Opinion

There is an old joke about management consultants: they borrow your watch and then tell you the time.

Joking apart, consultancy, used the right way, can be extremely effective for an organisation facing change.

The recently announced review group on state assets will be doing work that is no different to what a management consultancy or corporate finance advisory practice might do: examining organisations, understanding how they work and where value is created in their activities and, in this case, forming a view on who might be purchasers and what value they would place on the enterprise.

To do this well, two things are needed, neither of which applies to the group just announced.

Firstly, to review an organisation takes time. You need to analyse accounts, performance figures and a host of other data. You need to talk to managers and other stake-holders. You have to understand the sector the organisation operates in, who the other players are, and where they might see value in the organisation. This takes time. The review group will be spreading consultation even further, by seeking submissions from interested parties and the public. This is good, but it also takes time.

Let us apply some simple arithmetic to the published review process. It is expected it will be complete in five months. Assuming the three principals work five-day weeks until year end, with no holidays (we all have to do our bit these days), that makes a total of approximately 325 "principal days" to carry out the work.

There are 28 entities to be examined (not counting "intangible" assets such as broadcasting spectrum and mining licences). That gives, on average, just over 11 days per entity. This is just not credible. Even if people other than the three principals work on the review, the direct analysis and input by the principals is probably a tenth of what it should be.

The time allocated to this breadth of review will result in a report that may be politically expedient, but will have little practical value.

The second essential component of good review work is the right experience and skills. The three people who have been nominated are all very fine individuals who have superb track records, but in the wrong fields.

There are two economists, most of whose experience is in academia, plus a career civil servant. Where are the experienced businesspeople, efficiency experts and financial people who understand company valuations and the market appetite for these entities?

The review of state assets is absolutely called for, given the position in which we find ourselves, but the approach is flawed from the outset.

Robert Wasson is managing director of Watershed Interim Management and former director of KPMG's strategy and organisational review practice