Many organizations invest significant amounts of time and energy in consultants only to later hear employees and managers say things like, “they didn’t tell us anything we didn’t already know,” or “their ideas don’t work in the real world.”
As someone who has worked extensively as a consultant and hired consultants, I’ve had a broad range of experiences. Under the right circumstances, consultants can be very valuable, but often they don’t seem to provide any measurable ROI, while creating significant distraction in the process.
Why is this so?
At the most basic level, many organizations often contract with consultants to solve problems or achieve outcomes for which a consultancy model is just not the right choice to begin with. Things like “improving quality” or “developing growth strategies” are reasonable organizational goals, but those things should probably be core competencies developed by the organization itself rather than something that comes from unaccountable external consultants. There is certainly value in having an external set of eyes validate a growth strategy or quality initiative, but if an organization is asking consultants to determine the course of action, that arrangement is likely to ultimately fail. It is likely to fail because even if consultants have a high level of appropriate industry knowledge (and they often don’t), they don’t have any accountability for executing the strategies or suggestions they present. Moreover, by definition, consultants are “outsiders.” They rarely have a meaningful understanding of organizational culture or history or politics. They also tend to work in a silo based on the nature of their contract. As a result, they often have no idea how their recommendations relative to “improving sales,” for example, are connected to the organization’s training or marketing capabilities. Lastly, and this is really important, consultants are almost never involved in the hard work of operationalizing and implementing their recommendations. Most often, they provide a report, do some follow up conversation and move on to the next client, while the employees in the organization are left to implement strategies that many do not fully agree with, that are often not appropriately resourced, that don’t fit into “normal” operations, and that no one in the organization owns.
Organizations are more likely to solve the kinds of challenges noted above by providing training and development opportunities for their own employees and managers, and having them use their new found knowledge and capabilities to develop, then implement, new operational strategies that they own and are enthusiastic about. The training and development activities can certainly come from external sources, including consultants, but that is different than asking consultants to provide the new strategies themselves.
On the other hand, consulting projects are much more likely to provide valuable outcomes if they are designed to produce tangible products or resources that enhance daily operations. For example, hiring a consultant to write a training curriculum or code programming scripts that will add additional functionality to a back office or customer service computer application, tend to provide great ROI because they result in concrete tools the organization can use to do things it couldn’t do before. I have also found that consulting projects that directly transfer skills and knowledge (rather than abstract ideas or strategies) are generally very successful because they empower employees (who are the ones left behind when the consultant leaves) to work in different, more effective ways. Similarly, consultants who can identify and articulate very specific, actionable changes in a process or who can provide an instrument to accomplish articulated goals, are generally seen to bring real value.
Additionally, in the big corporate consulting firms, most of the consultants they put in the field are very young, very inexperienced entry level professionals, often in their first jobs out of college, who have little or even zero actual operational experience. They work very hard and they’re very smart, but they have no internal “gut check” capabilities when it comes to the real-life viability of their observations and recommendations. It is also common to see consulting teams in which, despite their intelligence and work ethic, not a single member is actually an operational expert in the industry or subject area of the consulting project.
The big firms have great resources, particularly when it comes to research and technology, but they also tend to have deep biases toward what they’ve already done for other clients. Because of that, contracting organizations often get modified versions of previously dispensed advice, suggestions, models, etc. In fact, in certain areas, the consulting is actually based on previously designed templates that get repurposed for new clients. Sometimes the templates are the product of very high quality work, but the very nature of the template framework pushes consultants in pre-determined directions that can miss critical context for a specific organization.
When organizations find themselves dissatisfied with consultants, the problem is generally not the concept of consulting itself. In fact, under the right circumstances, a good consultancy can bring significant value to an organization. The reason consulting arrangements often do not bring the desired value is typically because of a mismatch between what the organization needs vs. how consultancy models usually work. For most operational issues, I have found that “boutique” consultancies that are experts in the subject area and industry of the consulting work are often more effective than larger, generalist firms. Of course, the opposite can also be true, particularly if a project requires deep pockets and resources on the part of the consultant. This can be the case with large research projects, for example.
In short, if an organization finds itself using a consultancy to compensate for what should be core competencies or if the consultants are not experts in the work of the organization, there will likely be dissatisfaction on the horizon. On the other hand, the more tangible, applicable, and customized a consulting product, the more likely it is to bring value.