Hiring Consultants = Weakness?

My social circles do not afford opportunity to attend many black-tie events, but I do own a tuxedo.  So, even though I thought it pretentious, I attended my thirtieth LBS reunion formal dress dinner in the Kent castle.

“Boards are simply intolerable.”

A tight circle formed around Mike, our only a public company CEO classmate. My class had mostly gone into finance, so Mike was surrounded by ten retired investment bankers who chimed in as Mike lamented the inefficacy of Boards of Directors. I joined the group.

““People arrive late or come unprepared.” “Everyone talks at once.” “They think they are there to make decisions, when they are there to advise and consent.” “I’m the only one who understands the issues, but still everyone has an opinion.” “Meetings go on forever.”

I spoke up. “It sounds like a meeting that might benefit from third party design and facilitation.”

Heads snapped toward me followed by a three second stunned silence and many frowns..

“Of course you’d think that as a consultant” sneered  my “friend” Rob, a retired business professor, now an “investor.”

Vigorous consultant-bashing ensued.

“Consultants know nothing. “They’re arrogant. “ “They destroy morale.” “Consultants find any negative information and paint a picture of doom.”  “They always want to sell you something more expensive. “They use their Board contacts to make you look bad.” “Their recommendations are either naïve, or destructive.”

Finally Mike raised his voice. “Only weak leaders hire consultants.”

“I’m not sure that my clients would agree with you, Mike.” I said, but soon went to look for another conversation and the group went comfortably back to complaining about directors, regulators, and environmentalists.

I retired from consulting after thirty-seven years and I admit that some complaints about consultants are justified. Some consultants sell by fear. Some are arrogant and demean staff. The percentage of jerks in the profession is smaller than reported but larger than it should be.

Some leaders hire the wrong consultants or hire them for the wrong reason. The “weak” characterization is unfair, but few in leadership talk about why to hire a consultant.

Why leaders hire consultants – the rational case.

A leader might need expertise, to understand circumstances not faced before. The leader may need specialized knowledge and skill it doesn’t make sense to hire full time. A leader might just want experienced heads and hands to help his company through a rough period of change. Or he or she might believe that the organization could use a partner to teach them how to master skills they not needed in the past but required now.

Those are “process needs,” describing how the leader works with the consultant and the first indicator of the kind of consultant the leader wants to hire:

• An expert – who provides answers.
• A trained resource – who alleviates a staffing crunch
• A partner, collaborator, who works with you to solve a problem and implement a solution.

Sometimes a leader starts with the kind of help they want. Many times they start with a problem or an unspecified awareness that something needs to change.

There are only three “problems” – reasons to hire a consultant. These are desired outcomes (mostly); we need to:

• Grow revenue
• Grow profit, or
• Resolve “people stuff”

What about strategy, supply chain optimization, digital transformation?” Strategy, innovation, product design, marketing, sales systems projects bring in more customers or more revenue from existing customers. Supply change optimization, inventory management, process improvement, operational systems projects reduce cost and increase profit.

Not all leaders naturally think in outcome terms. If they did there wouldn’t be a category called “people stuff.” An organization design reduces cost (increasing profit) or specifies accountability for customer acquisition or retention (growing revenue). Compensation and benefits work, or union employee grievance reduction would be a way to reduce the cost of hiring and managing staff. But in my experience, leaders with a people problem often don’t think about it in economic outcome terms. “People stuff” is messy, emotional, uncomfortable for many executives.

Consultants think in terms of service offerings and the academic press has trained leaders to think this way. “I need a continuous improvement initiative” or “Blue Ocean Strategy, or Digital Transformation.” So, many consulting engagements have process deliverables disconnected from results.

The leader has to achieve those results. If you hire an expert for the solution, you’ll have to implement it. If you hire “trained resources” you’ll have to manage them to the outcome. Even if you hire a collaborator, the leader “owns” the outcome.

This is the rational case, but business decisions have more than just the rational. There is often “behind the scenes people stuff,” which influences hiring a consultant,

Behind the scenes people stuff.

“My boss told me to,” “the Board strongly suggested it,” “there are two distinct factions on this issue,” “the last time we attempted this we crashed and burned,” “we have a young team with  little credibility with senior management,” or “everyone is complacent, it’s time to ‘shake things up’ a bit.”

Are any of these issues driving your decision to hire a consultant?

• Resolve an internal dispute? or
• Avoid a mistake? or
• Grow internal capability? or
• Build internal credibility? or
• “Shake things up?”

If so, refocus on outcomes. These are real issues and a leader must resolve them, but they shouldn’t be the only reason you hire a consultant.

Why leaders shouldn’t hire consultants.

Don’t engage a consultant to do the leader’s job or to outsource a core business process.

I’ve seen this happen with “people stuff” projects. Consultants evaluate and coach poor performers outsourcing performance management responsibilities. Sometimes a consultant decides who to let go during downsizing.

Some leaders hire consultants for the same work repeatedly – a new strategy or a new organization every two years. Bring those skills inhouse. Likewise, some companies try multiple continuous improvement or innovation initiatives, using a new methodology each time; Pick one methodology and stick with it.

Don’t hire a consultant to find a solution you won’t implement.

This often happens when a company hires a consultant to resolve a dispute the leader has a strong view about. The consultant comes up with the opposite answer and the report is buried. Sometimes this leader was directed to hire a consultant or is too busy to engage in the project

There are leaders who hire a consultant and “delegate” the entire relationship to a junior person, never seeing the consultant again until the report is presented. In my view, this is not delegation but rather abdication, and won’t produce lasting results. A successful consulting project is determined by the engagement of the leader in the work. Don’t “buy a dog and then bark yourself” as the Cockneys say, but you should “never let go of the leash.”

Don’t buy the latest management fad

Some executives want bragging rights at the Round Table or country club. “We use Six Sigma.” Sometimes they say, “it is good to “shake things up” every now and then. Their people say “Oh, here comes the flavor-of-the-month.”

Don’t hire your friend

A consultant-client relationship is based upon trust, reliable information, respected judgement, and a track record of doing what is promised. A leader must hire a “truth teller,” a person who can deliver bad news without giving offence, but without concern for a personal relationship.

Hire a consultant with a plan to leave. Disengagement with a consultant friend is hard because of the personal relationship. Even non-friend consultants want endless extensions, expansions, and an impressive rebuy rate. A disengagement plan should include how you will deliver results and learning the skills to do this yourself.

How a real leader hires consultants.

I think of consulting as a “helping profession.”  So in the spirit of being helpful, don’t hire a consultant without thoroughly thinking through these ideas:

• Be very clear about why you are hiring the consultant:
  • What are your expected outcomes? What action will you take? (Who might take it and when?)
  • If there are “behind the scenes people stuff” reasons you are hiring a consultant, don’t let those cloud expected outcomes.
  • What role do you expect from the consultant: expert, extra resource, partner?
• Be open with your consultant about the answers to these questions.
• Have a plan to bring the consultant’s process inhouse:
  • What can you learn?
  • Who should learn it?
  • What will they do with this new knowledge?
• Hire a consultant with a plan to disengage.
• Roll up your sleeves and engage with the consultant yourself. If you don’t have the time to do this, delegate, but make sure this person engages and arranges for you to interact (and not just at the final presentation).
• Resist the “pitch for additional work” that comes at the end of most project presentations, at least until you have achieved the planned results.

This requires the engagement of the leader. Consulting firms often say there is one client. There is also one person who is the consultant. Yes, there is a team on both sides, but in each case one person is the leader and accountable for outcomes. Many corporations have a staff person send out a boilerplate request for proposal (RFP) to twenty firms and then have the short list of five come in for “bake-off” presentations. This common consulting purchase process obscures the leader to consultant contract and makes success more difficult..

In my experience, real leaders, know why they are hiring a consultant and are intimately involved with the decision.