Understanding and using consulting as a competitive advantage
Recent studies on the growth of occupations show that one of the fastest growing careers is consulting. This is a reflection of the changing nature of our economy. We used to hear about how we were moving from an industrial economy where the typical worker is a laborer to a service economy where the typical worker is a clerk. Now it is pretty clear that we have moved solidly into an information economy. In 1988 Peter Drucker suggested that this was happening and that the typical worker in an information economy is a knowledge worker. Recently Richard Florida re-cast this definition somewhat and coined the term creative worker. The important point is that first world economies are being driven by the rapid flow of information and the tool of choice to manage these elements is technology.
Understanding the exponential explosion of knowledge in recent decades it is easy to see why consulting has grown proportionally. Simply put the corpus of current knowledge in every field is so vast that even a large company cannot hire enough people to “know everything.” Therefore most productive organizations decide what their core business is and staff to maximize the knowledge base of their core functions. Then they engage consultants for their expertise as needed. This trend has resulted in outsourcing, hiring outside companies to carry out functions that are not part of the core business. Perhaps the best-known area where this happens is in IT. Companies such as IBM have completely re-designed their business model to compete in this market.
Today the leaders of even small companies need to understand how they can leverage the mostly tacit knowledge of consultants to improve their productivity. Understanding the nature of consulting can help you use this resource.
Consulting might be thought of as coming in two flavors: task and process. Actually consultants operate everywhere along this dimension. Most consulting is a mixture of task and process. Consider IT as an example, IT consultants not only can assist you with what software and hardware you need but can help you discover how to derive maximum advantage from the systems as well as train your people in the effective use of these systems. In many respects consulting reflects the increased emphasis being placed on the how as well as the what of business functions.
The types of consulting that can produce the greatest productivity gains are those focused on the development of a company’s people, particularly managers and leaders, and the organizational matrix they function within. Most of us who have managed in or consulted to organizations appreciate how difficult behavior change can be to accomplish. A distinguished psychologist wrote “habits are cobwebs that grow into cables.” We are all creatures of habit who prefer to live in environments that we control and that are predictable. In order for organizations to change and become more productive people must change their behavior and this is a challenge even for the very motivated. Perhaps the most salient example of human inertia is how little behavior change results from traditional training programs requiring interpersonal skills change such as sales, management, customer service or leadership.
Today, particularly in America, we are seeing the rapid development of consulting organizations that are focused on helping organizational leaders get greater productivity from their people. Understanding the consulting process and how to work effectively with a consultant can be a competitive advantage for organizations of any size.
The most critical step in developing a relationship with a consultant is engaging one who works well with you. The starting point is to tap into your professional network and ask colleagues you trust. Many consultants get most of their work through referrals of satisfied clients. Set up a meeting with this person and develop an understanding of their services, keeping in mind the task – process dimension, as well as your comfort level with this person. Remember, you are letting this person inside your organization and trust is a key element of the process. Get off to a good start by explicitly defining who the client is, the level of confidentiality, sharing expectations and developing a work-plan that includes what, when, who and how much.
For consultant and client a productive working relationship can be remarkable. At the most basic level it yields an ongoing conversation about the organization, its people and reflections on management and leadership. This is a dialogue that both parties can actively participate in, learn from and use to improve performance.