[FOUNTAIN]Analyzing the consultants

"On War" written by Karl von Clausewitz of Germany in the 19th century is required reading for military officer candidates because the book teaches a classic war philosophy based on military experience. In the book, Clausewitz said through the history of wars one can understand present problems; in the process, one can learn experiential science and, above all, military strategy.

"The Art of War" by Sun Tzu, even 2,500 years after it was written, is very popular as a reference on military strategy. Even European and American military officials often refer to The Art of War for learning military tactics and strategies. Sun Tzu said in the book that the most important principle for military officers was to analyze objectively one's own situation and the situation of the enemy before making a judgment.

Military strategy books of the East and the West teach valuable lessons in the fundamentals of modern business. Major consulting firms deal mostly with strategies and tactics that have been used in wars. Modern consulting techniques were born between the world wars of the 20th century. Strategists such as Fredrick Taylor advised many companies using skills that they studied in the military: surprise attacks, military resource management and leadership training for military officers.

McKinsey, a leading consulting firm at the end of the 20th century, is now in turmoil because several top multinational firms that were advised by McKinsey started falling apart, raising many questions about the value of its services -- or even if its advice might be dangerous. The misfortunes at McKinsey began with the bankruptcy of one of its customers, Swiss Air. Enron, K-Mart and Global Crossing are among other customers of McKinsey that are now bankrupt or have filed for court protection.

Business Week magazine recently questioned the secretive relationships McKinsey had with its famous customers. The magazine claimed that McKinsey failed to provide precise advice consistently. With the demise of dot-com companies, the demand for advisory services has also fallen greatly.

Foreign consulting firms in Korea are not in good shape either. They were often selected based on personal relationships that raised questions about the firms' effectiveness. Much of the advice failed to take the realities faced by many Korean firms into account, and many managers have defended their handling of crises by saying it was based on foreign consultants' advice. Now we need advisory services to analyze consulting firms.

The writer is a JoongAng Ilbo editorial writer.

by Choi Chul-joo