The Effective Use of Consultants

The Effective Use of Consultants

If managers do something new or something that requires specialist capabilities, using a consultant might be invaluable to help them identify ‘what they didn't know they didn't know’.10

However, the inappropriate use of consultants can sometimes be a contributing factor when things go wrong.11 Here are examples of problems some have encountered:

• There is a contentious issue, so a manager proposes to engage a consultant to look at the problem. Work is done, and a report is issued, but the scope and results arising have been influenced by the manager commissioning and paying for the work. Indeed, some managers speak of consulting assignments being weaponised. As a result, specific issues may not come to light early enough for appropriate action.
• To move a business in a new direction, an organisation might need consulting support, but it may take existing staff well out of their comfort zone. Andrew Wright explains:

‘I firmly believe that there are situations where you need to engage a consultant. For example, if you want insights into a new market or want to know whether you have the best cyber security arrangements, it's hard to have the latest knowledge and expertise in‐house.

In other situations, if someone wants to engage a consultant for a strategic priority, you need to (i) get real validation who knows what in the consulting firm, so the right people are working for you, and (ii) think about the state of your internal capability. After all, if no one in your organisation has a good understanding of a new topic, how are you going to be able to judge what the consultant is telling you?

Consultants will inevitably be interested in continuing to work for you as long as possible, so you must be conscious of building your capability quickly and avoiding a culture of dependency.’

This theme is also touched upon in the book ‘The Blunders of Our Governments’, by Anthony King & Ivor Crewe 12: ‘You do not need to be a leftist conspiracy theorist to see that consultants tend to come up with schemes that require more consultants, and which err on the side of complexity’.

• There will be some situations where the use of a consultant must be weighed up very carefully because of potential dilemmas. Andrew Wright explains:

‘I have had board‐level conversations where we have asked ourselves: If we give this consultant this experience working with us, what are they going to do with it? I'm sure most of the time, confidentiality arrangements work. Still, suppose an industry‐level challenge arises, and a consultant helps you work through a solution. In that case, they will have this story in their kit bag when talking to other clients facing similar issues.

The dilemma is that, on the one hand, there are many benefits to treating consultants as part of the team. But on the other hand, you need to recognise they are working for a separate, external organisation and will therefore have motives that are not identical to those of your organisation.’

Consultants are one source of third‐party risk.13 External expertise can be essential, but organisations still need to assess and manage the risks of contracting with others.14 Third parties will have other clients, some of whom may be significantly more important than your organisation. So, even though they may risk letting you down, they are often bound to favour (i) their most significant clients and (ii) the clients that monitor their work most closely. In many ways, organisations get the third‐party service that they expect and pay for.15

Organisations also need plans for external uncertainty and protection against its worst consequences.

A finding about ‘understanding and accommodating external factors’ should prompt further investigation into possible organisational causes:

• Poor supplier management policies and monitoring – perhaps due to contract design limitations or unclear roles of who should monitor what (especially during a period of change).
• Weaknesses in third‐party due diligence – perhaps due to resource constraints.
• Projects and programmes are let down by third parties or external factors – perhaps due to weaknesses in the target setting process that did not sufficiently consider these uncertainties (e.g. when appropriately skilled consultants would be available to start work).