Why Consultants Destroy High Growth Businesses

There are more external “experts” than CEO’s running businesses. Distinguishing between those, who can and cannot genuinely help you address organisational issues, in support of your strategic direction is becoming increasingly blurred. This is accentuated by several factors:

1. External: lower barriers to entry and little or no requirement for qualifications amongst most experts.

2. Internal: Executive and senior management abdicating their responsibility to take tough decisions. A belief a large consulting firm’s brand will confer greater credibility and efficacy to the preferred alternative. A sense that if it doesn’t work it is easier to caste blame and point the finger at the consultant (“risk free” recommendation).

In high growth businesses, where the stakes are higher and inherently there is a need to make faster and wiser decisions. The consequences of hiring the wrong expert can and often is a greater business risk than choosing an internal candidate (assuming a qualified resource exists). This might sound counter-intuitive from someone who “sells” external expertise. However my experience is that many organisations, large and small, reach for the consultant’s speed dial number, way too early in the thought process. This is not to say that external experts cannot be very valuable but the conditions within the business must to be right if you are going to extract significant value.

So what are the right questions to ask when the executive team or line managers decide to first approach an external expert

  1. “Why?” – why do we we need an external expert? (skills or expertise we urgently require and lack to profitably grow the businesss), why now (is there a short term opportunity or set of circumstances that makes this a priority), why on the proposed engagement basis (special circumstances that dictate a collaboration of this nature)
  2. “Credibility” – does the individual(s) come with testimonials, references and case studies tightly customised to our perceived “need”? Can we quickly check out their ethics and professional approach? Can we see hard evidence of the client improvements derived from their past engagements (results, expertise, speed)? (You never want to be someone’s “guinea pig”)
  3. “Rapport” – do they display impressive social skills, breadth of intellectual knowledge and levels of trust? (Be wary of those in a rush to form a relationship without an obvious reason. Equally a generalist may very well be preferable to a niche specialist, who knows a lot about a little but may not be appropriate for a high growth business with a broad array pf challenges)
  4. “What Is the Cost of Not Hiring External Expertise?” (Opportunity Cost) – how is the businesses profitable growth, the speed of moving towards your goals or the contribution of key people worse off? (You need to frame the value from an appropriate base line to enable the investment to be put into the appropriate context.)
  5. “Engagement Basis” – can the external expert(s) tightly customise their intervention to your explicit needs (services offered, speed, access in appropriate working hours, minimum disruption, fees linked to your “value” not their time deployed and so on)? (You don’t need to be paying for expensive offices, teams of highly paid implementers, expensive cars, flashy IT systems and glossy brochures. You want to pay for results and value).

One final point, there is a start and a natural ending to most assignments with external experts. Both stages need to be planned. The “end” may very well evolve into repeat assignments or a retainer relationship (sounding board). However  a relationship with an external expert must never be a co-dependency, where the future of your organisation is beholden to the whims of the external expert. You are the manager. You are paid to produce results and where appropriate, take the tough decisions. You are ultimately accountable and it is right that you are appropriately rewarded for the results that arise.

© James Berkeley. All Rights Reserved.

 

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