Consultants, hire or don’t hire?

“Chris, please don’t be like our previous consultants. They just took all the team’s ideas and presented it to management without crediting the team”

One of my previous clients

Those words struck a chord. One of the middle managers that I met in my consulting work said that to me the first time we met, and I found it hard to respond. In that specific engagement, I noticed the frustration that the team had with consultants. They felt that the consultants do not provide value and are vampires that sucks blood from the organization. What’s the result of this? They become more resistant to change, they were not very cooperative with the consultants work, and the transformation or program that the consultants were tasked to do becomes much more difficult.

Listen to your team, don’t spend millions to get consultants to just gather ideas from your team

This is a pitfall that management often falls to. They hire consultants to discover ideas on how to make their business more efficient, or how to improve their business. What do the consultants do? They build a framework to answer the question, learn about the organization, interview the team members, compare with other organizations, synthesize the findings, and report to the management. Consultants are great at synthesizing information and presenting it. Thus they can be more convincing to the management. They are also hired by senior management, so they get a lot of exposure to management, while the normal employees working in the company might not even meet the management once a year.

So what’s the result? The normal employees build up resentment towards the consultants as bugging their normal work while not sharing the “glory” with them. The unintended side effect is also resentment towards the management! “Why did our management not listen to the things we’ve been saying for years, and instead spent millions for other people to say it to them?!” This is not a good cultural dynamic.

Seriously. There are great reasons to hire consultants, such as to access expertise that you don’t have, to improve your teams’ expertise and to do projects that are non-frequent, e.g., market entry to a new country or zero-based budgeting. Ideally, these activities would help you build your team, and maybe allow your team to do the activities by themselves afterwards.

Use consultants to build your team’s skills

You should never rely on a team of 100% consultants. Use the consultants as a way to improve your team’s skills, and help your team progress their career by being involved in high visibility projects. You could do this by creating a combined team with your employees, and get your employees to be the one presenting to you and showcasing the result and what they have learned in the process.

These people that you put in the team should own the deliverable, and be empowered to make sure that the organization act upon it, be it making sure the strategy is implemented, making sure the implemented tool is utilized properly, or even monitoring whether the new organization structure that was implemented is achieving the goals set at the beginning. This sense of ownership is integral to make sure you are not wasting money by hiring consultants.

Additionally, think about what else you want to have in your culture that you could learn from the consultants. E.g., the problem-solving approach, some specific expertise. Then try to get your employees to inquire more about it, and get them to learn. It is unlikely that your team will completely absorb the consultants’ culture, but hopefully, your team will be able to adjust a little bit towards the direction you want as a leader.

Consider creating an inhouse consulting

A lot of time in consulting engagements are spent in learning about the organization and how it works. If you hire consultants frequently, it might make sense to create your own consulting team that understands the organization deeper, and can execute projects more effectively. Many major organizations have recognized this and established their own inhouse consulting. HBR has covered this topic in 2015.

In 2020, I have had the luxury to meet inhouse consultants, and a key difference that I noticed was how much ownership they felt in their projects. As they are still in the same company after a project is done, they felt more responsibility to provide the right recommendations or implement in the right way. The way engagements are structured in consulting firms, people change clients often, and thus, feel less sense of responsibility for the long-term result of their recommendation.

Finally, inhouse consulting is a great substitute to “Leadership Development Program” approaches. It allows the team members’ exposure to many parts of the organization, work with high visibility projects, and make their impact. They would then be able to move on to other parts of the business after a few years in the inhouse consulting.

So?

In summary, please don’t hire consultants before you ask your team and assess whether the outside expertise is truly necessary. Hire the consultants for non-frequent projects that require expertise you don’t have. Then use the time with the consultants to improve your team, help them further their career, and adjust your culture. If you hire consultants often, create an internal consulting arm. It could save you millions, hasten project executions, and build a pipeline of business leader talents.

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