MANILA, Philippines – A dear friend of mine who owns and runs a large family business in consumer goods hired a so-called “expert consultant” a few years ago to help HR redesign the company structure for future growth. The consultant they found spouted lots of stories about projects he had worked on, and really sold himself as an international guru on organizational design.
Tens of thousands of dollars later, the result was a bloated organization overloaded with costs and uncompetitive with the marketplace. The result was a “theoretical” design poorly rooted in the realities of running a business and how roles and responsibilities really work, a structure that failed to reapply best practices and tried-and-true approaches. Basically, a ton of money was tossed in the garbage, and huge amounts of reword were required to just get back to a good place.
Now, one can argue, rightfully so, that the company and HR leadership should have done a better job in vetting the consultant. Fair enough. But these are good people and they succumbed to a very persuasive pitch. At the end of the day, this is a story too often repeated: consultants who deliver poor value for their services.
There is an old joke that I first heard in the 1980s early in my career: There are three kinds of people in business: there are winners, there are losers, and then there are consultants, who are basically former losers who end up as consultants as the only way they can stay in the game.
It’s not a question of never using a consultant — sometimes one needs an external perspective to help set the right direction. Indeed, some people and companies are far too dependent on consultants. I once had a marketing leader who always wanted to bring in consultants on branding and the like. I literally had to confront the guy and say, “Why are we employing you to lead marketing if all we do is hire consultants to come in and tell us what to do? Isn’t this what you are here to do?” Yet there are exceptions nonetheless when getting the external views of a consultant can be immensely helpful.
Picking a good consultant is like choosing the right nanny for your child. It takes a good deal of vetting, asking the right questions, and getting a feel for the person. Consulting, after all, is purely a people business. People make or break any consulting project.
There are three major lines of questioning I recommend when choosing a consultant:
Pedigree. One time I had a consultant come and visit me who professed to be a branding “guru.” So I asked him what brands he had worked on and led. He didn’t have an answer. Ends up he never really worked on any brands and had only read some books. In his own mind he was a branding guru, but the facts belied a different truth. Your business is your money and you want — you deserve — a proven pedigree. On what basis does this consultant claim to be an “expert” on the subject matter? Where did he work? What was his track record? How many years did he put in? Personally I would recommend only going with consultants who have worked for the best companies, Tier 1 companies like Procter & Gamble, Coca-Cola, BAT, GE, or IBM. These are the places that turn out top talent, train well, and have decades upon decades of success. They pass muster as publicly traded, high-profile companies. In addition, I would look for no less than 15 years of proven success in business before hiring as a consultant. Business is as much art as science, and it takes time and experience to really know the nuances enough to consult effectively. Bottom line, 15+ years in a Tier 1 company is the first step.
Who have they successfully worked with? You don’t want to be the client upon which a consultant is “cutting his teeth.” Your money is precious and you must ensure it is invested where it has high odds of paying a return. Who has this consultant worked with on like projects? What kinds of companies did they work with, the “big boys” or just smaller fish? Did you check their references and see what prior clients think of their work? Check who they have worked for. Demand consultants who get hired by the best companies out there. And verify that their past clients are satisfied.
What is their attitude about the details of the engagement? The consultants I trust are the ones who are brutally honest. They will tell you, “I am not actually qualified to help you on this kind of project.” They want to preserve their reputation and are prepared to turn down a paycheck to ensure they can deliver the work. The consultant who continually says, “We can do that” and is vague on past experience gives me shivers down my spine. Nobody is a master of everything. If you are hiring a consultant, you are hiring, supposedly, a master in a given area. Otherwise, why hire them? The guy who tells you he can do it all is someone to send on his way. Final point: If all the consultant wants to talk about is his fees and payment schedule, my advice is to walk away. In fact, don’t walk, run. Their focus is all on getting paid. And they will be much less centered on doing a quality job.
There can be a role for consultants in certain business situations, and when a fresh external view is needed. If you want advice on police work, you ask a 20-year cop who walked the beat, not someone who studied criminal justice and has watched plenty of TV shows on policing! The same is true of hiring consultants. There are many out there, but few that pass muster. It’s like panning for gold. You will have to sift through lots of sand to get them, but the real nuggets, the gems-of-gold consultants, are out there. And the right one can be a boon to your business.