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A couple weeks back, McKinsey was roughed up by the Wall Street Journal regarding the firm’s lack of transparency when working on bankruptcy engagements. The gist of the story claimed that McKinsey had potential conflicts of interest based on investments and/or relationships with entities related to the bankruptcy. And even when it did disclose, the list was minuscule relative to other types of advisors.

Welcome to consulting.

Companies in most other industries tout their customers and successes to reinforce market superiority. Even most professional service industries operate in the relative sunshine, either out of regulatory compliance (audit) or scorekeeping (legal).

Yet most management consultants still prefer darkened corners and secret codes that identify their clients. For all the claims of accountability, most consulting firms refuse to divulge who they’re working with … and frankly, many clients are equally mum based on confidentiality required by the consultants.

Why do consultants receive a free pass when it comes to such disclosures? The traditional rationales centered on three themes:

• The work itself entails secrecy. This is most often the case when organizations are looking to trim costs and gain long-term efficiencies that would be disruptive in the short-term if widely announced prior to implementation.
• Strategy development is best conducted behind closed doors. CEOs do not want to be accused of outsourcing their brains or signaling business model intentions, which is often the perception when organizations announce such strategy engagements.
• Validation requires validating. Consider this an offshoot of the other two best characterized as making sure there is smoke and flames before shouting “fire!”

These concepts seem a bit one-sided and don’t necessarily justify opacity given the hyper-connected world in which we live. Does what we know really hurt us?

In truth, consulting is slowly becoming more open as firms promote success-based billing and joint ventures. But the real driver to transparency will come with consulting’s move to products. When firms are building/selling/servicing their own IP, you can bet we’ll demand to know who’s buying what from whom … and why!