Last year I had a coffee with a person I admire and respect hugely. In the course of our conversation he said "consulting is a terrible business model".
Given that he was at that time the head of a very successful consulting practice and has enormous experience in the field, I was slightly surprised that he said that, but I found it hard to disagree with him.

What businesses don’t like about consultants
Business leaders are justifiably sceptical about using consultants. When I worked for Fisher & Paykel, the rule was basically “no consultants allowed”. The principle was if we need a particular skill we should hire someone to do it. If we can’t justify that, we don’t really need it.
The classic joke about consultants is they borrow your watch, tell you the time and then keep your watch. Of course the consultant always argues that they bring a unique combination of skills and experience, and therefore their fee is worth it.
Why traditional consulting can be terrible
The number one problem with consulting as a business model is that the incentives are wrong. Once a consultant (whether an individual or a company) gets a gig with a new client they are generally paid an hourly rate or maybe a daily rate. That incentivises the consultant to maximise the time they put in and find additional work they can do. The problem is that the client probably cares more about whether they are getting the outcome that they engaged the consultant for in the first place. For most consulting assignments time spent does not equal outcome achieved.
Traditional consulting approaches this problem by attempting to get the scope really clear, and where it’s possible for the client to reach that clarity, this works well. Unfortunately in the fast moving agile world that we now all live in, it’s not often that the client can be that specific on scope. This leads to endless change requests which gradually inflate the cost, often to the point where the client starts to worry about whether the cost can be justified in business value terms or in the worst case is forced to throw good money after bad.
Another problem is that often consultants will deliver what they think the client wants - not necessarily what is needed. They align themselves with the client's thinking rather than aligning the client to the right thinking.
Doing it differently
Trust is the key factor underpinning any knowledge work. If the client doesn’t completely trust the skills of the consultant, it will never end well. Trust is earned, not given. Big consulting brands are successful because the brand is trusted by the public or their sponsors. Individual consultants are trusted because they have demonstrated their skills in the past and they are typically re-hired by the same clients who know them.
Another way of building trust is to put skin in the game. At CIO Studio, our subscription-based fee structure incentivises us to get it right for you as quickly as possible.
Our engagements are “front-loaded” with the major effort of sorting out your strategy and getting things moving. We then help you ensure that results are achieved by fine-tuning and continuous improvement as you head towards your goals.
If you want to have a different conversation about your needs, book a call with us today.
Ray Delany is the Founder of CIO Studio and has been doing this for a while. Why not ask for a no-obligation discussion to help plan your change?
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