Thursday, August 21, 2008

Analogy #201: Cockroach Infestation!

Cockroaches are pesky pests. They are almost indestructible. Scientists believe they have survived over 300 million years of calamities.

Once a home gets infested with cockroaches, they are extremely difficult to get rid of. They just keep on breeding, making the situation worse. In some urban areas, about half of the children who see a doctor for ear problems have a cockroach in their ears. The rise in asthma among children in urban areas is attributed to breathing in too many cockroach body parts and feces.

One time, I started working at a company and was introduced to the team of consultants who had been working with the company for a number of years. When I shook their hands, I said, “So you are the cockroaches.” I think my straightforwardness surprised them a bit.

I’m no longer associated with that company, but I understand that this large consulting firm still is. Like I said earlier, once infested, it’s hard to get rid of cockroaches.

There are parallels between cockroaches and consultants. Both are hard to get rid of once they find a way in.

However, given today’s environment, most companies do not keep a large in-house strategic planning function. Instead, they like to get assistance from one of those large consulting firms (like McKinsey, Booz, Bain, Accenture, A.T. Kearney, Bearing Point, Monitor, Boston Consulting, Strategos, Capgemini, etc.). So the consultants are let in the door.

I’ve worked with nearly all of these large consulting firms at one time or another. And yes, they have some very intelligent people who can be useful to the strategic success of your firm. But, remember, they can also be like cockroaches—persistent pests who drain your checkbook.

The principle here is that consultants need to be managed well in order to achieve the benefits and avoid the infestation. Listed below are see key rules to keep in mind to manage them properly.

Rule #1: Remember that Their Goals Are Different From Yours
Your goal is to quickly and efficiently develop and implement a successful corporate strategy. The consultant’s goal is get as many billings and fees from you as they possibly can. These two goals are not always compatible. Remember: Once they “fix” the problem, the gig is over. “Quick and efficient” is not always in their best interest.

I had a friend who was hired out of business school to work for one of these consulting companies. He said the first thing they did was send him to consulting classes. When I asked what they taught, he said it had nothing to do with teaching him something useful for the client. They were classes in how to get as many billings and fees from the client as possible.

Rule #2: Manage the Menu
When it comes to conflicting goals, you want it to be your goals which win. The way to do that is by spending an inordinate amount of time on the “Menu”—the contract for services.

Consultants will want to do two things to the interpretation of that contract:

a) Increase the Scope of the Overall Problem (The bigger the problem, the bigger the fee for solving it)
b) Decrease the Scope of the Current Contract (Make the acceptable deliverables as small as possible)

By doing these two things, they guarantee that meager output of the current contract cannot possibly fix the newly redefined larger problem, so you have to sign them up for a lot more contracts (each with its own large fee) in order to get the job done.

To avoid this, you have to actively manage the wording of the contract up front and hold them to it (or dock their pay). First, clearly define exactly what the problem is that they have been hired to solve (for this contractual engagement). Second, clearly define what the acceptable deliverables are (what they specifically have to do in order to get fully paid). Third, hold them to the contract.

Rule #3: Date Before You Marry
Once you realize that these folks want to partner up with you and be around forever, you realize that this is less like a one-night stand and more like a marriage. Long-term compatibility can become an issue. Different consulting groups have different philosophies and operating personalities. Find the firm whose personality is most compatible with your company.

Choose them as you would a marriage partner. Go on some dates and get to understand how compatible you are. Or, to switch metaphors, as long as you are going to be infested, find the cockroaches that are the least objectionable.

Rule #4: Ask for Farms, Not Food
There’s an old saying that if someone gives you a fish, you eat for a day. But if they teach you to fish, you can feed yourself forever. Consultants tend to want to keep giving you fish—today’s answer for today’s problem—forever (with a fee on each delivery). You’re better off having them teach you how to fish so that you are no longer dependent on them.

As part of the contract, make sure that the consultant’s knowledge is transferred to you and that they teach you how to deal with this type of problem on your own in the future. Getting the whole farm (and the knowledge to farm it) is a lot more valuable than just one batch of crops.

Rule #5: Get the “A” Team
In reality, you are not hiring the entire consulting company. You are hiring the people they are sending to work on the project. Like all companies, they have some great people (the “A” team) and some lesser people (the “B” team). Make sure you get the “A” team.

Sometimes you see the “A” team up-front (when they pitch you for the business) and at the end (for the final presentation of results), but nowhere in the middle. Make sure you find out who is doing the work and guarantee you get the people you want for the stated amount of time.

Rule #6: Give Them Your Watch
There’s another old saying that the role of a consultant is to steal your watch and then tell you the time. In other words, they get paid to tell you the knowledge you already had in your possession.

I was talking to another consultant about this and he admitted that they brought very little new knowledge to the project and that we basically already knew what to do. However, he claimed that most internal bureaucracies are resistant to change. Without the catalyst of an outside consultant, it is tough to create that change. Too many barriers are put up.

They allow you to tell the skeptics, “Look, we hired the experts and paid them a whole lot of money, so we’d better do what they say.” This can often be more effective than saying, “Do it because I want us to do it.”

If this is true, then use it to your advantage. Tell the consultants exactly what you want to do and then use them as a catalyst to get the change you desire. Prophets are not respected in their home town, and your internal strategy people may not be as respected as out-of-town consultants. So don’t be afraid to give the consultants your watch—provided you have set the time on it to be exactly what you want.

Rule #7: Do the Work
Usually, the end result of a consulting engagement is a recommended list of things to do. If you want to benefit from the recommendation, you have to do the things on the list. It shocks me how many times a company will hire a consultant, get a list of things to do, and then not do them. They think that if you pay the consultants enough, the problem will go away. The end of the engagement is the beginning of implementation. Don’t expect magical results if you don’t do the work of implementation.

Although I could have said a lot more, I think by now you get the idea. Because consultants have a different agenda than yours, you have to carefully manage them. If you leave them alone and let them set the rules, you will usually be disappointed (and have spent more money for that privilege). However, if you set the rules, the process can be very beneficial. You’re the customer. Act like one and demand satisfaction. Otherwise it will feel like you’re dealing with cockroaches.

I know someone who was interviewing for a job at a new company. To impress him, the company showed him their relationship with their consultants. This man quickly found out that this was the same basic consulting team doing the same basic work that they did for the company where he used to work.

However, there was a big difference. At his former company, the executives managed the consultants well. Work was done in a timely fashion and implemented as recommended. The company received many benefits. By contrast, this new business managed the same consultant poorly. The process was taking forever, it cost a whole lot more for the same work, and nobody implemented anything, so they got no benefit.

After seeing this, my friend did not pursue the job opportunity with as much gusto.
So next time, when you are dissatisfied with a consulting engagement, don’t just rush to put all the blame on the consultant. Perhaps you didn’t manage them as well as you could have.

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