Should you hire a consultant?

(MoneyWatch) COMMENTARY The well-dressed man walks deliberately up to the podium, looks solemnly over the crowd, and says, "My name is Steve Tobak and I'm...," he hesitates, takes a deep breath, then continues, "I'm a management consultant."

Yes, meeting with a potential consulting client for the first time can feel a little like a cancer survivor or an alcoholics anonymous meeting. When it comes to even the idea of bringing in a management consultant, the number of jaded executives in the room -- not to mention their blatant skepticism -- is usually extremely high.

And you know, I don't blame them. If I were in their shoes, and I have been, I'd feel exactly the same way. You see, the unfortunate truth is that an awful lot of consultants, especially the management and strategic type, give consulting a bad name. Which is probably why CEOs and boards are so reluctant to hire them. Even bringing it up can be risky and contentious. 

Which is sort of ironic because that's what I do for a living. And yet, it was the furthest thing from my mind when I quit "the life" of a corporate executive and decided to do what I love most for a living: advise companies on how to solve their problems. Who knew I was turning to the business equivalent of the dark side of the force?

My first meeting -- must be going on 10 years ago, now -- was definitely a sign of things to come. Since I'd recently left my job as the chief marketing officer of a public company, I was initially contacted by an executive recruiter about a similar position at a competitor.

I said I wasn't interested, but would be happy to chat with the CEO to see if I could help on a consulting basis. We met several times, but at the end of the day, he wanted an employee, not a consultant. Our final conversation went like this:

"So let me get this straight," I said bluntly, "You want to cough up big bucks and stock to hire me as your VP of marketing, but you won't hire me as a consultant,

"That's right," he said without hesitation.

"Even though I'm telling you flat out that I can help you more effectively and less expensively that way?" I replied. "By the time you find your VP, you'll be on the right track and ready to go."

"Look," he said, "I once hired a big management consulting firm. They spent a ton of our money taking up our precious time and learning our business, then told us everything we already knew in an overdone PowerPoint pitch and a big binder which is over there on the shelf collecting dust."

"But I'm not them, Jim. I'm me. I'm not a trained management consultant with an MBA. I'm a senior executive, just like you. You know me. You know my track record. You know what I'm capable of doing."

"Doesn't matter."

That CEO went on to hire his VP of marketing. Then another. The company never went anywhere, but the CEO did -- out the door. The new CEO did the same thing. "Meet the new boss, same as the old boss," as The Who song says. Now, after a decade of poor results and zero shareholder returns, they're selling the company for peanuts.

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Does that make me feel any better? No, not even a little. I actually sympathize with CEOs, boards, and management teams that are justifiably concerned about investing precious time and resources and ending up with nothing to show for it but generic plans with cool-sounding buzzwords based on management fads and self-serving research.

Don't get me wrong. I'm not saying every big management consulting firm is a waste and all boutique firms are the way to go. I'm just telling you there's a relatively common perception out there and, if it looks like a duck and quacks like a duck, then maybe, just maybe, you're looking at a duck.

Which brings us to the age-old and hotly debated question: Should you hire a management or strategy consultant? Well, here's my advice for any company considering it:

Don't let them park the school bus in your parking lot. Senior level consultants will pitch you. Just make sure that senior level people are actually going to do the work. Yes, they cost more than the MBAs right out of school, but you get what you pay for. And ask yourself, honestly, how in the world does it make sense for a consultant with no real-world experience to be advising you on how to run your company? Seriously.

They say they're objective, but are they really? A major benefit of using consultants for critical strategic issues is that they're outsiders, so they're objective. Unfortunately, they're also vendors and you're a paying customer, so do they really want to bite the hand that feeds them by telling you the straight, honest truth? The answer to that is sometimes linked to the next point.

Can you handle the truth? I'll never quite understand this, but all too often CEOs and management teams will hire a management consultant and then be resistant to the truth. I've seen it all, even the CEO of a consistently underperforming billion-dollar public company argue that his stock went nowhere for 10 years because investors are idiots. Others dismiss consistent direct customer feedback. Here's the thing about that. Those executives no longer have those jobs because their companies no longer exist.

Are they incentivized to be efficient? Just as with any contractor you pay by the hour, consultants are not necessarily incentivized to get the job done quickly and efficiently. Yes, they have their reputation, I know, but there's a reason why there are so many skeptical and jaded executives out there. It really comes down to trust, so before you make the commitment, make sure it's reciprocal. That often comes down to a relationship between you and whoever's going to be managing your project or the head of the firm's practice.

Beware of process and research overkill. I post blog articles in various LinkedIn groups, including several oriented toward strategic and management consulting and change management. Let me tell you, the technical minutiae and process gobbledygook these people debate and obsess over is so over-the-top crazy it frightens me to think they're paid to do that for a living, let alone advise a management team. Process and research are a means to an end. No more, no less.

Of course, I welcome any corroborating or dissenting views. And just for kicks, it would be great to hear an insider's perspective on how the Boston Consulting Group did over at Yahoo. It sure doesn't look pretty from the outside. I'm just saying. 

Image courtesy of Flickr user MDGovpics

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