Why Companies Get the Consultants They Deserve

By January 22, 2013 Uncategorized No Comments

David Fields knows what kind of consulting gigs he hates the most: those where an outside expert is bought in for political cover – to cement a leader’s preferred strategy, or to justify layoffs.

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“Cowardice isn’t a good leadership strategy,” the managing director of Ascendant Consortium tells LeadingCompany from his home in Connecticut, USA.

“It also makes the consultant look bad – people can tell if a consultant delivered what a company could have done in-house anyway.”

Fields is the author of The Executive’s Guide to Consultants, a new book aimed at improving the success rate of consultancy gigs, which he says is woefully low.

Consulting is big business. In America, large companies spend more than $800 billion every year on outside experts (of which $100 billion goes to management consultants, led by global giants McKinsey, Boston Consulting Group, Bain and Booz & Co). In Australia, research company IBISWorld estimates management consultants pull in $8 billion a year, with the leading companies being Accenture followed by the consulting divisions of global accounting companies Deloitte, KPMG and PwC.

The figures on how many consulting projects fail to deliver their ideal value make for sobering reading. “Common wisdom has it that 90% of consulting projects fail to deliver the value they should, and research suggests only one-third of projects are successful,” Field writes in his book’s introduction.

Is this dissatisfaction evidence that consultants are overused? Field says that’s not his experience.

“It happens, but it doesn’t happen with great frequency. Companies are cash-restrained – they very rarely bring in outside resources unless they need them.”

Fields posits another reason for why so many consulting gigs fail: a fundamental inability of company executives to shift their thinking when dealing with consultants.

Instead of dealing with the consultants they hire as experts, Field says, executives treat them like employees, demanding “deliverables” (reports, presentations, plans) rather than insight.

“A marketing plan is a deliverable, whereas an increase in market share is an outcome. A training session is a deliverable. Having people who know how to do ‘consultative selling’ is an outcome.

“You can say, ‘I want a report showing a full assessment of our plants and inefficiencies’, or you can say ‘I want to be produce goods more efficiently’, which frees up the consultant to look at whether or not such an efficiency is best achieved through plant improvements or whether investment in something else would be more effective.”

Business leaders are too often dubious about consultants, Field says. By focusing on specific deliverables they make ‘work’ for consultants, but hamstring the ability of these outside experts to actually offer much value.

An overly prescriptive approach can also lead to far less contact between consultants and the executives who hire them throughout the life of a consulting project. Executives, thinking they’ve been perfectly clear about what they want, leave consultants alone. But, Field says, consultants work better when there’s clear communication between them and the business.

“You can avoid problems in implementation by setting up good communication from the start,” he says. “That way you can deal with whatever comes up along the way.”

Another mistake companies often make, Field says, is to look for a consultant with exact experience in their industry.

“The value of a consultant is either in bringing you a certain capacity, such as a process they do all the time that you can’t do as well, or in bringing you a new point of view and helping you escape the ‘curse of knowledge’.”

But executives often don’t understand this, Field says.

Field’s central premise is simple – companies get the consultants they deserve.

“Be an absolutely outstanding client,” he says. “Outstanding clients get outstanding consultants, and outstanding results.”

Myriam Robin
is a journalist with LeadingCompany.

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