Hiring and releasing one consultancy after another on the same question until one delivers the wanted answer leaves a single report in circulation, looking like rigorous outside validation.
An example
In the board pack, an independent director of a mid-sized apparel retailer read a strategy firm's report: close the 60-store outlet division and move its inventory online. It was thorough, well sourced, and matched what the chief executive had wanted since joining. At dinner before the meeting, a former executive of another consultancy mentioned that his old firm had examined the same outlet question for the retailer eight months earlier. The director asked the general counsel for every consulting engagement on the outlet business over the previous three years. There had been three. The first two had recommended keeping the division and fixing its pricing. Both had been ended early, and neither report had circulated. The board deferred the vote and asked to see all three reports.
Why it works
Only the conforming report survives, and it makes a predetermined choice look better, turning a preference into an evidence-based recommendation with a known firm's name on it. The choice becomes easier to own, because authorship passes to an outside party that absorbs the blame if it sours. The discarded views look worse: earlier firms and internal dissent seem lower quality, or not the right fit. The carousel relies on a sponsor who controls hiring, scoping, and termination of consultants without oversight, a budget that can absorb several engagements, a board that doesn't ask for the engagement history, and a question with real ambiguity.
The thinking behind it
Robert B. Cialdini Authority, from Cialdini's Influence (1984): people tend to defer to those who appear to hold legitimate expertise. A report from a known firm lends that firm's standing to the sponsor's choice. The carousel buys the authority without the risk of an unwelcome answer, and it works only while the audience believes the surviving firm was the only one asked.
George A. Akerlof Asymmetric information, from The Market for "Lemons": Quality Uncertainty and the Market Mechanism (1970): a gap between what one side knows and what the other can check distorts the whole exchange. The sponsor knows how many firms were hired and released, and the board sees only the survivor. That gap is the tactic. Uninformed parties protect themselves by demanding the information or discounting everything, and a board that asks for the full engagement history does the first.
Warning signs
Several consultancies have been engaged and released on the same question within a year or two, and only one report circulates. The earlier engagements are described as confidential or as poor fits. One executive controls procurement, scoping, and termination. The circulating report's conclusion matches that executive's known preference, and the board has never seen a list of engagements on the topic.
How to defend yourself
Before treating any report as decisive, ask for every engagement on the topic over the past two to three years, with engagement letters and scopes of work. Ask in writing, through the board or an audit committee if you need the standing.
- Ask why each earlier engagement ended and what it concluded.
- Talk to people at the earlier firms where confidentiality allows.
- Compare the scopes of work side by side.
A board that demands the history exposes the pattern, and the conforming report loses the weight it borrowed.
How a leader shuts it down
Before any single report is accepted as decisive, ask for disclosure of all engagements on the topic over the prior two to three years. Have early terminations of consulting engagements reported to the board. For contested questions, consider engagement terms under which the firm cannot be replaced while the question is open.