November 28, 2019
What keeps CEOs up at night? Concerns range from the (maybe) imagined (what is their executive team not telling them?) to the likely (who will be the next competitor to step out of nowhere?). Being a good leader doesn’t mean you should always be able to answer these questions. Even the world’s Pulitzer-winning writers needed an editor; an editor can step outside of the work and find blind spots, objectively, in a way the creator simply cannot.
In the business world, hiring a consultant can feel counterintuitive. If there’s a problem within the company, who better to solve it than the employees who know it so well? How could a consultant–an outsider–possibly know what’s best for a company that a founder has spent years building from scratch?
Being an outsider is actually what makes consultancies most valuable to a business. We can become so deeply entrenched in our systems that it becomes impossible to see the forest through the trees. Sometimes, we all need an editor, and there are particular times when a business needs a consultant to identify what is preventing them, internally, from overcoming obstacles.
In my thirty years in consulting startups and enterprises, I’ve seen this issue from multiple perspectives, and there are five instances where it makes absolute sense to hire an outside consultant–to the point where it could save a business from shuttering its doors.
Failed/Delayed Product Launch
At the heart of this issue is the inability to scale. Perhaps leadership tried to rush-hire a development team to meet demand for a new product, and as a result, shipped a subpar product and had to spend a significant amount of money fixing it. In the absence of a new product, there could be a problem with the engineering team shipping too infrequently or shipping under a constantly delayed timeline. This can translate to customer attrition and a leg up for the competitor.
Businesses in this position tend to opt for the same courses of action: trying, again, to build out a great development team (which can take up to a year). Or, reduce costs by hiring temporary contractors to augment their own workforce–oftentimes using offshore contractors, which causes a new set of workflow and communication problems. When in dire straits, the business may just kill the product entirely and cut (rather than recoup via investment) their losses.
It’s about asking the right questions. A delayed or failed launch could be the result of an inefficient infrastructure process, or that the creators didn’t understand the problem they are trying to solve. More commonly, they didn’t take in the full breadth of stakeholders, from those operating the system to the users. This seems like something that should be obvious to the business, but when you’re rushing a product out the door it’s easy to make assumptions.
How a consultant can help: Since the definition of insanity is doing the same thing over and over again and expecting different results, repeating the mistake is not the best idea. A consultant can find the engrained issues in the recruiting process. For example, if the business is recruiting heavily based on employee referrals, the problem may be that there are too many like-minded people on the team who are replicating expertise, not bringing new ones.
Consultants can be helpful here because they bring fresh eyes to the situation, and ask the right questions. They’ll first validate (or disprove) the assumptions the company is making about its product, its users and its purpose. Often we find that there are perspectives and nuances that didn’t come out the first time. Doing this can save a ton of money, but more importantly, reveal opportunities to delight the system’s users.
A hack or a service outage can make national headlines when it hits a business and compromises customer data–so can other bad scenarios like discrimination allegations, patent troll lawsuits, and foreign spying.
The CEO is afraid of losing his job, and the CTO is afraid of his team walking out. If it’s a startup, they may never receive funding again. In this scenario, leadership that’s resistant to working with a consultancy will either kick the can down the road under the pretense that lightning doesn’t strike twice, or they’ll assemble an internal specialty committee to investigate and prevent similar events in the future. But the fact that it happened in the first place signals a fundamental problem that, clearly, current employees didn’t see in the first place. Finally, another popular choice is to hire a senior executive–and while that person is coming from outside, they must still work under the restraints and expectations of the business.
How a consultant can help: Let’s say in this case, the traumatic event was a hack. One of the things that start to develop as consultants add product security, etc. is the notion that we help companies discover or validate a business’ assumption, frame the right questions around it, and show the right problems to solve (and determine in what order they should be tackled).
Once that’s established, we move into building a solution that makes sure this traumatic event is either impossible or highly unlikely to repeat. Consultants can look at what the prototypes are, how to build them in a way that tests hypotheses around solutions. During the build phase of those initial prototypes, consultants should know how to test and validate quickly, and furthermore, how to iterate.
Unexplained Downward Revenue Spike
After a strong stint of maintaining market share, suddenly revenue is trending downward. Stocks are heading south and analysts aren’t piling on the praise. The executive team may think they know why…but are they sure? And even though they may have identified the source, do they have a solution they can actually execute? Declining revenue is a problem that investors simply can’t ignore, so the stakes are high.
What most companies will do is reallocate internal resources, which drains other departments without removing the internal bias—and often results in lots of suggestions but few planned courses of action.
How a consultant can help: Consultants can bring variable knowledge on what outside forces could be the cause of a business’s dwindling value. For example, the social media platform Tik Tok has risen to popularity rapidly and is now outpacing Instagram. In a typical corporation, executives tend to be older. How many of them would know about a business’ Tik Tok equivalent? It’s not even on their radar.
Everybody knows the label Xerox–in fact, we turned it into a verb. But Xerox went through some hard times that almost ended their business because they simply didn’t see digital coming. Tobacco companies weren’t ready for local PSAs and federally funded public health campaigns. Airbnb exploded before the hotel industry even knew what hit them.
Any large business that’s been around for a while knows that the “scene” is constantly changing, and it takes work to make sure a product isn’t becoming obsolete in the face of those changes. Even powerhouse brands that are household names need to stay on top of the competition, and this has never been more true with the intense rate at which startups are arriving. And at a certain point, the “retrofit” approach (updating infrastructure with complementary components while essentially keeping with the original infrastructure) will not work for the long-term.
How a consultant can help: Market disruption means the users, operators and distribution has changed. It’s important to research (and develop on it) to understand what that disruption is and what the root cause is. Consultants can help by offering an independent view, placing supreme priority on the validity of the research and the results they’re giving–independent of what the client wants to hear. Delivering that message might be challenging, but a consultant worth their salt is able to recognize that trend and deliver it in a way that is persuasive, and enables executives to confront that reality. Even better, consultants can create a plan of action.
I can hear it now: “rapid growth is a GOOD thing!” Well, not if a business isn’t ready for it (Shark Tank investors have rejected startups for this very reason). Signs that a company isn’t prepared to scale: everything becomes a four-alarm fire; too many projects are in motion but few ever come to fruition; employees are working long hours consistently (and burning out); leadership is focusing more on product features/shiny bells and whistles rather than the strength of the product’s infrastructure.
One of the key aspects of rapid growth is the notion that what worked for a company of 5 people will work for a company of 50. The problem is that execs, rightly so, are extremely busy trying to scale the company; they have to make challenging choices about where to invest. One important but less “shiny” thing is look at the infrastructure underneath the products and services, especially if it’s software. Anything that delays production is bad to an executive, but stick with an original system too long and it will break into a million pieces–just as companies are landing a big deal or trying to level up to new compliance, for example. Businesses can lose many opportunities if they demonstrate that they can’t change and support the efforts of the sales team, the product teams, etc.
How a consultant can help: First, hire a consultancy that has been through that growth stage themselves, or have worked with clients that have. They are able to see the pattern around what enables a company to automate things that used to be done manually, and processes that are time inefficient. They can also identify people–like a business’ best engineers or designers–who are also able to manage others and think strategically. After that, they set supports that will give those employees what they need to do their jobs well. A great consultant can help businesses make that transition without losing momentum. For example, if consultants help companies set up a system that automates continuous delivery (CD) systems, that will pay off for many years because it can scale at the same rate as the organization.
In most of these scenarios, the root problem tends to be that companies have assumptions (whether it’s about their product or the market they’re in) that they really haven’t validated. They believe they have the answer to a problem (or are actually right, but for the wrong reasons) and it can lead to huge losses in going to market. When these five events happen, it’s very much worth it to hire consultants that can offer many abilities (product design, research, human resources and infrastructure expertise). Those consultancies have the ability to diagnose and build prototypes–a critical component to long-term improvement. And moreover, great consultants bring more than answers; they teach their clients and share knowledge that is invaluable over the life of the company.
Everett Harper is CEO and co-founder of Truss, which helps startups scale and large enterprises and public agencies transform from legacy to modern systems. For more information, visit https://truss.works.