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What’s the best way to reap the benefits of consultants?
James Fulton, chief learning officer and global head of talent at Goldman Sachs, believes the reason companies often fail to fully benefit from the retention of consultants is because they “oversimplify the issues at hand or underestimate what it takes to create results” while treating consultants “as transactional vendors.”
In a column for Harvard Business Review, Mr. Fulton, a former external consultant, cited three strategies to benefit from consultants:
- Situational assessment: Companies are advised to fully assess their problems and the type of help required. “A lack of time, curiosity or even skill to adequately understand the problem at hand” often cause executives to oversimplify problems. Companies also often rely on a small number of advisors whose strengths are not always relevant to the problems.
- A humble mindset: Leaders can feel vulnerable when asking for help. Mr. Fulton writes, “Using help requires a willingness to be helped. That’s hard to achieve if you’re not open to learning.”
- Interpersonal skills: Collaborations between executives and the consultant team are required to drive outcomes together. Mr. Fulton writes, “Using the help of others is a key leadership skill since no leader, especially in demanding and volatile times, can do it alone.”
Articles and blogs around the hiring of consultants cite the benefits of expertise and unbiased opinions. The downsides can include their often high expense, their availability, given that they work with multiple clients, and a lack of guarantees.
In a 2017 Financial Times article, columnist John Gapper wrote that the rise of digital technology and data analytics has led to a surge in the use of consultants as companies reimagine themselves.
He warned, however, that an over-reliance on consultants or contractors can lead to “off-the-shelf solutions” and copycat approaches. “The curse of the consultants is that anyone can hire them, so their ideas soon spread,” he wrote.
Short-term consultant hires can also extend to longer term as the contractors promise incremental benefits. “Consultants are alluring in a world of changing technology and regulation, as their growth shows. But it is also wise for the buyer to beware of what they offer,” according to Mr. Gapper.
- So You Hired a Consultant. Here’s How to Get Your Money’s Worth – Harvard Business Review
- The curse of the consultants is spreading fast – Financial Times
- How Hiring a Consultant Can Help Founders in Business – Entrepreneur
- How to Tell If Hiring a Consultant Will Be Worth the Investment – Harvard Business Review
- What Is a Business Consultant? – Business News Daily
- 5 Things to Look for When Hiring a Consulting Firm – Entrepreneur
- One in Four Small Businesses Plan to Hire a Financial Consultant in 2021, According to New Survey Data – Clutch/PRNewswire
Discussion Questions
DISCUSSION QUESTIONS: What advice would you have for retailers and brands to ensure their investments in consultants pay off? What mistakes do consultants often make that undermine a successful engagement?
Poll
Loading …BrainTrust
Mohamed Amer, PhD
Independent Board Member, Investor and Startup Advisor
Melissa Minkow
Director, Retail Strategy, CI&T
The advice I would give is to make sure you have a clear understanding of the actual questions or problems, take time to write them down in a brief. A written brief requires thought and would usually be passed around to different stakeholders which helps to gain alignment on expectations. Clearly identify what success looks like and how it will be measured. Be open to being wrong in your assessment of the questions or problems. The consultant should have the guts to redirect you, not be “yes-men.”
Consultants often answer the question being asked, even if it’s the wrong one, because it benefits their own business versus pushing back on the prospect and suggesting there is another way of looking at it. They don’t want to risk losing the business and the client only realizes that when it’s too late. Consultants also often don’t push enough on what success looks like and how it will be measured.
Consultants often overlook getting out into the field and walking the store, doing their own observations, talking with people in trenches. They rely on HQ and often there is so much clarity from the front lines. Get that insight in the beginning, even before responding to a brief when possible.
A good start but by no means the full list: The consultant should be your friend, don’t treat him as the enemy; be frank, not cagey about the businesses problems; if the consultant is giving you answers before he has asked you questions, change consultants; enable the consultant to find answers within your organization, don’t make it difficult, you are probably paying good money for his time; make sure that your employees understand that cooperating with consultants is to the company’s and to their benefit, consultants do not provide great results working in a vacuum.
As a consultant, I have always worked based on the premise of “what is your opportunity and how can I solve it?” That means listening very carefully to understand the need, doing the appropriate research and providing options on how to tackle the need. The consultant must be transparent about recommendations – no matter how difficult the recommendations are to them.
Perfect response: “what is your opportunity and how can I help you solve it?”
Make sure you have a consultant that has walked in your shoes, and at least 20 miles further. Ask them what their greatest challenges were in a consulting engagement, and how it ended. Don’t hire someone who has no specific qualifying experience.
I’m always reminded of this definition of a consultant, “Someone who borrows your watch to tell you what time it is, then proceeds to keep your watch.” Apologies to other BrainTrust contributors, who I know, like me, make a living via consulting. Consultants can be a good source of problem solutions since they do not carry the baggage of working for the firm. However having said this the key is to insure that consultants really understand the nature of the problem they have been hired to solve. Plus, their success will be enhanced by providing them access to team members with various views on the problem(s) to be addressed. Finally, a successful engagement includes actionable results.
There’s a terrific video of a couple of consultants who provide a recommended solution to a problem. The manager who engages the consultants smiles and says, “great, do it.” To which the chagrined consultants replies, “We don’t actually do what we propose, we just propose it.”
The major consultancies operate on a land-and-expand model. They accomplish this while developing strong C-suite relationships and deep roots within the organizational fabric. For smaller consulting firms, their work tends to be more restrictively bound and transactionally tied to proof-of-work. Both miss the mark if the retailer or brand comes to rely on the consultants for core capabilities without increasing the company’s strategic capacities and skills necessary to compete and thrive.
My essential advice is to treat the consulting firm as a collaborative, not transactional, partner. The consulting firm ought to improve your company capacity to compete in the market. A successful client-consultant model unlocks your existing potential, helps you span boundaries to create company-wide synergies, and delivers breakthrough performance that lasts well beyond the engagement.
Unlocking existing potential and delivering breakthrough performance – I think that sums up the ideal consultant relationship. Well said!
I’ve been on both sides and the best way to reap the benefits of a consultant is to bring on experts that have actually worked in retail. Experienced retail consultants versus theory based consultants could make the world of difference in getting teams on board with new ways of working.
It depends on the work of course but if you are bringing on a consulting firm that has never worked on the shop floor or taken a product from concept, design and development to market then how can they truly understand what a new way of working could mean for your teams?
And by the way, encourage the consultant to speak to your staff,asking them questions. This will deal you aces of acceptance on hard issues if they think they are part of the solutions.
Have a clear understanding of what the deliverables will be when the engagement is over. This is important for a couple reasons. First to ensure that ROI is achieved. If the goal is to reposition my brand in the market for example, it would be good understand how they can help achieve that. This also helps with scope creep. In my career I’ve seen many engagements morph into more engagement, more projects, more issues uncovered — and more expense for the retailer, and not always a measurable outcome, even from the initial engagement.
Working with consultants is not the time to be defensive, or to withhold information. The best engagements involve open, honest communication, and candid feedback, both from and to the consultants. They also have defined objectives and commitment to implement recommendations after the engagement.
Too often clients view consulting projects as a handoff of an objective. They don’t dedicate the internal and personal effort necessary to achieve the objective. Great clients understand that they are hiring a consulting firm to complete a (hopefully) well defined project. And that the project is only one part of the initiative that the company is undertaking. The overall initiative cannot be successful unless the client stays engaged and follows through on the implementation (the hard part) of the solutions generated by the consulting project.
Retailers can absolutely benefit from consultants as they provide expertise, have a broader view of the problem/opportunity being addressed and offer an unbiased view which isn’t as influenced by internal politics. Having said that, many consultant engagements can be quite expensive and often are a “one and done” with no sustainable value built into the equation and a need for additional spending to get more value. The best consulting engagements are the ones where the consultants teach the retailers “how to fish for themselves” instead of handing them a “fish.” These engagements are the ones that invest in new capabilities and create fluent organizations that know how to use the right analytics and solutions to drive continuous value. The worst ones drive $x in short-term profit, only to leave the retailer hanging 18 months later with fewer shoppers, unneeded complexities and no additional infrastructure to support long-term growth.
My advice to retailers and brands? Listen to your own people first and stop using consultants as outsourced labor, translators from your employees to the c-suite, and — most importantly — don’t collect binders full of strategies – EXECUTE! My advice to consultants is equally simple: define the real problem, not the problem the client asks you to solve (in my experience they are usually quite different); always be honest, even if it loses you an engagement; be respectful of client culture, but don’t go native; and keep the interests of the client WAY ahead of any billing considerations.
Speaking currently from the consulting side, coming up with uniquely tailored solutions that are based on how the client differentiates itself is incredibly important. This ensures that the work meshes with the client’s culture and can make an ongoing impact/be sustained long-term. Spending extra time both in the initial “discovery” phase and the ending “hand-off” phase mean that the work specifically suits the business and the client’s employees are bought in for the long-haul.
Experience and results in the area where the retailer is asking questions speak volumes about who the right consultant might be. I would add the following advice. First, if you choose the right consultant, who has both experiences and results solving the challenge you believe you have, then you should be willing to let the consultant rewrite the questions you are asking in the context of the overall challenge. Knowing you have a challenge to resolve isn’t enough – you need to be asking the right questions to fully define the problem before you can produce a solution. The right consultant will help you do this. Second, the retailer and consultant should be able to jointly measure success, otherwise you may end up with a never-ending project, or worse, an incomplete solution that never proves itself. If the consultant can’t help you measure success, then you may need to keep looking.
I disagree with what Mr. Fulton suggests. We are cursed by “consultant” having come to mean “outsider coming in with the answers.” Companies need consultants who bring experience in order to work with companies. Then that experience is combined with the tremendous knowledge of the company team and something brilliant can result.
Today, though, consultancies are businesses built on massive teams (to generate enough profit) parachuting in to deliver answers which were fully formed before engaging with the specifics of the business. It’s no wonder consultant projects fail to deliver much impact.
As a retailer who transitioned into the consulting world mid-way through my career, I have a unique perspective. Essentially, the relationship has to be built around trust, transparency, and true collaboration. Every successful engagement’s foundation is built on the real and meaningful business challenges the companies need to solve, in addition to the ones they may be unaware of.
Management consultants get a bad reputation by not putting the company and the customers they serve as the top priority. Consulting companies should build their mission around building long-term servant leader relationships that help to drive meaningful business transformations. By developing realistic and achievable business strategy plans, these transformations could be achieved by partnering up the client’s SMEs with the consulting leadership team.
By being respectfully direct, management consultants have to challenge companies, and especially retailers, to self disrupt their operating models before they are disrupted by digital disruption and consumer behavior shifts.