Today’s guest post is from Robert A. Rudzki, a former Fortune 500 senior executive of supply management who now advises other companies as President of Greybeard Advisors LLC, a strategic management advisory firm. Bob has authored several business books including Beat the Odds: Avoid Corporate Death and Build a Resilient Enterprise and Straight to the Bottom Line. Bob also writes the Transformation Leadership blog for the Supply Chain Management Review. (e-mail Bob at
rudzki <at> greybeardadvisors <dot> com.)
Chapter 22 of the book Straight to the Bottom Line has an intriguing title: “Consultants: To Use or Not to Use — That is the Question“.
When my co-authors and I wrote the book a few years ago, we were speaking as corporate practitioners, having led successful procurement transformations in a variety of industries.
Today, I’d like to build on that corporate perspective (in my case almost 30 years at Fortune 500 companies), to share some additional observations that emerge from my experiences working with clients as their advisor.
First of all, let me say that I reread Chapter 22 before writing this post, and found its advice sound and very timely. If you haven’t read the book, or the chapter on consultants, you really ought to.
In fact, a table that appears in the chapter is worth repeating here:
|Unnecessary to Use Consultants||Consider Using Consultants|
|Benchmarks confirm that your internal processes/results are best-in-class||You lack benchmarks and are uncertain how good your processes and staff are|
|Company is able to make ongoing investments (people, systems) to achieve and remain best-in-class||Not able to invest as needed|
|Best-in-Class Category/Market Expertise||No particular internal strength|
|No urgency to achieving significant cost reductions||Time is of the essence for achieving improvements|
|Best-in-class already, and still reaping new benefits each year||Not generating significant new benefits each year|
|Internal staff able to effectively deal with internal politics||Internal politics constrain achievement of cost reduction objectives; a “third party” might have credibility|
|Your organization lacks a leader, and you hope that the consulting firm can fill that gap||You want to supplement your internal talent for a defined time period|
Source: Straight to the Bottom LineNote: Straight to the Bottom Line is a registered trademark of Greybeard Advisors
Since Greybeard Advisors was formed five years ago, my colleagues and I have had the pleasure of working with large and medium size companies in most industry segments (including manufacturing, process, health care, services, retail). We’ve seen some excellent practices relating to using consultants (or advisors) intelligently.
We’ve also seen some poor practices that are all-too-common. In one case, we were invited in to do a “post mortem” on a consulting project by a large firm, and saw examples of fundamental errors by both the client and the consulting firm.
As I reflect on what I have seen and heard, some of the key learnings can be boiled down to the following chart. Take a minute or two to carefully review it. You should notice that using consultants intelligently requires mindset and behavior changes by both the client company as well as the consulting firm.
|What Typically Happens||Leading Edge Practice|
|Top-down directive that the procurement department will work with a specific consulting firm||Procurement leader takes the initiative and sends an RFI to a broad range of potential service providers (large and small firms; consulting vs. advisory firms); short list invited to respond to an RFP|
|Selection criteria unknown, beyond assumed personal relationships at the executive level||Selection criteria established as part of the RFP process, and are consistent with the needs/desires of the procurement organization and the company|
|Consulting firm uses “A” team to manage the executive relationship, but sends the “B” team of inexperienced junior consultants to learn on the job and “do the project”||Firm is selected only after ironclad assurances that the “A” team of experienced advisors will be assigned; resumes of advisors are provided; and the client is encouraged to interview each advisor.|
|Consulting agreement is rigid and aggressive, requiring a hard commitment to a large number of full-time consultants for a defined timeframe (often 6 to 12 months, or more).||Agreement is flexible, reflecting the client’s workplace realities, needs and timing|
|Consulting firm disrupts everyone’s “regular job” in bid to ensure that its project is everyone’s priority and is a success||Firm works with the reality of client’s workplace and schedule, and is careful not to be a disruptive force|
|After consulting firm leaves, reported “savings” start to evaporate or can’t be found||Firm has embedded processes and capabilities into the client organization, which now can create more successes on its own|
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One of the fundamental choices you need to consider is whether you want to employ a “consultant” or an “advisor”. The distinction is not just semantics, it is core to what you are trying to achieve.
Do you want a hired gun to knock out some work and then depart? Or do you want an advisory approach in which process knowledge (e.g. specific best practices such as strategic sourcing and negotiations management) and commodity knowledge are transferred to your team?
To use a familiar analogy: Do you want someone to hand your team a fish dinner, or do you want your team to learn how to be successful fishermen themselves while they catch their first few fish?