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What is a Consultant’s Value?

I have been a consultant for some time now, and while some things are as expected, others are coming differently than expected. Going in to this, I thought I understood what it meant to be a consultant and I imagine many of you reading this think you fully get it too. With this in mind, I thought it would be valuable to explore this a bit more and really explore what consultants provide.

The Traditional View of Consulting

I think most of us imagine a consultant as someone brought in to provide expert advice and assistance to organizations to help them improve their performance, solve specific problems – technical, general, industry related, and achieve their strategic goals. The overriding view is that the approach is often around finding efficiencies, reducing costs, or analyzing a situation to provide data and recommendations. Often, there are specialized consultants that have subject matter expertise too who can be brought in to tackle highly specific challenges. Some may be focused on niches like organizations and people vs others that are general consultants that focus on strategy or general analysis and research. Altogether, there is a wide range of types of consultants and services that are provided.

Have you ever been on a call or in a meeting though, and you are asking yourself, why is this person needed and what are they doing?  Have you ever said, I could prepare this report or get the data? Or maybe you’ve asked yourself, of course we know the answer, why are we spending all this money having someone prepare a report or presentation to tell us what we already know? Maybe you’ve said this person is the pain in the behind and is making your life harder for no apparent benefit to you or the organization. Trust me, I have experienced a wide range of consultants and reactions and all of the above is normal and in many cases is a perfectly justified response.

Why do consultants exist?

The best analogy I have heard is to think of a consultant as a doctor. By this, I mean a consultant needs to be able to connect with the person (people) that they are talking to and try to understand the underlying need versus the presenting need, like the way a patient will see a doctor for something, but the underlying cause might be different than the symptoms being presented.

This is very common in consulting in that the consultants really need to understand the problem lying beyond what appears to be the problem. Another way to look at this, is a consultant needs to be good at asking “Why?” over and over and over until the root cause is found.

So really at this end of the day, consultants offer 3 key points of value to a company:

  1. They can approach a problem from a neutral or different viewpoint without biases inherent in the company
  2. They can solve problems with industry or functional expertise
  3. They provide legitimacy to a decision

The first two above are probably self evident to most of you reading this, but the last one about legitimacy is the often overlooked aspect of why consultants are brought on. Often a decision is being considered, but there may be other views or uncertainty and when a decision is big enough, so spending a little money to have it independently verified and risks identified can be a great business decision. Those making the decision(s) then have a respected subject matter expert verifying their decision and identifying risks so they can address those appropriately and move forward. When you think of it this way, it’s a pretty easy return on investment to justify to spend a little money upfront to have greater assurance in the decision being made.

Types of consultants

There are really 2 types of consultants:

  1. Operational or Subject Matter Expert (SME) Consultants
  2. General Consultants

General consultants would typically be more focussed on solving problems, working with senior leadership on strategy, analysis, etc. Subject matter consultants are more specific to industry and or function. All in all, general consultants perhaps make up 5-10% of the consulting industry, as its really the SME consultants that get pulled into niches and specific situations and are often more affordable. The data also supports the fact that the SME consultants deliver exceptional value to companies because it is really difficult to replicate their specific skills internally. The general consultants are different story and its difficult to find independent data supporting their value, but this is likely more so due to the varied and grey areas they operate in, so its difficult to tie specific outcomes in all cases to them.

Final Thoughts

There is a time and place for consultants and more often than not, there is value in using the right type of consultant for your situation. While an immediate return on investment may not be seen, there is also value in legitimacy and minimization of risk in decision making that comes from using consultants. However, if you find yourself using a consultant to do everyday duties for extended periods, its time to look at bringing that role in house and finding someone you can invest in rather than spending your money on outside resources.

R Laidman, C.Dir., P.Eng., MBA