Why do companies spend over $12.5 billion a year on consulting? The Accidental Scientist Pardon me if I digress from the typical editorial fare and delve into a subject near and dear to my heart. Despite the economic downturn, business at my company is as robust as ever, probably in heavier growth than even in the heady days of what we are already calling the “longest economic expansion in history.” Why are consultants so highly sought after? Certainly it is not for the depth of specific knowledge that industry executives seek to draw talent from a single group. I pondered this irony over the holidays and began to assemble some thoughts through the experiences that I encountered then.
Stargazing I bought a telescope as a present for my son this holiday season. It was one of those absolutely entertaining Meade remote-control, reflector base-station scopes advertised this year, the type that would have made Johannes Kepler envious, had his neighbor had one. I bought it from Amazon.com and it was delivered in plenty of time and in perfect condition. I had it pre-wrapped, and directed that Amazon place a special message for my son on the delivery card. “Do not open until your Dad wakes up at 8:30 am. Sincerely, Santa.” I comforted myself that night by thinking, “Really, how much trouble can a kid get into with a telescope?” This allowed me to sleep for at least two hours on Christmas morning. I awoke to the morning broadcast news that, yes indeed, you can make a cool fire by pointing a telescope directly at the sun while placing some dead leaves under the other end. So much for Santa’s sleep. The wood deck behind the house is going to be fine now.
As a preparatory effort to indulging in amateur astronomy, I got in touch with a couple of long-time friends who happen to be professionally involved in cosmology and astronomy. I inquired of Lloyd and Andy as to exactly what are the best resources available for the amateur astronomer to track which shiny things to look at in the night sky. They gave me several ideas, including a fabulous version of software that allows you to have a planetarium inside your own computer. (My wife says that I bought the software and the telescope for myself.) In the course of talking with Lloyd and Andy about planet orbits, they directed me to some material on a new subject called cyclostratigraphy. This hard-to-pronounce subject is the study of layers of earth’s soil in order to track cycles in the earth’s ancient orbit history.
Now I don’t intend for this column to become a science lesson, so here comes the punch very shortly. Tell the receptionist to take a message on the current call, get a cup of coffee, and keep reading. Lloyd and Andy passed some numbers to me that described the orbit of earth around the sun, numbers that had come from this new science, cyclostra-whatever-it-was. I asked what the numbers meant, and inquired what actually caused each statistic. They replied that six of the numbers had a cause that was understood by science, and that four of the numbers had no known scientific cause. I took a look at the four numbers of unknown origin. All four of the numbers of unknown origin were divisible by a largest common denominator of 3,600 years. I didn’t think that it was that big a deal, but when I told Lloyd about my observation you would have thought that I had just told him that I shot his cat. He was silent for about a minute. He later wrote Andy, and a whole firestorm ensued. Now, I am the, ahem, “brilliant progenitor” of the 3,600-year theory of cyclo-whatever correlation on earth’s orbital statistics. I receive e-mails from people I have never heard of, university professors and the like, and from all over asking me to expound on the subject. I don’t know what to do with them; I just delete ‘em most of the time.
Bright ideas Why do companies hire consultants? Is it because they want to tap the expertise of persons who have been in their line of business for many years, to garner some of the experience of their battle scars? Perhaps. This is one legitimate usage of a consultant.
But the hiring statistics of consulting firms belie this notion for the most part. Consultants tend to be young, well-schooled, moderately trained, and ready to go.
Does the deployment of the experienced warrior or the energetic talented youth prove to be a consistent winning formula in a consultancy? Consulting engagements are initiated for several reasons, some of which we will review here shortly. Consulting projects do not always turn out to be successful, however.
Lieutenant General Billy Mitchell returned from Europe at the end of World War I and approached the Department of the Navy with a great revelation he had had during his transit back from overseas. You might say that it was an epiphany that drove him to approach the Navy with his incredible idea.
Billy Mitchell’s idea was that the Navy could take a retiring battleship, say the Alabama or even bigger, and weld a large steel deck completely over the top of her, to be used for landing and launching planes. Billy even determined a name for the vessel, “Aircraft Launch and Retrieval Ship.” This was to be the wave of the future of warfare, by his every account that day in 1917. Billy rolled up his drawings, smiled, and left the room.
In 1917, that very same day, the Department of the Navy patted Billy Mitchell on the back and replied “Billy, we’ll run the Navy, you run the Army.” Lieutenant General Billy Mitchell, despite being a great military leader, was not that successful as a consultant to the Navy. I wonder what would have happened if the Navy had actually built that aircraft launch and retrieval ship?
Banish groupthink Why do companies spend in excess of $12.5 billion in consulting fees each year? I would like to review some of the reasons that order fulfillment operations have chosen to hire my firm, DCB and Company, over the last two decades and in doing so shed some light on this phenomenon.
1. Ideas and inspiration are the energy that drives business operations forward. Many times it is difficult for a manager to focus on the detail of everyday operations, yet still be the champion of new thought. Consultants, although not versed in all the specific ramifications of a new approach, are certainly a great tool to elicit ideas on how to approach new requirements.
2. Companies need talent, need it now, and need it only for a certain period of time. Consultants offer the opportunity to bring on talent that is targeted at attacking a particular problem, but does not entail the baggage of hiring an entire team of full-time staff to perform the same goals.
3. Consultants offer a sounding board against which a manager can evaluate ideas and receive relative feedback on similar endeavors throughout his or her home industry.
4. Finally – and most hopefully – consultants bring to their clients a high degree of desire to solve the problem. Coupled with this desire is the naive assumption that the problem can be solved. There is no greater burden than a staff that does not believe that they can operate in certain fashions or achieve certain goals. Consultants circumvent this type of groupthink and seek an answer unfettered by cultural assumptions.
The Bible says that steel sharpens steel, but even so it is difficult for a sword to sharpen itself. At your next executive planning meeting, take a look at the possibility of hiring a consultant to tackle a specific and challenging problem.