My colleague Angus Loten has a nice item on Inc.com today about International Profit Associates, the controversial Inc. 500 company that was written up on the front page of the New York Times on Sunday.
IPA has a long record of complaints against it. Former customers have accused the company of giving them the hard sell and then turning around and giving them bad service. IPA has strongly denied these claims in the past. The company helps small businesses prepare themselves for sale, and improve profitability.
In 2000, Joe Rosenbloom wrote a lengthy story detailing many of the claims that had been leveled against IPA up to that time. As he noted, however, it is "tough to judge the validity of IPA's tactics and the general worth of its consulting services, despite the seemingly credible complaints from a few of the company's clients."
"After all," Rosenbloom continued, "IPA belongs to the nation's unregulated $21-billion management-consulting industry, which is generally considered to be a nebulous realm. 'Measuring the success or failure of consulting projects is often murky. There are so many variables and intangibles that it's hard to make a fair assessment,' says Tim Bourgeois, vice-president of research at Consultants News, a leading industry newsletter based in Fitzwilliam, N.H."
Which leads me back to the New York Times' recent article on Burgess. One detail caught my eye. The paper said that IPA countered complaints by noting that they had served 125,000 customers over the years, and a few were bound to be unhappy.
Why so large a customer base, I wondered? A good consulting business should be able to retain clients for multiple engagements. And to really serve a client, I would think that a consultant would have to get to know his or her business and spend a healthy amount of time wrestling with its individual, idiosyncratic problems.
But IPA doesn't seem to spend a lot of time working with its clients. When Inc. published Rosenbloom's article in 2000, IPA had 1,635 employees, 325 of whom were consultants working on projects (as opposed to sales people, or administrative staff.) In 2000, these 325 people conducted something like 6,100 consulting gigs — for an average of 19 gigs per consultant, by my calculation. The Times reported that, this year, the company has 1,789 employees. I wonder if the 19:1 ratio has improved. I suspect it hasn't. And if it hasn't, it is no wonder that complaints continue to be lodged against the company. But it's fair to ask, why do companies, armed with this information, continue to complain when IPA provides them with what they consider to be inferior consulting services? A company that has served 125,000 customers in 15 years is obviously not tailoring its offering to each individual client. I feel bad for the companies that feel the money they spent with IPA was squandered but, when it comes to consulting, I think the "buyer beware" rule should be kept in mind.
Last updated: May 11, 2006
MIKE HOFMAN was previously editor of Inc.com and a deputy editor at Inc. magazine, which he joined in 1996. The site was nominated for a National Magazine Award for Digital Media in 2010, and was named the best business website by Folio Magazine. In 2006, Hofman was part of a team of writers nominated for a Webby Award for best business blog. He lives in New York City. @mikehofman