Every professional expert who sells judgment for a living is scored on results. Advice — from the outside consultant to your own internal strategy team — is the exception. That is going to end.
There is a role in business where you can be wrong for ten years and never find out. It pays extremely well. And when you do find out, you are often never accountable.
We usually see it from the client’s side of the table, because we work with our executive coaching clients trying to help them understand why what is happening, happens.
A few years ago, Kris and I were advising a client whose employers had brought in a highly regarded consulting firm to run a major restructuring. The work was solid. The recommendation, signed off at the very top, delivered with real conviction. On paper, it was good work.
Two years on, the margins had improved a little. The savings were a slam dunk overwhelming success. That’s the benefits case. The ROIC-WACC spread and growth had not materialized. That is a lack of value creation and is more important than the benefits.
As I often say, banking a benefits case is vapor unless it increases the value of a company. Or as I once told a major resources CEO, dramatically increasing your case position without a corresponding increase in your share price just made you a prime acquisition target. A juicy cash cow.
Coming back to the restructuring story, here is the part that should bother you: nobody had told the board, not in plain words. And I mean nobody. The study had been filed, praised, and quietly forgotten. The day the deck was handed over, the advice and the result walked off in different directions.
That is not a story about one weak study. It is a description of how the whole field works.
Advice ends at the recommendation. Whether it created value is a question the advisor is never made to answer. And before you picture a brand-name firm, widen the lens. It is the boutique. It is the banker. It is the internal strategy team, the corporate-development group, lawyers, auditors, the head of strategy who presents to the board on Thursday and rolls onto the next initiative at the end of the assignment. Every one of them sells advice. Not one is on the hook for the outcome. Well, to be fair auditors often do come back. The rare ones who have multiple year engagements.
This is not an oversight. It is the business model. You are paid for the analysis, not the result.
Everyone else who sells judgment gets a scorecard
Think about who else does this for a living.
Gordon Ramsay gets a Michelin star or 10 or 20. Yet, after my visit to this fine oxymoron, I am going to question the value of any Michelin star anywhere in the world. Although, it’s personally my fault. If I have never ever allowed my performance cars to be outfitted with Michelin tires, it’s on me that I trusted their expansion into rating restaurants.
A surgeon has a complication rate, and it follows them from hospital to hospital. A pilot carries a record that every landing writes. A fund manager lives and dies by a track record printed to the basis point. Even a private buyer of companies documents the thesis on the way in and must explain the variance on the way out.
Heck, even divorces and alimony payments are on the public record. Who can blame Ross for trying to avoid his third divorce, from Rachel?
Advice is the one exception. It is the single expertise scored on the quality of the slide instead of the result on the ground. There is a name worth giving the space between those two things — call it the accountability gap. It is where most advice quietly lives in this space with no light, and apparently no internal audit, and it is enormous.
Scored against what, exactly
If we are going to measure advice, we should measure it against the only thing that counts: value creation. Stripped of the noise, that is the spread between the return on capital and its cost — banked, and then grown.
That is the scoreboard corporate strategy has always answered to (Tim Koller & Myself on measuring and managing the value of companies). Advice that cannot point to its mark on that spread has not been held to anything. It has been applauded, which is a different thing entirely.
It’s the equivalent of granting an Oscar based solely on the script, while the movie flopped. That would be absurd. Or imagine granting a Nobel Peace Prize on the possibility of peace. Oh wait, that one happened.
We have written about exactly this gap before — a strategy that was flawless on paper and a quiet catastrophe in the bank account (The Superior Advantage Only Audit Firms Have). The slide was brilliant. The banked result was not. And the people who built the slide were never once measured against the result.
If you built advice from scratch today
The wrong question is how to make advice faster or cheaper with AI. Yet, everyone is hurtling in that direction. The useful question is the other one: if you built advice from nothing, knowing what AI can now do, what would it actually be?
Not a quicker deck. A closed loop.
A problem is identified. A study is run. A proposal is made. The projected benefits are signed off before a dollar is spent. Implementation is managed. And the benefits actually realized are banked — and signed off a second time — at the end.
Two of those steps have never lived in the model. The first puts the client on record agreeing to the number. The last confirms the number was real. Everything between them is the work everyone already does; it is the two signatures that change the physics of the economics.
It is what a serious buyer of companies does to protect its own capital — thesis in, variance out. The twist is doing it to protect the client instead, and to hold the analysis to the outcome it promised.
How you actually build that loop — how judgment gets encoded into the study, how a finding becomes a proposal, how both signatures happen without burying everyone in process — took us years and a great deal of scar tissue to work out. That part stays with our clients and the teams building on Michael. The principle is what travels, and the principle is the point.
Why it was never built
The reason is not flattering. Commit to comparing actual benefits against promised ones, and you are exposed on every engagement that fell short. The old model shuts that door on purpose. The work ends at delivery; the result becomes the client’s problem to chase.
Alas, it is human to avoid accountability like a NYC rat avoids open daylight.
The internal team is no braver. Nobody signs up to be graded against their own forecast when the culture has never once asked them to. People love to write brilliant articles. Do brilliant analyses. They love the asset light work of insights on paper.
They don’t like the psychologically damaging work of defending an insight or thought. And that’s in this program.
This is not a value-based fee — which we have argued rarely works, because scarcity, not value, sets the price. Accountability is a smaller and harder thing: a willingness to be measured against your own forecast, whatever it turns out to say.
Where it gets hard
Accountability is only fair where the advisor can shape execution. Nay, be accountable for accountability. Hand over a deck and leave, and grading the advisor against the banked result is unjust. The loop only closes when the advisor stays through implementation — which happens to be the very part most of them would rather skip.
And some outcomes belong to no one. A market crash is not a failed recommendation. The sign-off has to separate what the plan governed from what it never could — the way any serious investor separates a bad bet from bad luck. Done crudely, accountability breeds cowardice: advisors who only ever propose the safe, easily-banked move. The cure is the horizon. Measure against the spread over the life of the advantage, not this quarter’s number (Understanding Risk in Strategy). Over the right horizon, courage and accountability turn out to be the same discipline.
Back to that study
We still think about that client and their restructuring. Not because the advice was bad — it was good. Because good was the only test it had to pass, and the firm that ran it let good stand in for worked.
Those are not the same word. For seventy years the field has spent them as if they were.
They are about to come apart. The advisors who keep letting good stand in for worked will soon be sitting across the table from the ones who can prove the difference — signed, banked, and dated at both ends.
Applause is not evidence. And to paraphrase that wise man, Montell Jordan, this is how Michael AI does it.
P.S. You do not need our system to start. At the end of the next recommendation you are handed — by a firm, a banker, or your own strategy team — write down the number they are promising and the date you will check it. Then actually check it. You will learn more from that single act than from the entire deck.
Related reading
- The Superior Advantage Only Audit Firms Have — a strategy flawless on paper, a catastrophe in the bank account.
- Tim Koller on Measuring and Managing the Value of Companies — value creation as the ROIC–WACC spread, banked and grown.
- Why Value-Based Consulting Is Seldom a Good Idea — why accountability is not the same as a value-based fee.
- Understanding Risk in Strategy — measuring courage over the life of the advantage, not the quarter.
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