TL;DR – If advice is too simple, you won’t value it – even if it works.
It’s hard to distil the complex into something simple and easy to understand. In fact, it’s often why people get paid so well. We ask a doctor to diagnose symptoms and make a correct judgment, plus tell us how to manage afterwards. Same goes with engineers, accountants, and any number of stores we buy product from.
We have a problem. Tell us you can fix it, tell us how, and then get on with it. Simple and straightforward.
So why doesn’t it work this way when it comes to advice from consultants? Why don’t the value of the recommendations match the sky-high fees companies have to pay to receive them?
Price is an indicator of quality, particularly at the top-end.
We’re wired to believe a higher-priced product is better. This belief becomes even more pronounced as the price increases. Why? Because we have more to lose – both financially and reputationally.
If we buy something way more expensive than what’s typical for that item, and it turns out to taste bad, or be of inferior quality, we look foolish!
So we subconsciously compensate. Sometimes, we justify our purchase by adding greater weight to the areas where it outperforms competing items. Other times, particularly with food and drink, we actually taste the difference.
Why does this relate to consulting?
Simply put, if you’re a business owner or executive hiring a consultant, most will go with a ‘name-brand’ company – and guess what? They don’t come cheap.
And because they don’t come cheap, you have to defend or justify your purchase – leading to the vicious cycle continuing. As the old adage goes, “No-one ever got fired for buying IBM”.
It takes a different skillset to identify a solution than it does to implement it.
Management consultants, especially the Bains, McKinseys, and BCG’s of the world, are paid an exceptional sum to identify the path a company should take – and this work is indeed valuable.
What is just as valuable is the ability to implement and navigate the transition required for the company to shift their current path to the desired one.
This is where many companies fail, as the skills needed to implement a solution is very different to the skills to identify the best strategic path. Studies have shown that between 60-90% of strategic initiatives never fully launch, meaning that the value promised is not fully realised, and ultimately much of the work is wasted.
A simplified solution casts doubt over the complexity of the problem – and the capability of the team.
Have you ever experienced a time when you’ve been slaving over a challenge for hours – and then someone comes along and points the solution out to you? How did it make you feel?
If you’re like most, you don’t express gratitude right away – you either feel stupid or mad that you hadn’t got there sooner. It’s even worse if it’s in an area where you feel capable or responsible for.
This is the same way many important people feel if the solution seems too simple – anger, embarassment, and vulnerability. No surprise that executives may not give future work to the company who made them feel that way!
So the solution ends up being slightly more complicated….slightly more challenging to implement….slightly less likely to succeed.
If you’re a business owner or executive, how do you get ahead of this before it hurts your company?
A lot of this isn’t about skill, effort, or the quality of recommendations. Much of it is political, ego-based, and bias-driven. The good thing about this is if we identify the signs ahead of time, we can focus on making a value-adding decision for the company.
A few tips:
– Simple solutions are good if they are supported by evidence – and it doesn’t mean it was easy to solve. In fact, it means the team were excellent in distilling the problem into a clear, valuable recommendation.
– Make sure you hire a team that can design AND implement the solution. This gives them skin in the game, plus they have proven ability to deliver. If you are unable to do this, then create a link between the design and implementation teams before the design team finishes so the transition is smooth.
– If a company’s quote is pricey, understand why, and what it is compared with. Particularly in consulting, there are many individuals and boutique firms with strong capabilities and lower overheads, which most likely leads to a better outcome at a lower price point.
