Published on: September 27, 2020
Becoming More Agile: The Benefits of an External Consultant
Comparing the old way with the new way

The pressure on organizations to remake themselves in an ever-changing competitive environment is palpable. Business leaders, academic theorists, and consulting gurus proclaim the mantra of agility as the certain, if not the only, path to survival.

The old ways of doing business no longer work, rendered obsolete by new technology, consumer expectations, and precarious supply and distribution lines. The chaotic environment requires that executive managements redesign, rethink, and reorganize policies, procedures, and processes as they struggle to recover from the effects of a global pandemic and declining economy.

Ironically, the organizations most successful in fostering employee engagement are likely to find regeneration difficult due to their confidence in the new team culture. Business leaders encourage inter-company group membership, i.e., “teams,” as they reinforce a sense of accomplishment and engagement in the team’s and organization’s success. For many business theorists, employee engagement is synonymous with team membership.

People naturally affiliate and identify with “teams” or groups – religious congregations, social or political organizations, employers – because they confirm self-worth, a necessary quality of a healthy life. Psychologist Donelson Forsyth of the University of Richmond notes that members feel happier and more satisfied than loners.

The Darkside of Employee Engagement

Unfortunately, too much employee engagement can be an obstacle to change. Groups develop cultures to protect their membership and set them apart from others. Members consciously and subconsciously safeguard the status quo by encouraging conformity, discounting external information, and exaggerating membership’s positive aspects. In many cases, groups and teams develop hostility toward non-members as described in the psychological study, The Robbers Cave Experiment.

Not Invented Here (NIH) Syndrome

The rejection of new ideas from outside an organization is not a recent phenomenon. Successful businesses are particularly vulnerable as the organizations and their employees ignore their vulnerabilities:

  • Western Union and the Telephone. In 1876, the premier communication company in the world rejected an opportunity to acquire Alexander Graham Bell’s patents for the telephone due to their inability to evaluate the effect of voice communication on the world.
  • Blockbuster and Netflix. The video rental company and its ubiquitous retail stores failed to understand the impact of video streaming on their business model. Blockbuster management turned down a partnership with Netflix because “it was a very small niche business.”
  • RadioShack and online sales. Once the go-to supplier for DIY electronics hobbyists, the electronics retailer failed to recognize the impact of online sales on their brick-and-mortar business model (4,300 stores in North America). According to Professor Yoram Wind of the Wharton School of Business at the University of Pennsylvania, “They lost touch with the changing consumer dynamics, and they lost with the changing retail scene.”

The examples are not the only companies whose myopia led to disaster, and they certainly will not be the last. A research report from the Rotterdam School of Management found that employees who are too comfortable with their colleagues – an overly-strong corporate identity – are often unwilling to challenge ideas or think differently.

The Solution to Groupthink

Eliminating groupthink: the benefits of using external consultants

Eliminating groupthink and other types of cognitive bias typically require direct intervention by senior executives. At the same time, companies must resist the temptation to “throw out the baby with the bathwater.” Remodeling, not a tear-down and rebuilding, is the goal, especially for those businesses that have successfully created a sense of team identity.

Experienced change agents recognize the importance of teams to deliver results and the likelihood that their loyalty to past success can misdirect team efforts. An effective agent can challenge group think without threatening group cohesion or commitment, transitioning from a defensive mindset to the offense, i.e., making a good company better.

Internal or External Change Agents

Many companies mistakenly consider the decision whether to look internally or externally for a solution as “either/or,” decided on the organization’s internal capabilities, capacities, and costs. All factors being equal, company executives favor internal parties due to familiarity and convenience. This process fails to account for a project’s specific requirements, or obstacles likely to arise for the project team. Also, it fails to consider a third option – the blending of external and internal resources.

1st Option – Internal Resources

In recent years, many companies established formal and informal internal consulting teams to provide specialized knowledge, management, and human resources for the company and departmental projects. Examples include IT installations, process improvements, and training. The advantages of internal project consultants include:

  • Lower costs. Malte Bernholz, head of the internal consulting group of EMSII, claimed in a Harvard Business Review article that the costs of an internal project team were “four to six times lower than the fees of a big-three firm (McKinsey, Bain, or Coston consulting Group).” While smaller, more nimble organizations like HotPMO have lower fee schedules than the international firms, few question that employees cost less than external consultants.
  • Familiarity. Internal consultants know the organization’s culture and people where they work, “where the bones are buried” and “the third rails.” While an advantage in some cases, their identification with the company can be an obstacle for frank conversation and creative thought. In other cases, their closeness with other employees diminishes their credibility and professional status.
  • Capability. Internal consultants focus on their employer’s specific problems, gaining detailed insight that can lead to the rapid adoption of project changes. At the same time, they lose the benefit of external experience and the opportunity to see the results and problems of solutions implemented in other situations. Depending on their employer’s policies, an internal consultant may lack the opportunity to grow in their field through industry contacts and other practitioners.
  • Capacity. Few companies can afford to retain idle resources, i.e., trained project managers, on the shelf and available for projects when they arise. The lack of availability requires deferral or elimination of projects and interruption in on-going projects’ progress if an emergency need appears.

2nd Option -External Resources

Companies that lack internal resources to direct and implement projects either turn to external consultants from necessity. The advantage of an external PMO consultant includes:

  • Availability. External consultants are generally available on short notice to handle ad hoc or long-term projects. Depending on the size of the consulting firm, extra resources can be enlisted as needed.
  • Objectivity. Consultants outside an organization bring independence to the project, especially when groupthink and employee complacency are problems. Being external, they are less affected by pressures to conform and more likely to be considered neutral experts focused on the optimum results.
  • General experience. External consultants typically have a high level of expertise and experience, mainly because they deal with multifaceted issues at various clients.
  • Defined cost. External project consultants, even with higher prices per hour than employed consultants, are engaged for a specific period or purpose; when the project is over, the cost stops. The use of outcome-based contracts enables an organization to establish a positive benefit/cost ratio.

3rd Option – External Consultant with In-house Staff

Employing an experienced consultant to work with an organization’s internal staff ensures that the benefits of external expertise and objectivity compliment the lower costs and familiarity of the internal team. The ideal consultant blends training, consulting, and coaching to strengthen the staff’s competence and capability.

Employing an experienced consultant trained in the skills necessary to become an agile competitor is the first step of a transformation. Using the consultant as the catalyst, not the solution to change, ensures that the company will have the internal ability to meet future challenges in markets, products, and processes.

Engaging a Change Agent Consultant

Companies often approach the engagement of a consultant as if they were hiring an employee. They fail to recognize that the relationship, responsibilities, and expectations for a consultant differ from those of potential hires:

  • Rather than employer/employee, the contract between the company and consultant is a professional/client relationship. The professional expects due respect and consideration while recognizing the client is the ultimate decision-maker. Clients expect integrity, knowledge, and specificity from professionals without bias or excuses.
  • Impact. A consultant’s work must be transparent, verifiable, and meaningful to the organization’s goals and objectivity. Unlike employees, there is no learning phase in consulting projects.
  • Responsibility. Consultants must deliver projects on time, on budget, with the expected or better results.
  • Independence. Consultants must be immune to internal pressures to conform or accept results less than expected. Honest communications in all circumstances is a prerequisite of trust between professional and client.
  • Resourcefulness. Project consultants confront and overcome obstacles efficiently and effectively as needed to accomplish project goals.

Disappointments and dissatisfaction can arise during an engagement, especially when project goals and parameters are not carefully defined. Expectations on both sides need to be thoroughly discussed before an engagement to avoid confusion. Some questions to be investigated include

  1. Is the full-time, on-site presence of a consultant expected or needed?
  2. Is the engagement solely implementation? What are the available resources, milestones, measures, and objectives? What is the proposed organization of the implementation team?
  3. Will the assignment include staff training, team leadership, or follow-up coaching? Will different elements of the engagement be conducted sequentially or simultaneously?

Before engaging a consultant, consider and document your objectives and concerns; the more you understand your needs, the more likely they will be satisfied. Remember, many consultants can help you transition to an Agile organization, each with strengths and experiences. Why not have a call with us to see if HotPMPO are the right partner for you. Our mission is simple: Helping organizations deliver the right things, faster. If this sounds like what you are looking to achieve, then get in touch with us today.

 

 

 

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