Why Consultants are a Waste of Time and/or Money ( part 1) Adrian Herschell

Adrian HenshellPlease let me clarify the heading before we get into why consultants are a waste of time and/or money. This article does not purport to claim that consultants do poor work; in fact the vast majority of consultants and consulting firms do very good work. Their analysis is thorough; their recommendations very well thought out and for the most part their fees are consistent with the work they produce.

However, the clients do not get value for their investment in consulting for a variety of reasons. Some have to do with the consultants retained and some have to do with the clients themselves!

Imagine spending somewhere between $40,000 to upwards of $120,000 and then not getting any value for that investment. You may say that it would never happen to you; however, we have seen countless number of these binders languishing on an Owner’s desk or credenza. These are very smart, engaged, active Owners who have real expertise in their niche market; yet they fail to act upon the document they invested significant resources in both time and money to get produced – and it sits there unused!

Why? Here is an Owner who is working flat out sixty to seventy hours a week trying to do all the right things. Probably has achieved some real success. Believes there are even greater opportunities to grow the business, achieve more profits, take market share and expand either into more markets or add additional products. The business may be a candidate for licensing or franchising. The owner sees the opportunities, but has stalled and feels the pain of being unable to achieve their goals on their own. They know they need help and go to great trouble to actually go out and retain a consultant or a consulting firm; they then commission the work, go through the pain of discovery, get the report and then fail to act successfully.

We will examine a number of reasons why business owners do not get full value for their investment in consulting and please let me be very clear – it is not because of poor work. For the most part the work is sound (there are various levels of expertise in every profession and that is certainly true of consulting). However, we are not positioning this as a criticism of the quality of the output. This really is about the compounded frustration an Owner feels after finally recognizing they need help, doing some due diligence in finding a consultant, setting all the parameters of the engagement – probably with lots of input from the consultant – agreeing to a fee structure, setting timelines and then making all the Human and Systems resources available for an extended period of time; while experiencing disruption to the day to day operations and then finally getting the extensive report – then as stated above it is not acted upon.

Why? Here’s the first reason:

The Consultant is an EXPERT or the Team are Experts!!

So, what is wrong with hiring experts isn’t that what you are supposed to do and more importantly by definition aren’t consultants supposed to be experts?

The answer of course is a qualified yes. Often, and even among the prestige firms the consultants are very sound in their core discipline. They may be strong accounting experts or have great insights in finance or be social media marketing gurus (the current flavour of the month!), and they will dissect your business every which way to uncover all the issues around accounting, finance, social media marketing or whatever they are great at.  They will analyse your business, they benchmark best practices and then develop any number of options for you. They will even make their preferred recommendations. Isn’t this what you wanted and paid for?

Yes and no.

There are a few flaws in hiring the experts to the problem you think you have; the main one is you have self-diagnosed your problem. Well, you might say “I own the business and know it intimately, built it up from scratch; who better to determine the real issues?” This is very much like deciding you have a very specific medical condition completely on your own (or with friends and family) then seeking out the medical specialist to operate on that problem! You of course would never do that; you may have suspicions about what might be wrong with your body but you would certainly get medical confirmation of what the true, accurate diagnosis is – in fact you might get several opinions from medical experts before subjecting your body to treatment!

So you would never allow your body to undergo treatment without thoroughly determining the real problem and completely understanding the treatment! Yet, you do just that with your second most important asset after your health – your business!

What is the real answer to this dilemma? You do ultimately need experts but before hiring specific expertise get a real assessment of the issues that you are facing – objectively and without skewing the direction of the issues into the sweet spot of the proposed consultants – they actually may be all wrong for what you are really facing! Specific expertise consultants can’t help with the diagnosis because they see all problems as problems in their own area of expertise – accounting problems or finance problems or marketing problems because that is all they see and do.


Adrian Herschell

Plutus Consulting Group

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