There are good reasons to hire consultants. You can pull them in to add their objectivity, specialized expertise or the additional capacity you need to meet a deadline. But some of the reasons that consultants are hired are just wrong. Here are six:
To offload the dirty work. Some executives want to bring in a hired gun when they're uncomfortable with the task at hand. One common version of this is hiring a layoff specialist to terminate staff. But good executives — good leaders — aren't afraid to get their hands dirty.
If a staff reduction were imminent, they wouldn't shirk their duty to explain the situation, and they would lead the layoffs personally. That doesn't mean there aren't good reasons for hiring HR consultants. They can help coach the layoff team and ensure that labor law is followed. But the executive himself needs to do the dirty work.
To avoid accountability. Some executives are loath to make decisions. One stalling tactic that these types favor is to commission a study. A consulting project allows them not only to postpone the decision ("Oh, I'm sorry, but a decision on that simply isn't possible until the study is complete"), but also to shift responsibility for the decision to someone else ("Here's what my expensive study found, and it would be plain reckless not to follow the recommendations of Famous Consulting").
Studies certainly can assist in making decisions, but while consultants can clarify issues, present trade-offs and recommend ways to improve, they have no authority to implement their recommendations — and no experience within the organization to help them judge the worthiness of their own recommendations. The client remains responsible for the final decision.
To justify a decision. Sometimes a manager is bent on implementing a decision, even though it is not the best course of action for the enterprise, because it will benefit him or his department. As he seeks to justify this course, he might frame a very narrow question with tight constraints, then shop for a consultant who will tell him what he wants to hear. He will probably be able to find someone who will do that, but that doesn't make the decision right.
To marginalize existing staff. At times, some executives, for reasons of their own, see a consulting engagement as an opportunity to do an end run around the existing IT staff. They direct the consultants to limit their contact with IT and to discount IT staff perspectives during IT strategy, architecture or outsourcing engagements. This can be a self-defeating tactic. Even if the IT organization is dysfunctional, its staffers are sure to have useful skills, experience and perspective. They understand the informal norms and the organizational history. Many of them have worked for multiple organizations and have expertise not directly related to their current job. Failing to engage these people insults them and can undermine the project.
Personal animosity can lie behind such moves. In one organization that I'm familiar with, the CIO and the vice president of business planning didn't get along. The VP engaged a consulting firm to cut costs by outsourcing major parts of IT, finance and HR, cutting IT out of the process. This became evident when one of the CIO's direct reports was refused an assignment to the outsourcing evaluation team, even though she had previously been a vice president at a major outsourcing company. After that rebuff, IT disengaged. While IT staff were polite and answered the consultants' questions, they offered nothing beyond what was asked. Eventually the effort collapsed, wasting $3 million.
To avoid paying taxes and benefits. In an effort to skirt employment law and reduce costs, some organizations fill low-level positions with contractors rather than employees. This is a dangerous game. If the organization exerts significant control over the way these people perform their duties, the IRS and other government agencies may consider them to be employees who are entitled to benefits. If the organization gets caught, it will end up paying significant penalties, probably in excess of what it sought to save, and find itself in a legal nightmare.
To help an out-of-work friend. Don't hire unemployed friends unless they have the exact expertise and experience you need. Enough said.
When you hire consultants for the wrong reasons, other employees and executives notice, and it doesn't win you any points. Organizations lose respect for individuals who squander corporate resources and don't have the courage to make responsible decisions. Good executives use consultants properly; poor executives use them inappropriately. Choose which side of the fence you want to be on.
Bart Perkins is managing partner at Louisville, Ky.-based Leverage Partners Inc., which helps organizations invest well in IT. Contact him at BartPerkins@LeveragePartners.com.
