Compensation consulting is an odd profession. Companies hire consultants for all sorts of reasons. Some are looking for greater bandwidth. Others are looking for more extensive expertise. Some are checking a box on their “best practices” list. Others are truly looking for the guidance needed to solve a current problem or avoid one in the future. And there are those companies who are looking to get the answer they want, and only the answer they want. Knowing which of these companies you work for is a key to your consulting success.
Consultants, like a person’s horned and haloed conscience speaking into either ear in cartoons, usually pick a shoulder to sit on and stick to it. Some focus on doing what clients need, while others choose the shoulder of doing what clients want. Each shoulder provides different types of risks and rewards. The shoulder your consultant chooses is likely to be the reason you choose them.
Before we get into the details it is important to note that consultants cannot make the company do anything. A consultant simply provides information and the experience on how they feel that information can best be used. The final decisions and actions are up to the company or its Board of Directors. This is exactly how things should work. A company must have the autonomy to make the final choices. A good consultant contributes to whether the company understands if they are making a good choice.
Giving people what they want is the path of least resistance. Just like some parents choose to be the “party house” where high school kids can get together and drink while underage, some consultants will support almost anything. Being a cool parent usually leads to happy kids and popularity. Occasionally it leads to something more tragic. Consultants who choose this shoulder are often highly sought after. They make executives rich and allow HR professionals to defend virtually any decision. But the risks are real.
Many consultants provide a more authentic answer to any project deliverable. This can put them at odds with the people who hired them. Unlike the parent who will let their kids use the car to go to the party house, consultants can only point out the risks of partying and driving and hope that the message is heeded.
Here are some good considerations when you are hiring a consultant.
- Are you looking for guidance or agreement?
- Do you want a consultant to provide recommendations on what you want, or what you need?
- Have you discussed this topic internally, to ensure that the consultant’s recommendations will be supported as recommendations move up the approval chain?
- Have you been absolutely clear about the objective for the project? Some clients will take any work. Some will only take work that fits their own approach.
With these questions properly framed and answered you are likely to have a successful consulting relationship. Too often an HR or Compensation leader sees something wrong and brings in a consultant to “prove” this wrongness to people who do not want to hear about it. Make sure your stakeholders are on board with your plan before you bring the consultant in the door. The best consultant in the world cannot change things that leadership is unwilling to change. Getting stakeholder buy-in is the secret to less frustrating and more successful consulting engagements.
It is critically important to note that many consultants have convinced themselves that they are always sitting on the right shoulder. Defining your project and making sure you have the correct stakeholder support are the most effective method for ensuring you get the right guidance from any consultant.
Dan Walter is a CECP, CEP, and Fellow of Global Equity (FGE). He works as Managing Consultant for FutureSense. Dan is also a leading expert on incentive plans and equity compensation issues. He has written several industry resources including a resource dedicated to Performance-Based Equity Compensation. He has co-authored ”Everything You Do In Compensation is Communication”, “The Decision Makers Guide to Equity Compensation”, “Equity Alternatives” and other books. Connect with Dan on LinkedIn. Or follow him on Twitter at @DanFutureSense.
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