Business Consultants — Do They Really Add Value?
In my executive career I have collaborated with business consultants hired my company’s CEO. And I currently work as a business consultant focused on helping small businesses with strategic planning, leadership, building high-performance teams, and creating a healthy culture. As a result, I have heard the old jokes about consultants:
A consultant is someone that comes in and borrows your watch to tell you what time it is and bills you.
A consultant is someone from out of town with a briefcase.
How many business consultants does it take to change a lightbulb? Three, one to change the bulb and two to write the 25 page plan citing business school case studies.
As in any profession there are some excellent, highly ethical consultants that focus on certain areas of business as subject matter experts (SMEs). These folks are truly interested in understanding the client’s business, challenges, and goals and will only make a proposal, with specific deliverables, if they are confident that they can help that client and fulfill their commitments regarding the timeline and outcomes. They actively listen and do a thorough needs analysis in the discovery stage and verify information before making any recommendations. To do otherwise would be business malpractice. I use that term because if you were to visit a medical professional and present a problem or symptom and the clinician, without any tests or in-depth questions, prescribed treatment you would likely leave their office or operatory as quickly as possible.
A problem I have observed on several occasions is that a CEO with a strategy in mind hires a consultant to tell him what he wants to hear. Being paid handsomely, the consultant milks the engagement at a high hourly rate and gives the CEO the plan he wanted. If it works, the CEO takes the credit. If it doesn’t work the CEO blames the consultant, fires her, and hires another consultant. Surprisingly, board members don’t see this scam for what it is. Or, sad to say, they know the game and are complicit. After all, they are usually on the board because of that CEO and it’s easier “go along to get along” and make a nice annual fee plus be awarded stock grants and options. Then there is the prestige of serving on certain boards. Many board members will serve on several boards, especially in retirement. This includes retired senior military officers with extensive networks and relationships that can be leveraged when it comes time to secure large, lucrative DOD supply contracts.
Another thing that has galled me is the high-priced consultant interviewing employees then telling the CEO what his people have been saying for months. The CEO, if he trusted his people, could have learned the same things for free versus spending thousands on the outside “expert”.
My recommendation before hiring any consultant is to interview them to determine if they are a good fit for your culture and how you operate. Just because she has an MBA from Business School doesn’t mean she will “get” you and really understand your business and industry or profession. Additionally, if the fit seems good ask for at least three references and call those people. Basic questions include:
· How well did she listen and understand your business and challenges?
· How effectively did she identify the problems and/or opportunities facing you?
· Was her proposal well written and detailed with specific deliverables and dates?
· Did she meet the dates and deliverables in her proposal?
· Was the advice you received actionable?
· Were you able to achieve the desired results using her advice and plan?
· Would you hire him again?
The right consultant, hired for the right reason, is definitely a sound investment with a good ROI. I am not advocating anyone hire an inexpensive, inexperienced consultant because his hourly rate or the amount quoted for a project is low. I am however, strongly suggesting you not be snowed by fancy suits, Ivy League B-school pedigrees, and a list of famous clients. Do your homework, ask for references, and trust your gut.
Frank Manfre, Principal at Breakthrough Consulting Associates — Results Not Advice www.frankmanfre.com