Why Consulting Is A Two Way Street

Andrew-Simon2I have both run companies and worked as a consultant. And I always cringe when someone says…“the consultants will handle it.”

I think that is a mistake on the part of any client. Why? Would you put your life in the hands of a stranger? Because that’s exactly what you are doing when you make a statement like that. You have a proprietary interest in your company. What proprietary interest does your consultant have? I mean, what long term interest beyond a paycheck?

Don’t get me wrong, consultants are very valuable. The question is how best to use them. So if you subscribe to what I have said, this is what I would do:

  1. Balance the relationship. On one hand, you need to treat the consultant as a partner. But on the other hand, remember, you are the client. With that said, nothing should be out of bounds. Tell them everything. Too often consultants make recommendations without a full set of knowledge. They or you get blindsided. Years ago I ran a division for a bank. We had consultants who were hired to reduce back office expenses. But they received no information from the bank, the people who ran the business every day. There was much to learn beyond the naked eye. Without someone providing information, we reduced expenses with the wrong set of assumptions and created a very expensive disaster, both in terms of customer dissatisfaction and dollars.
  2. Just remember that being a consultant is not a substitute for experience. A 26-year-old just out of MBA School might be very bright and can probably run more fancy formulas then all of us gray hairs put together. But how much practical experience does he or she have? People learn by experience, by being beaten ’round the edges. My advice: Review assumptions and make sure that their assumptions tie to your experience. And make sure that you have a senior engagement partner who is paying attention to your business.
  3. Make sure you agree with both the assumptions and the recommendations. Don’t just accept them because they are generated by your consultant who might be very expensive and has a great reputation. I have seen a lot of “B” team work generated by supposedly “A” team organizations. Just remember that you have been running your business for a long time. You know your organization, its strengths and weaknesses, probably better than anyone else. Don’t cede your common sense to anyone.
  4. Make sure you understand exactly what has to been done following a consultant’s review and report. Too often reports go into closed drawers or the circular file after completion. That’s because there is no implementation plan. You need to agree and own whatever the consultants come up with. Remember that you are in it for the long haul and that you are getting something from someone who is in for the short haul.

So there you are. Consultants can be a real asset to your organization. But, you need to think about how you will use them to optimize your return on investment.