What is a consultant really? Lewis Pinault(1) first suggests, in a pedagogical manner, among a myriad of possible descriptors – including that of: “a problem solver, a strategist, a knowledgeable expert, or a ruthless defender of the bottom line, a seer, a forecaster, a guru, or a rallier and motivator, a sounding board, and a client’s best friend”. Later, in a more derogatory tone, he continues, “…or are they all efficiency drones, head counting cannibals, surface skimming masters of pretence, spies and data fabricators, threat mongers and opportunists, or experts in no industry but the promotion of their own expanded sales and well being?” Strong words indeed.
While some of the preceding could be taken as a cynical commentary on the role of an advisor, the target within the sights of this diatribe is not encompassing of all consultants – after all, the majority of advisors do follow strict codes of conduct; codes filled with descriptors of performance expectations and ethical principles. Paramount within these codes are the guidelines which fully describe the fiduciary duty of agents (i.e., advisors) to their principals (i.e., their clients); tenets which tell the advisor to act in good faith, to put their client’s interests above all else and to perform their duties with integrity, honesty and competence. Unfortunately, only the naïve among us might assume that the strict adherence to this doctrine by all advisors and consultants is continuous and unwavering. So no, the intended target of this invective is not the advisors themselves, but those considering hiring one.
The need for specialized expertise, talent or skill is perhaps the first, and most obvious, reason as to why people engage consultants, and is probably the reason that most dentists would cite as their motivation for seeking assistance (Shenson)(2). It might be that either the level of ability required is not available among the dental office personnel, or that the skills needed can be more quickly attained from an outside source than from internal training (or through additional staff hiring). A second reason that a dentist might hire a consultant is based on the need for independent, unbiased thinking and opinion. With the purchase of a ‘refreshing perspective’, a practitioner may find strong motivation in the thoughts and ideas of someone who is unfettered by, and perhaps even unaware of, what has happened in the past; or, is equally unconcerned by the personal ramifications, or other negatively perceived outfall, of the ultimate advice for a course of action.
When it comes to taking a decision about whether or not to engage the services of an advisor, the dentist has to first recognize that a problem/issue exists and then acknowledge that it is beyond his normal scope. A brief analysis of the issue is then required to help the practitioner decide just what kind of assistance is needed. Only with these three steps completed, can the dentist actually choose, and then use, a particular consultant.
With the decision taken to hire a consultant, the remainder of this article will identify four considerations, which intertwine with the advisor client relationship, namely:
1) the participation in the process by the principal;
2) the remuneration of the consultant;
3) the danger of consultant dependency; and,
4) the real vs. perceived needs of the principal.
Consider first that hiring a consultant does not mean that you can throw up your arms, sit back and watch what unfolds. You must participate and you have to understand what’s going on. You have to comprehend why Plan ABC, for example, is both the best idea and the right idea for your situation. Keep in mind that a consultant does not always present new, unique or proprietary ideas and strategies every time they’re engaged; often and unknowingly, a client has invited the consultant in to identify a solution that was already there. In this case, without the confidence to implement an existing solution, one might think of hiring a consultant as a process of asking someone to confirm thoughts, check work, and verify a plan of action. Having said that, refer to the National Post(3) that warns of the “pin-wheel” consultant; described as the advisor who gives their client a tweak every so often, and agrees with most of what they say and do. The author chides that as long as the client is spinning, they’ll continue to pay the monthly retainer.
In it’s broadest definition, a consultant is any individual or firm specializing in some field and providing counsel and/or related services in that field for payment(4). On the topic of fees, one must bear in mind a potential conflict of interest arising from this, our second consideration: the subject of advisor remuneration. While the following might relate more to financial advisors, parallel concerns can be identified which would apply to any consultant.
Consultants are usually paid by either a commission structure relating to goods sold or services provided, or by a predetermined hourly rate. It can be said that consumers are uneasy with commissions, because they often feel that they don’t have any control over them. Here exists a possible conflict of interest when one considers that the advisor recommending Plan ABC (our fictitious product/service) is only going to get paid if the client agrees to ‘sign up’ for Plan ABC. Stop and think about how strongly they are recommending it before committing.
An advisor can get paid an hourly rate to apprise the client on the advantages and disadvantages of said Plan ABC. Here it is perhaps in the consultant’s best interest to load up unnecessarily on the hours they spend by over-analysing the options, presenting convoluted arguments of consequences that may or may not occur and generally complicating the manner in which a decision will be made. This advisor could be termed the ‘bafflegab’ consultant(3); the one who operates on the premise that if the client can’t understand what they’re talking about, then the advice must be good. In the hourly situation the consultant’s pockets keep filling up whether the client acts upon the advice given or not.
A remuneration option in the financial services sector, whereby the advisor is paid a fee based upon the percentage of assets under management, is also fraught with problems. Here the consultant may be recommending a tact of remaining fully invested in Plan ABC, (thus keeping total invested assets at a high level) when a more prudent action might be to sell ABC and use the proceeds to reduce debt, or purchase capital equipment, or some other course of action where the advisor wouldn’t be remunerated. Incidentally, when in practice I hired US based management consultants – and paid top dollar for their services. I might suggest that National Post should have included a category aptly described: if it’s really expensive, it must be good!
Don’t forget to ensure that all requirements are identified in advance. So often the little ’extras’ that get tacked on to the arrangement can cause grief and add extra expense. A dentist looking for someone to hold his or her hand during an emotionally charged assignment is particularly vulnerable to this type of thing. Despite there being a contract spelling out what was to be done (in a certain number of hours / or visits), consider that “It can be in the (unscrupulous) consultant’s interest to (continue to) find trouble where you (now) see calm waters” (O’Shea and Madigan)(5)
Does consulting turn into a habit-forming dependency, often long on analysis and short on competitive thinking and imagination? This, our third consideration, has to do with the suitability of the actual plan and the need for the ongoing presence of the consultant. Those with a rudimentary knowledge of the science of organizational behaviour will be familiar with the so-called Hawthorne effect(6). In 1927, Elton Mayo observed plant workers while they performed rather mundane assembly line type jobs. Over time, the lighting in the work area was lowered to see what affect this had on the productivity of the group. The researchers hypothesized that both productivity and quality would decrease as the light conditions deteriorated. At each step of the controlled experiment, the light level was measured in concert with production. By the end of the experiment however, the room was practically in darkness and yet the production was up at an all-time high! It wasn’t until later that Mayo realized that the productivity of the workers had nothing to do with the ambient conditions of the room. The workers had become aware that they were being observed and that they were important to the success of the firm. The workers thought of themselves as a social group and felt comfortable interacting with their supervisors. They also knew they were involved in something important and that their ideas and actions were respected. The mere presence of the outside authority figure was in fact what challenged them to perform at exceptional levels.
So what parallels can a dentist draw from Mayo’s experiment? Perhaps, in order to improve some aspect of performance in the dental office, she should simply bring in some important looking, well-dressed individuals, pay them a lot of money, scurry about measuring and recording every variable capable of observation, and then graph the outcomes. In reality, if she does, it is not unreasonable to predict that at least some variable of concern will improve; now whether these improvements can be sustained in the long term is another issue. Here the dependency seeking advisor quickly presents the dentist with the ‘Phase 2 Plan’. Obviously systems will need to be in place to ensure the continuation of the newfound success, which leads us to ‘Phase 3’. Subsequent arrangements for weekly or monthly visits and interventions become part of ‘Phase 4’, and so on. This is where the dependency upon what Financial Post calls the “let’s get complicated” consultant can arise. My recommendation: be wary of the consultant who follows the principle that the easy way is always the wrong way, and further, the one who refuses to be weaned.
Our fourth consideration has to do with real versus perceived needs. Holtz (1989) describes a few of the major needs facing managers which I extrapolate to ‘fit’ dental practice owners. In no particular order the issues are: employee relations (e.g. motivation, productivity), legal problems (e.g. malpractice, workplace safety), management and administrative office systems (e.g. computerization, recare, effective labour utilization), regulation and control (e.g. licensing, WHMIS, employment laws), tax laws (e.g. CRA rules, incorporation decisions), market factors and competition (e.g. attraction of patients to the office and their subsequent education on oral health matters). These needs (call them problems if you like) can either be ‘real’ or ‘perceived’, depending upon how the dentist looks at it.
It has been said that consultants will find themselves in two distinctly different sales situations(7). In the first situation there exists what is called a felt need where the client is already aware of and accepts the need for a problem solver of some sort. In the second situation however, it appears that the consultant may be attempting to create a need – as the client may not even be aware of a problem, and even if they are, there is either reluctance or ambivalence to make the decision to hire someone to help solve that problem.
While the altruistic advisor would point out that one of the premier skills of the specialized consultant is to identify problems and propose solutions in situations where the client was perhaps blissfully, or even dangerously unaware, to this cynical author, it is the dentist in this situation that has the potential to be taken advantage of. Further, the idiomatic usage of the phrase to create a need implies perhaps incorrectly that the advisor has persuaded someone to want something they truly do not want. In reality, it might be better thought of as educating the client, with the logical next step of the client making the decision themselves as to whether to proceed or not.
In summary, a consultant can only reasonably provide the following benefits in response to their clients’ needs:
1) an objectivity when assessing a situation – free from any internal strains and politics;
2) a single minded focus and concentration on the issue – which the client could not achieve due to time and manpower constraints; and,
3) a valuable perspective arising from having seen the ‘problem’ before – and from knowing what worked to effect it’s resolution.
To quote Jaffe(8): “Your job (Doctor), in selecting and managing advisors, is to screen out the rogues, scoundrels, incompetents, personality problems and the greedy. If after going through this process, you determine that you really need a consultant – what you should be left with are those people whose expertise matches your current and future needs, and whose style and manner provide guidance and counsel in a way you desire.” Lastly I’d suggest you consider: … if it ain’t broke, wind your own watch.
Nova Scotia Dentist – March 2005