-making, not deck-building.

Smarter Systems, AI-augmented tools accelerate the diagnostic and analytical phases, processing data at a scale no human team could match. But the AI serves the process, not the other way around.

The multiplicative logic is important. If any one of these factors is zero, if your people are disempowered, or the process is slow, or the systems are absent, the strategic result collapses. Traditional consulting models routinely zero out the first factor by design.

The Uncomfortable Question

Every organisation that engages a consulting firm should ask one question before signing the engagement letter:

When this engagement ends, will we be better at making strategic decisions, or will we just have a strategy document?

If the answer is the latter, you are not buying consulting. You are renting certainty. And rented certainty has a habit of expiring the moment the consultants leave the building.

Peter Winnall is the founder of Rekon Group, a Bain-trained strategist and former Special Air Service Regiment commander. He has delivered the StratDo® process to organisations including Sandvik, Serco, Woodside, Rio Tinto, Blooms The Chemist, Bingo Industries, and more.

References:

Jensen, M.C. & Meckling, W.H. (1976). "Theory of the firm: Managerial behavior, agency costs and ownership structure." Journal of Financial Economics, 3(4), 305-360.
Christensen, C.M., Wang, D., & van Bever, D. (2013). "Consulting on the Cusp of Disruption." Harvard Business Review, October 2013.
Lovallo, D., & Sibony, O. (2010). "The case for behavioral strategy." McKinsey Quarterly, March 2010.