Several times in my career, I hired a consultant to help me fix or expand my business. And I wasn’t happy with a single one of them. For a while, I figured I was hiring the wrong people. Now I have a different perspective: As a rule, consultancy doesn’t work. But there are two useful exceptions. I’ll tell you about those exceptions in a moment. But first, let me get this theory (of why consultancy doesn’t work) off my chest.

To successfully change something, you need three essential things: understanding, intention, and action:

1. You need to recognize the problem and understand its primary causes.

2. You have to have a firm resolve to make the changes necessary to fix the problem.

3. You have to be ready, able, and willing to take action.

When I think back on the consultants my partners and I hired (and then fired) over the years, I realize that they were all pretty good at understanding our problems – and even making suggestions about what to do about them. In each case, it usually took a good deal of our time and money to get to that point… but when they finally sat us down for the big pow-wow, they would have correctly identified some big mistake we were making. How did we know they had it right? Easy. We knew what we were doing wrong all along!

That’s one big problem with consultants. If they are really good (read “very well trained and very expensive”), they will tell you something you already know. (If they are not good, they will tell you something you didn’t know. Most times, that means they are dead wrong.) And when this happens, you are left with the following thought: “We paid $50,000 for that?” The consultants don’t feel that way. They spent a lot of time interviewing your key employees (interfering with their work) and figuring out what you were doing wrong. And you can’t blame them for doing that.

Despite their expert knowledge of business structure or marketing or whatever, they don’t begin with any “inside” knowledge of your company. In order to arrive at something really useful to say to you, they’ve got to dig deep. I used to say that the money I spent on consultants was well spent because I needed to be told what I already knew. Without hearing it from someone else’s mouth, I wouldn’t have made the changes that were necessary. I used to say that – but it wasn’t true.

The truth is, before the consultants ever darkened our doors, my partners and I had already recognized our problems, resolved to do something about them, and begun to take action. Hiring those consultants was part of our action – just an expensive and ultimately useless part of it. The point I’m getting at is that consultancy doesn’t work because consultants can only accomplish one-third of the process needed for change. They can recognize a problem and understand its causes. But they cannot resolve to do anything about it. And they cannot take action. I was reminded of this very recently with the development project I’m working on in Latin America.

I brought in consultants to help me fix some problems we are having with the hotel and restaurant. The guys I hired, longtime friends, identified every important problem and made specific suggestions about how to solve them. So far, so good. The problem has been getting those suggestions acted upon. That’s because we don’t have anybody in place who can take it upon himself to make the necessary changes… and do it.

If I could get these consultants to move down there for six months and take over, everything would start running like clockwork. But they can’t do that. So I’m left with a stack of sound analyses and good recommendations – and nobody really good to carry them out. So I’ve got to find that person. And when I do, I know what will happen.

He’ll look at that stack of recommendations and say, “Gee, I could have told you that.” OK, now you know why I believe consultancy almost never works. Here are the two exceptions I mentioned earlier:

1. Technical Analysts Sometimes, you need a technical consultant to tell you something that you are not capable of figuring out by yourself. For example, in this development I’m talking about, we have a problem with water. We need to know exactly how much water we can safely get out of which parts of the property so that we can drill the wells we need without screwing anything up. To get it done properly, we need a trained hydrologist. So that’s one exception to the no-consultants rule: non-essential technical analysis.

By saying “non-essential,” I don’t mean to imply that I’m talking about things that are not important. Obviously, water is critically important to the success of this project. But knowledge about how to find that water is not essential to its success. It’s not something that we, as developers, need to know. Knowing how to create a desirable community and sell lots – now, that’s essential. And we know how to do that.

2. Freelance Experts Some consultants are really self-employed experts in their field. Instead of working for a company, they work for themselves according to a schedule that makes sense to all concerned. They have the freedom of and get paid as consultants – but they essentially act as executives. In other words, they have the ability to not only analyze the problem but also make resolutions and take action. (I have employed many people in this sort of role, including many former employees.

And, in fact, we developed our American Consultants League program to help people turn their expertise in a particular subject into this new career.) This is a perfect solution if you can get the kind of expertise your company needs in order to take off by hiring a freelance copywriter, accountant, lawyer, product buyer – the list is almost endless. The key is to give the consultant the authority and capacity to create the change you need.

[Ed. Note: Mark Morgan Ford was the creator of Early To Rise. In 2011, Mark retired from ETR and now writes the Palm Beach Letter. His advice, in our opinion, continues to get better and better with every essay, particularly in the controversial ones we have shared today. We encourage you to read everything you can that has been written by Mark.]

Mark Morgan Ford

Mark Morgan Ford was the creator of Early To Rise. In 2011, Mark retired from ETR and now writes the Wealth Builders Club. His advice, in our opinion, continues to get better and better with every essay, particularly in the controversial ones we have shared today. We encourage you to read everything you can that has been written by Mark.