Don’t Burn Money on Process Optimization Consulting
Huge amounts of money on external process optimization consulting are totally wasted. Please, inspect, reflect and adapt by yourself!
For years organizations have spent huge amounts of money on external process optimization consulting. I believe this money was totally wasted. Not because I don’t believe in process optimization, I just don’t think that this kind of consulting is helpful. I strongly believe that organizations are fully capable to optimize their processes themselves. All they need is time to inspect, reflect and adapt.
This is meant to be an impulse. You might want to reflect on your own consulting investments in the future.
Consulting that doesn’t work
Don’t get me wrong, I am not against professional consulting services. How could I? I had been making my living as a consultant for years. However, from my perspective, not every dollar spent on consulting service is worth the spending. In this post, I distinguish three types of consulting services from which I consider one to be highly problematic.
Three types of consulting services:
- Hyper-specialist consulting: That is any consulting service in which the consultants have deep expertise in one particular knowledge area which is not equally available in the clients’ organization. The consultants guide the client on their way to build up the knowledge within the organization. This could, for instance, be the knowledge on how to set up agile teams at scale or how to build a continuous delivery pipeline. I also consider specialized corporate strategy consulting a part of this category.
- Realization consulting: That is any consulting service where the consulting company uses its ‚manpower‘ to realize specific projects or work within projects as a service. If clients contract a tech consulting company to build up or modify an Enterprise Ressource Planning Software, that’s what I mean. Although this service is usually considered to be consulting it is more some kind of ‚body-leasing‘, which to some extent is fine, I guess.
- Process optimization consulting: That is any consulting service where the consultants don’t use any special knowledge but rather common sense to analyze the current processes from a macro and micro perspective (e.g. modeling, reflection, interview) to suggest process optimization that then will be implemented by the client.
The last type of consulting service, process optimization, is highly problematic to me. But before I make my case against process optimization consulting I briefly describe why this service is valued by the clients.
Why clients value process optimization consulting
The consultants, performing the process optimization, reliably deliver specific suggestions on how to improve any given process. The time it takes to derive and present suggestions for process improvement is usually rather short and gives the clients a more or less specific action plan that can be executed immediately.
How consultants deliver process improvements
The consultants achieve their accomplishments due to three remarkably simple circumstances.
- Consultants have time.
Obviously, consultants are not crammed with the clients‘ daily business. This allows them to dive deeply into the specific topic presented by the client organization. This often results in high-quality results regarding the clients‘ expectations. - Consultants are allowed to view processes end-to-end.
Consultants usually are not assigned to one specific function of the clients’ organization. And even if they are by the clients’ demand, they usually request to view the processes as holistic as possible. This often results in the finding that the hand-offs between particular process steps are more hostile to the process performance than the process steps itself. - Consultants enjoy management attention and support.
This gives the consultants permission to talk to any stakeholders of the specific processes. This is not only heavily insightful it also helps to gain a very deep understanding of root causes for some of the process‘ dysfunctions the client wants to solve. It also has the positive effect that the paying management, which is highly eager to quickly implement the suggested optimizations, is willing to listen as often as necessary to the consultants‘ findings, which leads to quick execution.
Nevertheless, it‘s a problem
Although I recognize the positive aspects intended in process optimization consulting I still point out that the money spent on these consulting services is wasted. Organizations shouldn‘t burn their money on this type of consulting and do something else instead.
Let me explain why I strongly believe this money is burned.
Well-intended suggestions on process improvement usually have a hard time to deliver the expected benefits. This is due to the fact that organizations often struggle to profit from identified process improvements. The reasons vary from ‚change resistance‘* in the ‚implementation phase‘ to ‚backfire effects‘ and cultural friction in the ‚execution phase‘. Often the process improvements cannot deliver on their expectations and make no positive contribution to the bottom line of the organization.
* I don‘t want to deep dive into ‚change resistance‘. I just want to point out that the commonly used phrase is highly misleading since the people in an organization are not resisting change per se. They resist ‚being changed‘, the change that has no meaningful effect on the bottom line or change that violates implicit believes or values.
Consultants on process optimization derive their solutions based on common sense and a pre-packed set of beliefs, assumptions, and values that are usually not explicitly mentioned towards the contracting client. At the same time, the client has his own set of beliefs, assumptions, and values which are also not shared explicitly with the consultants. This may lead to solutions that seem sound and solid but are incompatible with the clients’ organization. This again leads to friction and ultimately in no positive impact on the bottom line of the client.
The project of understanding and analyzing a process heavily ties peoples‘ capacity which might lead to reduced process throughput during a discrete period of time. This might be acceptable to some extent since this could arguably be the price of optimization. What organizations receive for their investment, however, is usually a derivative of some ‚good practice process‘ which is copied and modified from former consulting projects. It could be argued that the contracting organizations will have a hard time becoming better than the competition with a process that is similar to some ‚industry standard‘.
Although most of the process optimization consultants aim to orient the organizations‘ interactions and process toward their customers‘ needs (external reference), they often fail since they themselves and the supporting management re-defines the orientation of the employees’ attention towards the consultant and the management (internal reference).
This always leads to some form of bureaucracy and formalism which never helps an organization to serve the customers‘ needs.
Especially in knowledge work processes, the interactions between people are far more important than the formal process that is supposed to define the peoples‘ behavior. Depending on the process optimization consultants they might be blind to that trivial fact. This is due to their profession which lies in the optimization of processes. They then might change the formal process which in result does not have an impact on peoples‘ interactions and thus doesn‘t actually change the implicit process.
But the most severe problem with process optimization consulting is that the clients‘ organizations never learn from that cooperation with the consultants. In contrast to the other two types of consulting in which the contracting organization receives specific knowledge or a specific deliverable (e.g. some software), the organization receives nothing from the third type of consulting but suggestions for a changed process. The consultants, in that case, are experts in observing, interpreting and optimizing processes. However, this knowledge is not transferred to the clients‘ organization. The organization is the object of optimization and not a learning organization.
This might leads to ad-hoc changes like tectonic shifts where the necessity for change has built up for years and is then released in one big change earthquake that is supposed to fix the mountain of problems. This stresses people and causes mental blockages which ultimately jeopardize the whole attempt to optimize the results of the process.
What to do instead?
I strongly believe that the capability of optimizing one’s processes to achieve better results has to be one of the core competencies of every organization in the world. You cannot be dependent on consultants to identify and implement positive changes within your organization. The good news is that every organization out there has the potential to develop that essential capability. Here are some ideas on how to leverage the existing potential.
The most obvious idea is to create the same boundary conditions for employees as they are for consultants. Employees need time, the chance to develop a holistic view of their working environment and the management's attention to make effective change happen.
Since process optimization consultants basically use common sense to figure out process improvements there is no reason why employees couldn‘t do the same. Moreover, consultants usually get their insights on meaningful improvements by observing and talking to people ‚in the process‘, which means that the whole knowledge to design improvements has always been part of the organization.
If you argue that the people cannot have the same time as a group of consultants then you might assume that the people ‚in the process‘ have to be busy all the time to not harm the economic performance of the organization. However, this is hardly ever true. Even if a decrease in process-utilization would harm the companies bottom line this process utilization is never equally dependent on every person involved in the process. People who do not work within a ‚bottleneck work center‘ have always the capacity to support colleagues in process improvement. This is especially true if people support colleagues in different corporate functions (for example the purchasing department may support the fulfillment department ‚downstream‘ a shared process). This is possible since no special domain knowledge is necessary to optimize a process by using common sense.
If the people in an organization have no experience in process optimization than a hyper-specialized consulting company (type number one) can bring in the knowledge on how to do it right. The difference here is that the knowledge on how to cause positive change remains in the organization long after the consulting contract is expired.
This example can be seen in newly formed agile teams that learn from experienced consultants how to perform meaningful retrospectives and how to improve by collaborating with their senior management in order to continually remove severe impediments.
In addition, we should orient people in organizations meaningful toward the customer's needs. This immediately reveals a whole set of relevant process improvements that have a positive impact on the customer and on the people within an organization.
People in organizations are experts on things that don‘t work outright. They talk about those impediments all the time. You don‘t need external staff to collect those impediments. Since people always strive for acknowledgment and positive reinforcement managers can focus their attention on those who collaboratively remove impediments already. This can lead to a chimney effect in which more and more people show interest in impediment removal. If you then allow people to perform meaningful changes within ‚their own process‘ they receive the autonomy to continually change its own working environment without heavy frictions.
Since some impediments cannot be removed within a process but ‚above‘, the management may collect those impediments carefully. It is not necessary to immediately remove every impediment mentioned, however, re-occurring impediments are worth considering with full management-attention. As long as relevant impediments are removed by the management you don‘t have to worry that the people don‘t identify new room for improvement.
Sometimes people in organizations recognize that they have a problem which they cannot solve with existing knowledge — for example, they recognize that they need a radically increased level of automation in invoice recognition or software integration testing. This is fine. This knowledge gap again can be closed by using the hyper-specialized consultants (type one) and, if the capacity for implementation is not available within that organization, you may ask a realization consultancy (type two) for help. Just make sure that the investment in those consulting companies results in positive future bottom-line results and that the knowledge used in the consulting projects remains vibrant in your organization after the consultants left.
Honestly, I have no idea what amount of money could be saved if organizations would abandon process optimization consultancies. I guess it is a lot. I highly recommend to critically inspect your organizations‘ consulting contracts. Avoid that consultancies take away your wristwatch to tell you what time it is.
