The Ultimate Consultants, and Why Accountants and Risk Managers Aren’t Among Them

 

Prior to revealing the adventures of Stanly Raspberry in last week’s blog, I was discussing the inherent difficulties of consulting from the point of view of comparing and contrasting those consultants who were very familiar with a certain repeating problem, but may have little or no idea of how the client organization works, or its weaknesses, with those consultants who were very familiar with the organization, but in a bad position to advise against deeply-held, ingrained management pathologies for fear of losing the business. This week I would like to explore the former category a bit further, since that is where we will discover the optimal consultant.

Consider your family doctor. You see her whenever you are moderately or severely ill. Is she a consultant? Well, she certainly provides a service, one that can’t be performed by just anybody. On the other hand, does she ever, herself, consult a consultant? Well, yes, when her patients have, say, a heart condition, or cancer. In that case she would employ a specialist on your behalf. Now think about the characteristics of the doctor your family doctor is consulting: your family doctor sees you, over and over, for a variety of ills. The consultant will probably only see you once, for this particular type of problem. Assuming the consultant is successful in the prescribed treatment, he will, in all probability, never lay eyes on you again. I’m thinking that this is a trait of true consultants everywhere: they know the problem, and only incidentally interact with those with the problem.

Of course, the project management world is a bit different from the health care industry, but the nature of consultants is something of a constant – which raises the question: What problems would bring a project-performing organizations to bring in a consultant? I’m thinking one (or both) of two reasons: there aren’t enough projects (or customers willing to award project work to the organization), or the projects that the organization already has aren’t performing well. Let’s take them in that order.

When the proposal backlog is thin, or the win rate is on a downward trajectory, who’s responsible, and what do they need to know? The responsible parties are the strategic managers (or those who perform that role), and they need to know about the competition, what they’re doing, how they’re doing it, what their market share is, and why. Only with this information in hand – and, by implication, the existence of the management information systems that generate this information – can they make the informed decisions that can reverse the decline of the proposal backlog and/or contract win rate. And now, ask yourself:

Does any of this information come from the general ledger, or from a risk analysis?

Rather than have my wonderful readers go to the proverbial back of the book, I’ll give the answer up right here and now: no, nein, nix, no no Nanette, nyet, and, well, no.

Okay, what about the other consultant-inducing problem, of poor-performing projects? In these cases the decision-makers need to know how those projects are performing, both with respect to time (schedule) and cost (budget). “Aha!” say the accountants. “That cost and budget stuff – we’re all over that!” Well, not actually, not in project space. The general ledger – the chief (only?) source of management information at the disposal of the accountants – doesn’t really do cost performance. Oh, it can tell you how much you’ve spent, and even compare that to what you were planning on spending. But that’s not the same as actual performance. To get that, you must be able to ascertain how much progress was actually attained against what was actually spent, and how much progress was actually attained against what you had planned to attain. Then – and only then – can an informed decision be made based on project performance.

Soooo… the accountants can’t provide this information, for the reasons just stated. The risk managers can’t provide this information, either. They can only tell you the estimated odds of bad stuff happening.

The obvious conclusion to be derived from our little mental exercise is that the ultimate consultant seeks out data, processes it into information, and provides that information to strategic and project managers on market share and project performance that enables the overcoming of whichever problem the organization is facing. They do this because they’ve done it before, and know which information streams are relevant, and which are superfluous.

And in neither case do accountants nor risk managers qualify.