The Trouble with Consultants

In the wake of the scandal surrounding Angelou Economics and their “recycled” economic development plan for Lexington, there have been a number of calls for developing a more homegrown economic development strategy.

These include Tom Eblen’s thoughts on local knowledge and leadership, John Cirigliano’s project-based approach, and our own ideas about extending the work of the mayoral transition teams.

In response to these calls for a more local economic development approach, I’ve noticed counter-memes emerging.

• One argument contends that we need consultants to fight insularity and to provide a valuable outside perspective.
• Another – in a particularly egregious defense of the indefensible – contends that this is what creative professionals do, and shame on those who called out Angelou – they destroyed a civic foundation of teamwork and trust.

I think these arguments are mostly wrong, and that they mostly distract us from taking the reins of our own economic development.

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I’m pretty jaded when it comes to consultants.

I’ve managed a wide range of consultants throughout my career: industrial designers, research agencies, brand consultants, business strategy consultants, operations consultants, and even internet consultants at the height of the dot-com bubble.

I’ve engaged with enough consultants over the past 15 years to notice distinct patterns:

• Consultants play “follow the leader”.  Every industrial design consultant starts by deconstructing what Apple does.  Business strategy consultants start with Google.  Or GE.  Or Proctor and Gamble.  They consistently take the leader in a category and dangle it in front of the client like red meat.  The implication: “With us, you can make products like Apple.  You can grow like Google.  You can mint money like P&G.  Just hire us and we’ll share that ‘secret sauce’.“
• Consultants tell clients what they want to hear.  A few consultants throw some early jabs to get a client to sit up and listen – “Here’s why your marketing sucks…”  Ultimately, though, they calibrate their recommendations to what they think the client wants to hear.  What they deliver are bland, unobjectionable, safe ideas which don’t really threaten the status quo.  “You can be wildly successful without discomfort!”
• Consultants position for the next engagement.  The most successful consultants are always angling for their next big score.  They deliver big, fat, visually-stunning reports loaded with aspirational recommendations which seem reasonable enough, but which neglect any significant detail on how to execute what they recommended.  Because execution is something they would be glad to help you with, for an additional fee.  They promise the ‘secret sauce’, but never actually provide the recipe.
• Consultants recycle.  Relentlessly.   Once a consultant comes up with a ‘big idea’, they don’t usually isolate it to a single client.  They leverage that idea over and over again, across their business.  They might customize or repackage their big idea for each client, or they might just make it a signature ‘product’ which they patent or trademark.  About eighteen months after we rejected an industrial design, for example, we’d see elements of that design pop up in another client’s products.  Many of the presentations and reports we got from consultants were 70% to 90% ‘boilerplate’ – stuff which could have been used for any of their clients in any industry.

Not every consultant follows these patterns, but enough do that these behaviors are fairly predictable.  If consultants are so predictable, why do so many people work with them?  There are a couple of unfortunate reasons.

First, consultants can provide a kind of political cover for difficult decisions: “I’m not recommending layoffs, the consultant is…”  Their ‘independence’ and ‘objectivity’ make the consultants’ recommendations seem to carry more weight than when those same recommendations come from the people who hired them.

Second, and often related, is that consultants help us look busy when we’re tackling a difficult problem.  They signal to others that we’re taking action: “Our consultant is looking into that.”  In these cases, the appearance of action seems more important than the production of results.

Consultants can, indeed, provide a valuable outside perspective.  Often, they’ve seen a lot of diverse examples of smart stuff that others are doing, and they bring those best practices to their clients.

But consulting engagements perform best when consultants augment and enrich the client’s work – when the clients have already done their homework; They fail when the client abdicates their work to the consultant.

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Given my jaded perspective on consultants, I wasn’t too surprised when Ben Self exposed the Madlibs-style, fill-in-the-blank consulting work done by Angelou Economics in their “Advance Lexington” strategy for economic development.

Angelou fit a lot of the consultant patterns.

• They recycled reports they had created for other cities.
• They played “follow the leader”, holding out their work in successful cities like Austin and Boulder with the implicit promise that Lexington could be like them.
• They also told their clients what they wanted to hear – recommending a much more prominent role for report sponsor Commerce Lexington (which is partly subsidized by Lexington taxpayers) in Lexington’s economic development.  That gives Commerce Lexington “cover” when it requests increased public funding; After all, it isn’t Commerce Lexington’s idea…

The problem for Lexington is that we attempted to have the consultant do our work for us without doing our own homework first. We can’t expect to get great economic results when we outsource our economic development strategy to others.

We had folks whose job it was to produce such a strategy.  They just didn’t.  They abdicated their responsibility to a consultant.  And that’s not acceptable.

The important question: Why didn’t Lexington already have a strategy for economic development before we engaged Angelou?