Why management consultants get a bad rap

“Competition keeps SaaS profits artificially low.”

Authors don’t write their own headlines, so don’t blame Kevin Kwang. Someone at ZDNet stuck this in front of his perfectly reasonable analysis of why so many SaaS vendors aren’t profitable.

Memo to headline-person: You have it backward. Lack of competition keeps profits artificially high. Markets are supposed to have it; thin margins are supposed to result.

In fact, if Kwang is to be believed, the SaaS marketplace exemplifies all that’s good and right about capitalism: Instead of harvesting profits, SaaS vendors are plowing them back into their services to make them more attractive, so as to gain marketshare, so as to either: (1) survive the inevitable marketplace consolidation; or (2) be acquired by a larger, more diversified player, to become part of their product portfolio, to survive the inevitable marketplace consolidation.

We management consultants understand these things.

We management consultants understand many things. Including, it appears, things we don’t understand at all.

My friend Jeevan Sivasubramaniam, executive managing editor at Berrett-Koehler, sent me a reproachful little book titled I’m Sorry I Broke Your Company: When Management Consultants Are the Problem, Not the Solution (Karen Phelan, 2013). It reinforces the old joke that the 90 percent who are bad ruin it for the rest of us.

Which is too bad. Not that the old joke is wrong. It’s that when management consulting engagements go wrong, it’s usually because of an unspoken conspiracy between the consultants and the person who brought them in — a point the book makes well, but that’s likely to get lost by skimmers who read nothing but the title and a few chapter heads.

So here, in my own disorganized way, are three random thoughts on the subject. Ms. Phelan and I mostly agree on them; they are, in any event, my own:

Don’t bring in a consultant to read a script. I’ve had this sort of engagement, not that I knew it when the client asked us in. If you know the right answer, but need an outside voice to explain it to your boss, the board of directors, the IT steering committee or what-have-you, you have a bigger problem than the need for an outside voice to explain it.

You have a credibility problem, and no outside consultant will fix that. My advice: Hire an actor to read the script for you. Actors come a lot cheaper than management consultants and reading scripts convincingly is their job.

Then hire a leadership coach to help you figure out how to fix your credibility problem.

Don’t bring in a consultant who promises measurable improvements. A subtlety here: Measurable improvements are fine. That isn’t the problem.

The problem happens when the management consultant tells you which measure or measures will improve. “We’ll cut waste,” is terrific, so long as you brought in a consultant to cut waste. If what you need is to improve your ability to deliver customized results, though, it isn’t so terrific, especially as many of the “improvements” consultants make to cut waste eliminate the ability to deliver customized results.

Even that isn’t the worst that can happen. I’ve seen process consultants “improve” a process by “discovering the pain points,” making changes and then discovering which measures improved. Whichever ones they were, they’ve delivered on their promise, never mind that other measures their client cared about more got worse.

Measurable improvements? They’re just fine. But deciding what “improve” means is your job. So is insisting you be informed of the trade-offs … of which measures will get worse as part of the process … in advance.

Bringing in a consultant isn’t a sign of weakness: As a manager at any level, you aren’t supposed to be an expert in everything. Sometimes, what the organization needs isn’t where you have your expertise.

For example: Many managers are excellent at operations … at getting the work out the door every day, making quotas, maintaining quality, keeping employees motivated and so on. Many of these managers aren’t all that good at making change happen, because (1) that isn’t their day-to-day job, and (2) making change happen in an organization is complicated.

When what the organization needs isn’t something you’re all that good at, asking for help is a sign of strength.

And oh, by the way: Sometimes, the hardest part is recognizing a need that’s very important but is also outside your repertoire. That just might be the best reason to bring in a consultant — to help you when the problem is that you don’t know what you don’t know.