Consultant, Or Auditor?

The answer to the question in the title might not be as clear-cut as some in GTIM Nation believe, and to demonstrate this let’s break out the Game Theorists’ favorite tool, the Payoff Grid. Consider that both consultants and auditors seek to review the target organization’s business practices as they manifest in its reviewable outputs, hoping to glean insights into its management techniques and how those techniques are eventually implemented and executed. This being the case, the two axes for the Payoff Grid readily present themselves: (1) Is the organization doing something correctly or incorrectly, right or wrong (as determined by either the named audit standard, or the Consultant’s personal opinion), and (2) Is the person making this determination correct, or incorrect? Here’s the Grid:

	(A) Determination Claims It’s Incorrect	(B) Determination Claims It’s Correct
(1) Practice is Actually Correct/In-Compliance	Finding of fault is wrong.	It’s all good.
(2) Practice is Actually Incorrect/Out-of-Compliance	It’s all good.	Finding of “good business practice” is wrong.

As is the case in most of these Payoff Grids, Scenarios B1 and A2 show the ideal, sought-after outcome. The Consultant/Auditor makes the right call, and revisions to the organization, its business model, and practices can be based on reliable information. But it’s in the abnormal Scenarios where the trouble lurks, so let’s get right into them. While both Auditors and Consultants are vulnerable to the abnormal Scenarios, the Auditors are more likely to err in A1, while the Consultants are more likely to err in Scenario B2. Here’s why.
An Auditor will usually be hired by an agency outside the target organization, for the purpose of finding fault or errors in the way the target is executing scope, recording transactions, performing proper safety functions, etc., etc. To this end the Auditor would never want to find themselves making a determination that falls within Scenario B2, which would represent a failure on their part to correctly identify a real problem. A B2 error could end the Auditor’s career if that uncaught error ended up causing catastrophic results later. On the other hand, an A1 error has very little downside, at least to the Auditor. The target organization would simply have to spend more time and energy developing either an evidence package that explains why the determination is mistaken, or, in a surprisingly high number of cases, admit to the “error” and provide an evidence package on why it won’t happen again.
Same Payoff Grid, but very different payoff scenario for the Consultant. Consultants are almost always hired by the host organization, meaning that somebody within said organization has recognized a vulnerability or shortfall in performance, thinks that they know the approximate area of causality, but lacks either the technical expertise or organizational clout to specifically identify and rectify it. Consultants in areas where the targeted practice or underlying management science is clearly and thoroughly captured in some sort of codex, and where the collection of the evidence package is well-proscribed (like in accounting) have a fairly straight-forward path. Not so outside those confines, as in Project Management, which brings us to our very first barrier to consultant accuracy: what’s the audit standard, or baseline against which the host organization is being evaluated?
Typically, this would be the Consultant’s education and experience, augmented by some published standard, such as the PMBOK Guide®. But those three bases vary wildly – the PMBOK® alone has gone through eight revisions. All things fail by irrelevant comparisons goes the saying, and there’s going to be considerable pressure for the Consultant’s findings to be consistent with the things their sponsor suspected in the first place.
Then we have the problem of mono-dimensionality. Recall the old saw “affordability, availability, quality: pick any two.” Does the host organization have a business model oriented towards availability and affordability? Then the recommendation that additional resources be used in pursuing a higher level of PM quality would probably not be indicated, but a consultant using just the PMBOK Guide® as the standard might recommend exactly that. Also consider the makeup of the host organization. Is it dominated by the Maccoby architype Jungle Fighters and Company Men, with Craftsmen and Gamesmen in short supply? Then the recommendation of more scrupulous adherence to the aforementioned PMBOK Guide® couldn’t happen, even if it was the right call. And these are just two out of a myriad of factors that should come into play when formulating a workable correction to an existing management strategy, let alone the discovery of the optimal one.
What we have here is a situation where two different but related roles of organizational outsiders, tasked to evaluate that organization’s business model or management practices and generate findings/recommendations for the errors they perceive, are working under pressures that push them towards a specific type of bias. Let me be clear: I’m not asserting that most (or even a plurality of) auditors or consultants will succumb to these influences, and allow their findings to stray from an even-handed approach. What I am saying is that, if the results of this outsider’s analysis are influenced by who is paying for them, even in the slightest degree, then we’re no longer in the realm of the management sciences.
So, sure, go ahead and hire consultants and work with auditors. Just understand why and in what direction they are may err.