Article by Kevin, Management Consulted, Advice from a former consultant on recruiting, resumes, interviews and cases
Consultants can have a negative reputation – charging $2 million for 12 week’s work that results in stacks of PowerPoint slides, all of which are archived into a dusty closet digital or otherwise soon after McKBain Group leaves the premises.
When consultants’ recommendations are implemented, employees often argue that the actions are not beneficial and don’t reflect day-to-day business realities.
That’s one side of the story.
Below, let’s look at a more positive view on the 6 reasons why companies hire consultants. Through it, you’ll have a better view on business consulting and the consulting industry.
1 Staff augmentation
The least impactful role that consultants can play and self-explanatory. Companies often have short to medium-term staffing needs in the case of government work, this can extend for several years due to a variety of factors eg, recent downsizings, sudden expansion. Consultants in this situation “plug a hole” for the company by filling the role of full-time employees. While expensive, it’s common work for operational consultancies eg, Deloitte and Accenture and, to a lesser extent, for government consultancies eg, Booz Allen
2 External change force aka “political cover”
It can be hard for companies to do what’s right sacred cows and all that jazz – particularly when it comes to job layoffs, salary and benefit changes/reduction, major operational and strategic shifts. Hiring consultants can be a way to reach the desired conclusions with sufficient political cover in case certain parties are unhappy eg, a displeased Board or disgruntled employees or things go wrong ”Despite the significant cost uptick, we implemented BCG’s recommendations to the letter – I’m not sure what we could have done better”
3 Best practices
Across industries and functions eg, organization, supply chain – consultants have the rare privilege of:
- Serving multiple clients in the same sector eg, Waste Management, Taking a company public
- Serving multiple clients facing similar problems across different sectors eg, Capital Acquisition, Product Development
This enables them to recognize common attributes of effective solutions, applying lessons learned in applicable situations. This knowledge is partially institutionalized at each consulting firm in the form of white papers, databases, post-project reviews, etc; however, much of the information exists in the collective heads of partners and to a lesser extent, senior consultants.
A former McKinsey partner put it best when he called business consultants “masters at reinventing the wheel”
4 Analytical horsepower
A corollary to staff augmentation, companies may need help solving issues and executing strategies where their skillsets and knowledge are insufficient. Consultants can be of great value given their training and capabilities. A note here on big vs boutique: big consultancies have a breadth of resources that they can bring to bear on problems eg, data mining and analytics, primary market research. Boutiques may have specialized expertise on specific dimensions eg, retail pricing best practices, financial industry benchmarks.
5 Fresh perspective
Companies often need a fresh set of eyes – you’d be amazed at the amount of value consultants can add based on the most mundane observations and insights. Critics contend that this is an example of consultants selling “glorified common sense”, but for front-line client employees, it can be easy to fall into daily routines without a critical eye towards measurement, analysis, and improvement.
6 Training and skillset augmentation
There’s good argument that every consulting project – particularly ones with heavy client interaction – incorporates client training as a major ingredient. The best recommendations are worthless if clients can’t implement and maintain suggested changes. Thus, a large part of what consultants do is educate client employees on necessary knowledge, skills, and mindsets.
via Why Companies Hire Consultants | What Management Consultants Do.
