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Invest in Procurement and Employee Training Not High Priced Consultants

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Why do organizations continue to use high priced consultants and consulting firms instead of their own talented employees? Before I answer this, I must confess that I am an experienced consultant having worked for both small and large consulting firms.

One of the reasons for using consultants is that companies are spending less and less on employee training and development. Another is that they have a “bare-bones” staff, leaving no breathing room for move-the-business-ahead projects. Investing in people is just not in vogue anymore.  Collaboration and team building are favored but employees need the skills, training, and tools, both hard and soft, to excel, not one day zip-lining exercises. Many companies are one-trick-ponies. When a financial or other crisis occurs they first cut people. If it gets worse they then cut more people. This is the exact wrong approach to building employee trust in management.

The tragedy of this is that there are many talented people within a company who could do the same work and projects that expensive consultants are hired to do. They understand the culture better and how things are accomplished in the company. They would be perfect for process improvement and new initiatives. There are some exceptions, like new software or apps. The approach here should be to develop internal employees to become trainers and maintainers of the software with a high degree of independence from the original software installer-supplier.

Often consultants are brought in to settle office politics or political disputes. One department wants the business run one way and another department wants it run differently. A consultant is brought in to sort of arbitrate and present a solution that will be agreed upon. An experienced consultant knows that the department head or vice president who is paying for their hours expects the recommendations to meet their needs and wants, not their political rival’s. Therefore, the person who is paying for the consultant gets their “right” answers. When consultants leave, the losing party or department often tries to sabotage or resist the consultant’s solutions.

Consultants are just doing their job. They want more billable hours. The company’s culture is often at fault. There are many employee empowerment plans and development approaches that can create empowered and gifted employees who can run important projects. One of them is pay-for-skill or knowledge compensation. It is a methodology devoted to continuous learning. It is very close to running a university or technical school within the company.

Process improvement is another area that can be effectively run by employees. Lean, Lean-Six-Sigma, and six sigma have been successfully led by internal employees.  These methodologies are not as difficult as they are marketed to be.

A consultant may be needed briefly for initial training, but long term process improvement should be run by the employees. Insist upon the train-the-trainer model so your own people can run future training for other employees. Kaizens are a good straightforward area to start and a green belt level employee can lead a kaizen effectively.

Here is a story from my experience: I once interviewed for a procurement vice-president position. The interviewing company had a major consulting group do a costly spend analysis and make recommendations to transform or reengineer procurement to supply management. The price tag was $50,000. The consulting group left a well-organized professional three ring binder of their recommendations. The binder sat in a bookcase gathering dust for six months with no action taken.

At my current company, the procurement professionals just read the literature and investigated best practices. We trained procurement personnel to execute the transformation and were well on our way to saving millions of dollars. We self-designed and launched a 200-hour professional training course submitted for CEC credit. In the interview, I mentioned what we were currently doing and the progress that we were making with zero consultant involvement. The steps we were taking were, in fact, very similar to the recommendations of the high priced consultants. My team just self-researched and executed the transformation. We were internally managing the transformation and training our own people to execute it. I was offered the job, accepted, and eventually read the consultant’s report. But first I insisted that the current company employees would run the purchasing transformation without outside consultants or interference. All of the steps and the recommendations from the consultants could have been figured out by the company’s current procurement professionals with a good procurement leader leading and inspiring the transformation.

Consultants do have value and a purpose. Companies should always examine the internal option first and use the talents of their own employees to improve the business. Investing in employee training is the best short and long term way to stay ahead of the competition.

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Friday, 23 October 2020

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