This post has been adapted from the A Leader’s Guide to Working with Consultants paper by Josh Atwell, Elizabeth Donaldson, John Esser, Ron Forrester, Ben Grinnel, Jason Hobbs, Courtney Kissler, and Jessica Reif.
Dependency relates to understanding the business differentiation of the outcomes and also the intent for establishing internal capability. The focus will be on understanding how critical the business outcomes are to your strategy and when you have critical needs. Then, you are going to want to focus on moving to the upper-right quadrant. Establishing clear ownership internally and setting the team up to truly own the capability long term will reduce the risk of creating consultant dependency. Figure 2 shows the dependency quadrants, ranging from most ideal in the top-right quadrant (you own your destiny) to least ideal in the lower-left quadrant (consultant dependency).
We will go through each quadrant in the post below. To find out where your company lands in the Accountability quadrants, download the full A Leader’s Guide to Working with Consultants paper and take the free assessment.
You Own Your Destiny (Top-Right Quadrant)
The “you own your destiny” quadrant represents organizations who have entered the consulting engagement with a clear understanding of how critical the capability being delivered is to the company strategy. They understand how involved their internal teams need to be in the engagement. There will be no dependency on the consultant when they complete the engagement, as internal teams will be ready to support the capability and investment will be visible and quantifiable. Owning your destiny includes having decision-making clarity, including being specific about who owns the decision.
A transformation lead at a large company worked closely with his CEO to define working agreements before the consulting engagement started. The engagement was to help create an internal value stream mapping capability. Internal SMEs were assigned from the transformation lead team as well as the business and technology areas being initially mapped.
The CEO worked with other leaders to make this engagement a priority and made sure the internal team members had the capacity to engage as well as assign work to other team members to minimize distractions. The consultants operated as extensions of the internal teams. Often, no one even knew who worked for which organization. Clear knowledge transfer occurred with documentation to allow the internal teams to continue supporting the capability and training other teams.
Success became evident when the organization was able to scale from two maps to ten without any additional consulting engagements.
Call to Action
Stay the course with your approach. Keep the level of engagement high and continue to have a strong validation mechanism to ensure the health of the delivery stays as is.
Consultant Dependency (Bottom-Left Quadrant)
The consultant dependency quadrant represents organizations that have not been intentional about the ongoing support required for the capability once the consulting engagement ends, and the capability is critical to the company strategy. Being in this quadrant should cause your organization to stop immediately and rethink the engagement.
In the absence of doing that, the engagement will very likely fail and increase costs for the organization. There will be no clear transition plan, and often the organization will continue to engage consultants either from the original engagement or move to another consulting firm because they are “dissatisfied” with the results. Internal teams will have little to no understanding of the capability that was delivered. In some cases, this may be an acceptable quadrant to be in if you need consultant help for something that is not considered strategic (i.e., payroll processing).
A healthcare organization recognized a need to become more relevant within the digital ecosystem. They had no mobile presence at all. The CEO decided to bring in a consulting company she had worked with at her former organization.
She did not engage with any technology leaders and signed the agreement with no input from the broader leadership team. The consultants tried to deliver an iPhone app but continued to encounter impediments because they didn’t understand the broader technology stack and couldn’t get access to the information they needed.
After six months of frustration, the CEO brought in another consulting company in an attempt to “fix” what was wrong with the initial engagement.
Call to Action
Your first step should be to meet with the internal sponsor of the engagement to answer the question “What is the intent of the consulting engagement?” Don’t accept the answer until it is clearly outlined and connected to a clear customer or employee strategic outcome. Once that is clear, also confirm that internal SMEs (subject matter experts) have been assigned and that clear prioritization of the engagement has been set so the SMEs can participate in a meaningful way.
You May Outsource this Some Day (Bottom-Right Quadrant)
In this quadrant, organizations have a good plan for transitioning to their internal teams after the engagement but little to no internal SME assignment throughout the engagement. This will very likely lead to a gap in understanding when the consultants leave. In this quadrant, the capability is critical to the organization’s strategy, so leaving a gap may still require on-going dependency on consultants.
Upon completion of a consulting engagement to help accelerate adoption of CI/CD at a bank, the internal developer tools team met with the consultants for the official knowledge transfer session. For the most part, the team felt confident with the handoff and the documentation created by the consultants.
Six months later, however, the internal team hit a plateau with adoption of the pipeline. They realized that many teams were not adopting it because they felt it was “forced on them by consultants” and had many key feature gaps. Since the internal SMEs had not been involved during the engagement, the consultants had been unaware of these feature gaps. Ultimately, the organization had to bring the consultants back in to close the gaps.
Call to Action
Assign internal SMEs to the engagement. Make it a top priority, clearing other responsibilities off their plates so they don’t have to manage competing priorities. Set up a data-driven transition plan to ensure continuity. Continue to assess this capability; you may want to outsource it at some point, but you aren’t prepared to do that yet.
Consultant Has Business Control (Top-Left Quadrant)
The “consultant has business control” quadrant represents organizations with a critical capability need that is being delivered by the consultants. SMEs have been assigned to review and provide input during the engagement. However, there has been no explicit assignment of ongoing internal teams to support the capability after the engagement ends. There will still be a dependency on the consulting firm after the engagement and likely ongoing follow-up engagements to maintain support of the capability, further creating dependencies on the consultants.
A retail organization recognized the need for an internal AI/ML capability and decided to engage with a consulting company to bring in external expertise to accelerate building the capability. A project manager and one analytics resource were assigned to work with the consultants and provided on-going input.
Once the engagement was complete, the organization experienced a high-severity incident with the personalization engine the consultants had built. It took two days to restore service and required an emergency statement of work (SoW) with the consulting company to help restore service. The original consultants had already been assigned to new customer engagements, so the organization had to help the emergency consultants get up to speed, leading to the extended outage.
Call to Action
Plan in advance for a knowledge transfer and have an internal team ready to take ownership of the capability after the consultants leave. Make sure you have assigned SMEs to align with the consultants throughout the engagement.
Next, we’ll explore the Disruption of Change Quadrants.