As a CEO I struggled long and hard over any decision to use a consultant. There are many issues that need to be managed by the client to keep a consultant from going overboard on time and costs.
Too many need too long to get up to speed on your business (on your dime), cost too much and can not provide tangible results on a limited project basis. Too many are unproductive and do things in ten hours that I know I could have done in 2-3 hours as paying by the hour is often a de-motivator while paying by the task aligns the client's and consultant's interests more.
All that said, I currently make my living as a consultant and do believe there is a better way.
The old saying that a consultant is someone who you pay to learn your business who then goes down the street to sell that expertise to someone else next week can be true if you let it happen that way. But it does not have to be that way if you use consultants appropriately and as a collaborator.
It is also important to understand that a consultant's value added is often what the client does not understand. For whatever reason you may be too close, too entrenched in the industry or not see it due to very different experience.
here is not a truer saying and understanding this is critical. What this means is that if you could understand the problem fully and/or describe the solution you would not really need the consultant at all and would probably even have all the experience and skills to solve the problem also. Therefore, it is critical that you have flexibility in the definition of the problem and the solution, as the consultant will be most effective then. Part of the consultants job should always be helping to define the problem and solution (Phase I), not just solving one you as the client defines.
One reason we need consultants is that their outside perspective can calibrate us to many outside changes that may not have been adjusted to as they happened due to corporate inertia and "tradition". A good consultant can quickly find problems you did not know existed and suggest solutions, however, they can sometimes not implement the entire solution due to lack of authority and resistance from staff who will be affected. The best consultants will understand this an define what you and others might need to do to solve the problem.
Types of Consultants:
1. Content or specific knowledge in a particular field (i.e. marketing in a particular industry), scientists, programmers with certain language skills.
2. Expertise - Knowledge that transcends any one industry and is applicable in many areas. (i.e. management and strategy consultants)
3. Knowledge - This is experience, as in "been there, done that" exactly as an operational participant (not as a consultant). This is the type of consulting the C-Level provides and means doing what you have done before many times.
4. Behavioral - People who specialize in facilitation and third party intervention or training. (i.e. focus groups, image consultants)
5. Rolodex - People who facilitate meeting other people. Generally a slimy way to make a living in my view, as the value added is debatable, and selling access to other people is a dubious way to make a living. However, sometimes a necessary evil for a short period of time.
TOP TEN TIPS ON USING CONSULTANTS WISELY:
Every company needs consultants sometimes, most need consultants fairly regularly, but use them sparingly for well define projects and expertise you do not have in-house.
A Project Process:
Bob Norton is the author of four books on growing companies and CEO of C-Level Enterprises, Inc. which helps companies grow more rapidly with products, training and consulting.