So wait, doesn’t the existence of consultants imply a lack of business trust in employees?

Consultants and Trust

A couple of quick stories before we get going here:

1. Used to work with a kid who hated the sheer idea of consultants (like someone in Office Space). Whenever something happened in his office, he’d snark to the senior leaders, “You should put a consultant on it.” I saw him say that to a CFO-type when the CFO was looking at some rain that had accumulated under a door to an outside patio. I LOL’ed.

2. I personally don’t 100 percent understand what consultants do. In 2005, I stayed with my cousin in Boston for 2-3 days. He was a consultant at the time. He apparently was always flying to Kansas City to, well, “consult.” At the time I was very young (24) and stupid (-er than I am now) and kept thinking to myself, “Wait, what? Why wouldn’t a company just deal with their own problems? Why would they hire my cousin at such an insane rate?”

3. Everyone you meet in business school seems to race towards the consulting world, unless they’re super into marketing or something. It makes sense. You get paid a lot, generally-speaking, and you get to see a lot of the U.S./world, even if most of it is hotel ballrooms and corporate conference rooms. It probably also makes you hate airlines and air travel even more than most people do.

4. I once met a consultant in Las Vegas, at a bar. He was, at the time, consulting for a fast-food restaurant chain. I assumed it was about revenue growth, but no; he was helping them with their logo. In the conversation we had, he told me that (a) “I was in law school, but being a lawyer seemed so corporate, you know?” and (b) “My real goal isn’t to be a consultant. It’s to change the Internet as we know it.” If you take (a) and (b) together, that kid is a total fucking dickbag. A lawyer is more corporate than a management consultant? ROFLMAO.

Anyway, I digress.

Here’s my issue: the sheer existence of consultants, right? The idea that they come in and fix stuff for you, then depart? Kind of like a week-to-week corporate Bar Rescue, almost? How can we say we live in an era that’s starting to value trust and transparency and employee engagement if consultants exist?

Let’s start here, with probably the most basic and logical reason why consulting firms and consultants even exist:

My guess is that most intellectuals underestimate just how dysfunctional most firms are. Firms often have big obvious misallocations of resources, where lots of folks in the firm know about the problems and workable solutions. The main issue is that many highest status folks in the firm resist such changes, as they correctly see that their status will be lowered if they embrace such solutions.

Yep. Every place I’ve worked has multiple degrees of dysfunction. That’s a true reality. And because everyone ultimately fears incompetence and what it might do to their personal standing (see here), dysfunction can advance at warp speed. At that point, it’s probably better to get “a fresh set of eyes” (consultants) on a problem. There’s also this, from the same article; this part makes sense financially:

To me, it is easy to understand why consulting firms attract so many elite students, given the wages, prestige, and job experience they offer. And it is also easy to see why firms might pay a ton for consulting, relative to law and finance – changing your basic business strategy can conceivably add enormous value, while minor changes to contract details and financing terms have limited value.

OK. So now we somewhat understand and know why consultants exist, and the value they provide. Let’s add one political nugget:

1. Political leverage: CEOs that want or need to make an unpopular decision often bring in a consulting firm to help. This provides ammunition to recommend an unpopular or risky decision to the board (expansion into a new business line or geography, or shutting down a plant). The CEO can also distance herself from an unpopular decision by blaming the consultants. Finally, if things go wrong, consultants are a handy scapegoat.

All this still makes sense in terms of how humans actually think about things and function day-to-day.

Now here’s the problem: if you’re bringing in consultants on something, aren’t you essentially admitting that you don’t have the resources in-house to work on or deal with it?

I just simplified that, yes. But it does seem like a lot of senior people will hair-trigger to get a consultant aside from looking at their ranks and seeing if there are people capable of doing more up and down the line (there often are, as good ideas can come from literally anywhere). If you’re immediately going outside the ranks instead of thinking about solutions from inside the ranks, isn’t that essentially akin to saying you don’t really respect your employees?

Again, a simplification, to be sure. I’d hope (pray?) that the decision to bring in a consultant (or consultants) is often very nuanced and well-though-out. In reality, I doubt that’s the case. I bet people mostly evaluate how much it will cost and that’s it. Again, it varies situation-to-situation.

If you want to build trust within your organization, you need to do some fairly basic things — for example, have leaders walk around and simply talk to people. View “management” as more about coaching. Stuff like that.

Think of the message it sends a smart rank-and-file with good ideas:

  • He/she works in the company.
  • He’s/she’s probably floated a few ideas up the chain and nada.
  • He/she doesn’t have access to the top people.
  • Now someone from outside the company is going to come in.
  • That outside person is going to seem all buddy-buddy with the top people.
  • (Top people need to glad-hand the consultant; they’re paying him/her out the ass.)

Taken all together, does the above series of bullet points seem like a good way to build up “employee engagement” or retain your highest performers? The conventional answer back is probably, “Well, we give our high potentials more money;” good answer, except it doesn’t reflect how people think about motivation, broadly.

We often claim that we’re coming up on a generation where “transparency” and “relationships” will be normative, right? But then go look at a b-school career fair. Everyone’s going to be rushing to the Bain and McKinsey tables, no? So how can we say a culture of transparency is emergent when the best jobs still involve skewering that direct idea?

Any ideas on this, either leave ’em in the comments or use the form to get at me directly.

Ted Bauer