When Transformation Becomes the Answer Before the Problem Is Understood

A consultant usually enters an organisation after somebody has already described the problem. Perhaps the board thinks decision-making has become too slow, the chief executive sees an entrenched management structure, investors want lower costs or operational leaders believe the organisation can no longer support growth. The consulting team listens, begins gathering evidence and constructs the engagement around what it has been asked to investigate.

This is perfectly normal and also where the first weakness can appear. Once bureaucracy becomes the central concern, the project naturally starts looking for bureaucracy. If accountability has been identified as the problem, interviews begin revealing failures of accountability. When an established leadership team has already been described as resistant, behaviour that might otherwise have been interpreted as caution, disagreement or institutional memory can gradually acquire a different meaning.

Nobody needs to manipulate the analysis for this to happen. People investigate the questions they have been given, which means a sophisticated methodology can still produce a rigorous answer to a question that deserved more challenge at the beginning.

A consultant can spend months producing excellent analysis of the wrong problem.

Before the controversial restructuring, the South African Revenue Service had developed a reputation as one of the country’s more capable public institutions. Tom Moyane became commissioner in 2014, and Bain South Africa subsequently became involved in organisational restructuring, with an engagement that began relatively modestly and later expanded considerably.

The consequences inside SARS were substantial. Senior managers left, organisational units were changed and important investigative and enforcement capabilities were weakened. The Zondo Commission later concluded that SARS had been systematically and deliberately weakened and made severe findings concerning Bain’s involvement in the restructuring programme.

Bain has disputed that it knowingly participated in state capture and has acknowledged that its work at SARS fell short of its professional standards. That distinction belongs in any serious examination of the case because management analysis becomes less useful when disputed facts are simplified merely to make an argument easier.

What remains relevant for consultants, regardless of how intention is interpreted, is the condition of the organisation before the restructuring began and the evidence used to conclude that such extensive intervention was appropriate.

Executives are supposed to have a view of the organisations they lead, particularly when they have been brought in with an expectation that something should change. Their perspective therefore deserves considerable weight. Consulting becomes more valuable, however, when the adviser remains able to distinguish between understanding management’s interpretation and adopting it as the starting truth of the engagement.

I have seen smaller and far less dramatic versions of this problem in ordinary businesses. A founder concludes that the salespeople are ineffective, and closer examination shows that the company has never defined whom it actually wants them to sell to. A chief executive becomes frustrated with slow operations, while much of the delay comes from priorities being changed repeatedly at management level. Another company asks for more marketing, although customers still struggle to understand what the company is offering and why they should buy it.

The person presenting the problem may know the company better than anybody in the room, yet knowledge and interpretation are different things. Good advisory work has to preserve enough curiosity to examine both.

Consulting firms make money by helping organisations solve problems, which is an entirely legitimate business model. A more interesting question appears when the same firm that diagnoses the problem is also positioned to sell the programme that follows from its diagnosis.

Imagine a consulting team spending several months analysing a company and concluding that its organisational structure is broadly sound. There are weaknesses, perhaps significant ones, although they can be addressed through several targeted management changes, stronger controls and a relatively limited technology investment. For the client, this could be excellent advice, while commercially it may mean that much of the consultant’s work is finished.

A different conclusion could create an eighteen-month programme containing organisational redesign, implementation support, technology, communications and change management. The financial difference is obvious, even when everybody involved is acting professionally and believes strongly in the recommendation being made.

Incentives rarely need to appear as an explicit instruction before they begin influencing a decision. This is precisely why governance exists around situations in which professional judgement and commercial benefit become closely connected.

The organisation deciding how much transformation is required may also benefit from deciding that a great deal is required.

Transformation programmes naturally concentrate on what needs improvement, although organisations contain histories that rarely fit neatly into an organisational chart. A reporting relationship that looks cumbersome may exist because it protects an important customer relationship, while an employee whose role appears difficult to define can hold years of knowledge about suppliers, regulations or technology that nobody has documented properly.

A decentralised function may frustrate senior management and still produce better results than the cleaner structure proposed to replace it. An experienced manager may challenge a transformation programme because the organisation has attempted something similar before and understands where it failed, although that challenge can easily be interpreted as resistance if the project has already defined resistance as one of its problems.

I would therefore expect the adviser to understand the organisation before producing a detailed description of its deficiencies. That means examining why the current structure developed, what previous leaders were trying to solve, where informal authority sits, which capabilities perform unusually well, what customers value and which relationships or forms of expertise would be difficult to recreate if they disappeared.

The purpose is practical because any serious transformation changes more than the processes named in the proposal. Once people, knowledge and relationships begin moving, the organisation can lose things that nobody realised were carrying value until they are gone.

Consulting teams become more useful as they understand the client’s history, personalities, constraints and internal language. That familiarity allows them to interpret behaviour that would be invisible to somebody arriving for a few interviews, yet the same familiarity can gradually narrow the distance from which the engagement is being judged.

After months inside a project, circumstances that appeared unusual during the first weeks become part of the normal operating environment. The team understands why decisions were taken, knows the personalities involved and has spent enough time discussing the client’s objectives that those objectives can start feeling self-evident.

Evidence considered during investigations into the Bain relationship indicated that concerns existed within the firm about aspects of the SARS engagement and whether the relationship would withstand public scrutiny. For consulting organisations, the governance lesson is valuable because the person noticing something uncomfortable may sit outside the project hierarchy rather than inside the senior account team.

Independent review becomes particularly important when an engagement expands quickly, depends heavily on a small group of executives, produces substantial organisational removals or generates recommendations that materially increase the consulting firm’s own future fees. The review does not need to assume misconduct. Its purpose is to examine whether the reasoning still looks convincing when considered by someone who has not spent months becoming accustomed to it.

Some business interventions can be changed relatively quickly when the expected result fails to appear. A campaign can be stopped, a pricing experiment can be adjusted and some technology programmes can be abandoned, although rarely without cost. Organisational restructuring behaves differently because experienced people leave, relationships weaken, teams disperse and tacit knowledge moves somewhere else.

Management may discover six months later that a function removed in the name of efficiency carried capabilities the organisation still needs, by which time the people who understood those capabilities have accepted jobs elsewhere. Restoring the previous organisation can then require considerably more money and time than the transformation was expected to save.

Reversibility should therefore be part of the evidence requirement. The greater the organisational consequence of being wrong, the more confidence the board should demand in the original diagnosis before allowing a major programme to proceed.

Bain eventually returned its SARS fees plus interest, amounting to just under R217 million according to the SARS Commission report. The consequences of the controversy continued beyond the repayment and ultimately reached the firm’s ability to pursue public-sector work in important markets.

In 2022, the UK government excluded Bain and its affiliates from bidding for new government contracts for three years after considering the South African findings. The restriction on the wider global organisation was lifted in March 2023 after Bain supplied additional evidence concerning governance and compliance changes, while Bain South Africa remained excluded until January 2025.

South Africa’s National Treasury also imposed a ten-year public-sector restriction, which Bain challenged. In 2025, Bain announced that it would close its South African consulting operation and convert Johannesburg into a global services hub after the reputational consequences of the SARS controversy had continued affecting its ability to operate normally in the market.

Considered only at the point when the work was being sold, the engagement generated substantial revenue. Once the calculation extends across repayment, management attention, restrictions, legal exposure and the eventual withdrawal of consulting operations from the country, the economics acquire a very different shape.

Consulting boards already spend considerable time examining pipeline, utilisation, margins and client concentration. Engagement risk deserves similar attention when a consultancy has become influential enough to alter a client’s workforce, organisational structure or institutional capability.

The question becomes particularly relevant as companies move from experimenting with artificial intelligence to reorganising substantial parts of the business around it. A chief executive says that the company needs to become AI-first, and that description can quickly move from ambition to operating assumption as processes are mapped for automation, roles are reconsidered, technology platforms are selected and productivity targets are established.

I would want the conversation to remain open long enough to determine which parts of this particular company actually become better when AI is introduced. That requires understanding where automation removes unnecessary effort, where it improves decisions and where it may simply accelerate processes that were already poorly designed.

An organisation with unclear responsibilities does not acquire clarity merely because a workflow has been automated. Weak information can travel faster through sophisticated systems, while management inconsistency remains management inconsistency regardless of the technology through which instructions are delivered.

Some companies will find that the evidence supports a substantial AI transformation, while others may gain more from concentrating investment in a few areas where the commercial logic is already convincing. A consultancy needs to remain equally comfortable recommending either outcome because the purpose of the diagnosis is to determine what improves the business rather than how large the subsequent programme might become.

The Bain/SARS case is understandably examined through corruption, governance and state capture, all of which are central to its history. For consultants, it also provides an uncomfortable reason to examine the craft of organisational diagnosis and the way commercial incentives interact with recommendations for change.

Consulting firms spend years developing methodologies for analysing businesses, redesigning organisations and implementing large programmes. The more consequential judgement can occur before much of that work begins, when the adviser decides whether the problem presented by management is really the problem the organisation needs to solve and whether the proposed scale of intervention is supported by evidence.

Sometimes the analysis will support substantial transformation. In another organisation it may lead to a much smaller programme, while there will also be occasions when careful investigation shows that considerably more of the existing business should be preserved than management originally expected.

A consultancy should be comfortable reaching any of those conclusions because the client is paying for judgement, and judgement becomes particularly valuable when it changes the question before the organisation becomes busy implementing the answer.

Before helping an organisation change, understand what you are changing and what may disappear with it.