Stop Consultants Running Amok
September 10, 2005
Case categories include: Human Resources Leadership
By Robert Sher
Some of the most highly trained and powerful people we as CEOs bring in are consultants, also known as lawyers, CPAs, mentors and more. Many times they know more than us in their area of expertise. Sometimes their credentials are amazing. Sometimes they do incredible things for us, and are worth every penny we pay them. I could go on for hours about incidents where consultants saved my neck.
But sometimes they run amok.
Pamela Kan, President of Bishop Wisecarver, had a consultant save her neck. During a transition of power between generations at this family-owned business, she needed an outsider to objectively conduct a situation analysis. Other long-term parties within the company had their own plans, and were spinning their own version of reality. Most CEOs aren’t experts at such transitions.
Mission accomplished. The situation analysis was done well, and parties were persuaded. Pamela took control as CEO. Grateful to this consultant and mentor, and seeing his wealth of knowledge, she granted him a three-year consulting deal. Oops. But problems weren’t apparent right away. The mentor was a positive influence, and Pamela learned much.
She says, “After about a year, I started to feel as though I had ‘grasped the pebble.’” For six more months, she pondered her options. The mentor was increasing involved in operations, which was not his strong suit. The rest of her team was growing unhappy. The mentor began to claim that he was irreplaceable. Yes, this is always a bad sign.
She consulted her CEO peer group, the Alliance of Chief Executives. They recommended that she quickly find a way to send the mentor packing. She brought in another consultant to do a situation analysis. He sorted out the facts and presented them. The mentor, indignant and offended, issued the “it’s him or me” ultimatum. Pamela obliged, and sent the mentor on his way 18 months after he began. The contract was settled later.
Power is good and bad
When I hire consultants, I look for powerful, strong people that can deliver big value to my company. I really don’t want meek, timid people that say “yes.” Oh, and I want people that are smarter than me and that know more than I do about the task at hand. I want them to aggressively do their job. That’s where powerful is good.
But so long as it is my business, I am the captain. I stay at the helm. I insure that no-one runs amok, especially powerful people, who when they run amok, tend to do it on a grand scale. Pamela was right when she brought the mentor in. He had a job to do, and he did it. Pamela benefited greatly. That’s perfect. But in granting a three-year deal, she eroded her ability to stay in control. Yet she stayed alert, detected the problem, and found a way to resolve it.
Your lawyer is a consultant too, and the same rules must apply. Businesspeople are notorious for ceding control of litigation to their lawyer. This is always a mistake. A good lawyer advises his client of the risk, costs and rewards for each course of action, and makes recommendations. But the decision about the course to take should always be the client’s. Every CEO I know is fully capable of understanding litigation decisions if their lawyer is willing to explain it.
It’s natural for consultants to want to “hang on.” You are their revenue source. Most genuinely want to provide value, but sometimes they search just a bit too hard to find hours to bill for. A good CEO is always skeptical of any salesperson, and a consultant is always, in part, a salesperson. Like any buyer, it’s incumbent upon CEOs to determine what he or she needs to buy, to find the best supplier, and then to complete the transaction.
Yes, the completion part is where you thank the consultant for a job well done, and re-assure him or her that you will call them as soon as the need for their services arises again. Yes again, you must do this even if you like the consultant, and even if they’ve saved your neck in the past.
Hire strong consultants. Use them to achieve your objective. Then send them home.
• Hire powerful, smart consultants.
• Always stay in control of the relationship.
• Send consultants home when their job is done.
Robert Sher is principal of CEO to CEO, specializing in assisting CEOs and business leaders as they navigate critical passages. He is the author of The Feel of the Deal; How I Built a Business through Acquisitions. He may be reached at Robert@ceotoceo.biz.
Company and Case Facts:
Company: Bishop Wisecarver, Inc.
Person: Pamela Kan, CEO
Alliance Member since: 2005
Business Founded: 1950
Annual Sales Volume: $15.8 million
Growth Rate: 11%
Head Count: 52
Product: Linear motion components and systems
Typical Customer: OEM equipment manufacturers in many industries
Written: September, 2005
Address: Bishop-Wisecarver Corporation, 2104 Martin Way, Pittsburg, CA 94565
Web Site: www.bwc.com