No magic solution

first_img Previous Article Next Article Companies have embraced consultants with almost indecent haste. But, saysCalvert Markham, HR departments should tread cautiously when going down theoutsourcing routeHad you visited the Ford manufacturing plant at Dearborn, Michigan, 80 yearsago you would have seen coal and iron ore going in one end and cars appearingat the other. Today, much of that plant lies unused, and Ford’s involvement inmanufacturing is likely to become even smaller, according to The Economist. Ina recent article, it reported that “today’s metal bashers will disappear.In their place will be vehicle brand owners [which] will do only the core tasksof designing, engineering and marketing vehicles.”1 This is just one example of how the strategic fashion has shifted from‘make’ to ‘buy’ – and not just in manufacturing. When I started my career (withICI), security, cleaning, the canteen and other services were all runinternally. Nowadays it would be an unusual company that did not contract themout – IT services and now complete functions are outsourced. And HR is nostranger to this, with companies such as Exult and Xchanging offering to takeon much of the routine work. All this is great news for consultancies and other professional serviceproviders. Quite apart from outsourcing, as organisations have slimmed downthey have less capacity to take on significant projects, and so call onconsultancies to support them. And consultancies have boomed as a consequence.At this point I must declare a personal interest: I am an HR consultant, and myfirm trains consultants (among other things). But having made that confession,you may be surprised that I propose to question whether the use of consultantsis an unalloyed benefit. My advice is: think twice before engaging consultants. There is more to aconsultant engagement than simply outsourcing work. Why the caution? Below is alist of potential problems outsourcing can bring: – Knowledge leakage: much of the know-how capital of an enterprise lies inthe heads of its people, and one of the jobs of the HR department is to nurtureand grow that capital. Ground-breaking work allocated to outsiders means theyget the benefits of the learning. Ask yourself: is the journey as important as the destination? – Demotivating your staff: when you eventually become an independent HRconsultant, do this: ask the people at the bottom of your client organisationwhat they think, and tell the top management what they said. They are alwayssurprised. Robert Townsend originally accused consultants of borrowing your watch totell you the time, but that is often because the top of the organisationdoesn’t listen to the bottom. Ask yourself: do our people already know what to do? Blame shifting: of course, you may have political reasons for gettingconsultants to do what your own people can do. But remember – there is no suchthing as a consultancy project – they are simply client projects in whichconsultants are engaged to help. Ask yourself: am I subcontracting work – or just risk? One of the perennial features of consultancy, however, is that if things gowell, the client takes the credit; if they go wrong, the consultant takes theblame. (They say that if you rearrange the letters of ‘consultant’ you get‘scapegoat’.) Enron? No surprises While on this topic, I should mention Enron. It was probably only the pressthat was surprised with this affair. Everybody knows that: – auditing firms get a lot of other work from their clients – it is a fiction that shareholders appoint the firm that audits the companyon their behalf – they mostly rubberstamp management’s decision at the AGM – sooner or later, something like Enron would happen. In June 2001, HarvardBusiness Review presciently commented: “As for accounting firms, if theyhelp a company meet its numbers – sometimes by ignoring, or even suggesting,some pretty dubious bookkeeping legerdemain – then they can usually count onretaining the company’s lucrative auditing business and maybe pick up aconsulting contract as well.”2 So, no surprises there. What would have been surprising would have beensomeone holding up their hand and taking responsibility. A banner for HR Mother Teresa was once asked to take part in a march against the war inVietnam – she refused, saying that she only marched for things, not againstthem. So what should HR be marching for? Consider caution. Preserve social capital: The Roman scribe Petronius Arbiter famously said:”We trained hard, but it seemed every time we were beginning to form ateam we would be reorganised…We tend to meet every situation by reorganisingand a wonderful method it can be for creating the illusion of progress, whileproducing confusion, inefficiency and demoralisation.”3 The informal systems of trust, norms and networks is known as socialcapital. Change frequently destroys social capital as many downsizedorganisations have found to their cost. A simple way of destroying socialcapital with your customers is to make sure you frequently change the salespeople serving them. Recent research has shown that social capital contributes not only to thequality of life, but also to the economic well being of society.4 So, start deploying the virtues of the informal organisation – Enable people’s learning: providing mentoring and coaching is a corporateresponsibility. With de-layered and slimmed down organisation structures, it isoften difficult to provide the level of support required. So individualsthemselves have to take responsibility for their own learning.5 But rarely are they equipped to do so. In the past couple of years, my firmhas been running courses for clients that we privately call “theconsultant’s survival kit”. An important module in these courses ispersonal development – identifying performance development needs and how theymight be best met. So, help people help themselves – Develop consultant competencies: a simple distinction is that whereas managementis about maintaining continuity through processes, consultancy is aboutinfluencing discontinuity through projects. But the reality is that much ofmanagement effort nowadays is directed to change – discontinuity – throughprojects, often working in multi-functional teams exercising influence, ratherthan command and control. So managers – in this aspect of their role – have touse the same skills as a consultant. And, of course, HR specialists operate for much of their work as internalconsultants. Indeed, with much of their work now outsourced, their job toobecomes more about the management of discontinuity. So, acquire a consultant’s competence. No magic solutionOn 1 Jun 2002 in Personnel Today Comments are closed. Related posts:No related photos.last_img read more