In a well-run company, central corporate groups are kept lean, especially for areas where there are only occasional demands. There is no point in having a big corporate strategy group as a standing entity if strategy is only really reviewed and worked on from time to time. But if this is the case, as new initiatives arise, the environment changes or questions are raised about whether to continue an ongoing activity, how do we find the resources to answer these questions?
The answer is consultants. And there is probably nothing that arouses as much passion among corporate leadership as the subject of consultants and their value. Too many of us have been subjected to the effects of a large team of consultants coming in to review a broad swathe of the company, with resulting chaos and turmoil. Sometimes it works out, but most of the time it doesn't.
But McKinsey, Booz Allen, BCG and their brethren of the consulting world have a function, and a very useful one at that. They help us expand the workforce, bring new ideas to a problem (often new to us, not to them), and mobilize reserves of data and information that are difficult and time consuming to access.
So if you are asking a person in the company to look at the intellectual property strategy, or the procurement strategy, or whether we should be operating in South Africa, or what the opportunities might be in the pulp and paper industry for an oil company -- whatever the challenge, let's get that person some help. Help not just in the form of a small temporary team to tackle the problem (which may be necessary), but help also in the form of consultants who can make the project live.
I learned this lesson the hard way, the first time I had such an assignment, by trying to do everything myself (showing how much money I could save, as well as how smart I was) with a very small team, trying to tackle a big problem. I got something done, but it was not at the level of professionalism that my management had a right to expect. With a little outside help, I could have turned some good ideas into a really good strategic project.
As we all know, consultancy firms, even the biggest and most competent, are not uniformly capable. They have strengths and you have to select so as to play to those strengths. Indeed, what we are sometimes trying to do is be the fourth or fifth client of the firm in a particular area, so we get the benefit of all the accumulated information and thinking. But we also want innovative thinking, and, above all, responsiveness to the challenge we are facing.
Consultants must not be encouraged to parrot back to us our prejudices. If they do then they are not earning their keep. Nor must they recycle some stuff from their files that is only marginally relevant. The best will never do this.
For the best firms, success requires a lot of effort on your part as well as on theirs. You have to be there to interact with them, to be sure that their style of presentation suits your own company culture, and to be certain that what they are telling you is well grounded in evidence. After all, in the end you are not going to present this to your management as the McKinsey report, but as work that you are willing to stand for yourself.
As the employer of the consulting firm, you need to be very clear about who is actually going to be working on the project. It is a favorite trick to trot out the very sharp consultant when they are trying to win the business, replacing that person with someone at a much lower level of competence when the work is actually going to be done. This won't happen when they are working for the CEO, but it will when a more junior executive is leading the project.
Substantial engagements with a single consulting firm gives you a lot of leverage over who works with you, and a lot of knowledge about who is really able to deliver on a particular kind of project. But that does not say that any one firm is best for all sorts of jobs. I think that many of us find that some are really good on strategic problems but not much use on driving operational excellence, and vice versa. Some are very good on organization, others on technical matters. These big consulting firms develop personalities, strengths, and weaknesses. They go through periods of increasing capability and periods of decline. So to really get the best value for your money you need to know a fair amount about them. That up front effort will pay off in the product you get.
About Leadership is a series of 52 columns on corporate leadership -- essential skills, leading teams, managing your career, the strategic and business practices to make a company and its leader distinctive from competitors. These columns will be of interest to people leading small and medium sized companies today, many of whom have not had much formal training in management skills and techniques; for the many people in big companies who aspire to senior management; and for anyone who thinks: Give me a hint, how can I do this better?