Corporate America’s dependency on consulting firms is nothing short of substance abuse in the purest form. The fact is most CEOs suffer from this very dangerous addiction and they don’t even know it – they are clearly in need of an intervention.
Addicts don’t often admit they have a problem. They tend to rationalize and justify their behavior as normal. Here’s the thing – normally doesn’t always mean admirable or correct. In fact, normal most often means mediocre. Just as addicts are in constant search of a quick fix, misguided CEOs are in search of a perceived easy solution. It’s easier to throw money at the symptom rather than do the work to solve the problem. Don’t look for the easy solution – look for the correct solution.
What CEOs need to understand is that the interests of consulting firms are rarely aligned with those of their clients. Far too many consultants view the world through the lens that leads them to believe they don’t get paid to solve problems – they get paid to prospect for more work. Their job is to increase utilization and billing by expanding your problems not cut-off their revenue by solving them.
The scary part of this story is that CEOs hooked on the crack consulting firms are selling don’t just number in the few, they all have this monkey on their back to varying degrees. I have yet to see a Fortune 500 company that isn’t spending tens if not hundreds of millions of dollars on outside consultants. I’ve also yet to see a company that couldn’t substantially reduce that amount and is better off for doing so.
I challenge anyone to show me a single Fortune 500 company that doesn’t have McKinsey, Bain, BCG, Booz Allen, etc. camped out on site “saving them money.” I also challenge anyone to show me a large scale consulting initiative that hasn’t taken longer, cost more, and delivered less than originally expected.
My advice to chief executives; immediately check your company into rehab and detoxify your organization from the great purveyors of mediocrity (best practices). As a CEO, you should NEVER hire a consulting firm for strategy or innovation work. It’s not their job – it’s yours. Dependency on consulting firms signals little more than a company’s talent pool isn’t as strong as it needs to be.
If the first thing you do when the going gets tough is to reach out to a consulting firm, you are an addict. If your team would rather outsource than insource you have a team of addicts. Leaders should require more of themselves and their teams. Leadership is not a contract to be awarded. Rather than offering your team “consulting resources” try offering them better leadership. If your team can’t deliver the outcome you need you don’t need a consulting firm you need a better team.
Consulting firms are not a competitive advantage – they are a contingent liability. Consultants are often used as a crutch and end up making it easy for employees to become lazy. If your team isn’t willing or able to subject themselves to the rigor and discipline necessary to solve problems and innovate, don’t give them consultants provide them with mentoring, coaching, and development. More investment into your team and less into consultants will produce a stronger workforce, a healthier culture, and a competitive advantage.
Creativity is not born out of consultants implementing best practices. Think about it like this – how do you win by receiving the same advice and solutions being sold to everyone else? Answer: you don’t. The minute something is dubbed as a best practice, it’s outdated and in need of innovation. Hire better talent and then inspire them to seek next practices.
To be fair, there are valid roles for consultants. However, most of the engagements I witness have the tail wagging the dog. Consultants are best used for short-term engagements led by and working in collaboration with their clients. Use consultants and other outside-in thinkers to challenge and evolve your thinking not do your thinking for you.
My suggestion is that companies build competency not contract for it, that they create independence, not dependency, that they solve problems not purchase implementations, and finally that they move from best practices in search of next practices. Invest in your people not someone else’s people – you’ll be glad you did.
Thoughts?
