
Good Consultants vs. Bad Consultants - jacquesm
http://jacquesmattheij.com/good-consultants-vs-bad-consultants
======
edw519
Why are there so many stupid ads on the internet? Because idiots keep clicking
on them.

Why are there so many "scamsultants". Because idiots keep hiring them.

Nice piece, Jacques. In my younger days, I would have wholeheartedly agreed
with you. (And I still agree with your major point: Don't do this!)

By now in my jaded older days, when I see so much clashing between the ideal
and what's really happening, I'm not so sure.

I've spent a career cleaning up the messes of scamsultants. And you know what
happens to them? They move on and make bigger messes. And more money for
themselves. Sometimes, a lot more.

In just the past 5 years:

\- My accountant fired his IT guy for fraud. When he told a half dozen of his
associates, _every single one_ of them asked for the IT guy's number because
they couldn't find anyone. They didn't care about the fraud.

\- A scamsultant for one of my customers ripped them off for over $2 million.
They decided not to sue him because of the bad publicity (and embarassment).
He now has a new company name, a new website, and one of his testimonials
(fake, of course) is from the company he just ripped off.

\- Another scamsultant convinced one of my enterprise customers to hire 80
more people into their IT department because "lack of resources" was their
biggest constraint. 2 years later, they fired most of those people (who came
from the scamsultant's own agency and couldn't do the job). The scamsultant is
now doing the same thing to 2 other enterprises in other parts of the country.

\- A scamsultant tried to split the commission with my co-founder on her side
hardware business. She told the customer who immediately fired the
scamsultant. I just saw him driving a new Mercedes SUV into another local
customer's parking lot.

\- A scamsultant set up the software to (believe it or not!) funnel every 5th
customer credit into his own bank account. It took the auditors 2 years to
unravel this. He was promptly fired, but never prosecuted (embarassment, I
presume). Now he's selling new e-commerce software to new suckers.

\- Another customer hired 20 .net programmers through a scamsultancy. After 2
years, they had produced nothing. They were all fired. I stayed in touched
with quite a few of them. They are all still working.

As long as people value money over ethics, this shit will always happen.

Don't do this, but don't be surprised when others do and get away with it.

~~~
Joeri
> As long as people value money over ethics, this shit will always happen.

Usually, it's a matter of short-term thinking. It is a human tendency to
discount long-term benefits against short-term costs. Where it's not, it's
because people want to be "nice" and not be the bad guy. They will go along
with people who don't mind being the bad guy.

And then there's my personal belief that in any given job role, a large
percentage (possibly the majority) of people are not competent. By competent I
mean that any situation which may arise as part of their job and involves a
professional decision can be handled by them in a competent way. Most people
aren't actually able to do their job without someone guiding them from above
and supervising them in that job. This applies also to the people hiring and
supervising them, which in the average case are not able to hire and supervise
competently without supervision. This chain continues all the way to the top
of a company, and as a result most companies are not actually able to do their
job competently without constant adjustment from their customers or
shareholders in the form of complaints, lawsuits, etc... That's probably why
many consultants are not competent, and why they still get hired, because the
people who hire them are not competent in hiring consultants. Never ascribe to
malice what can adequately be explained by incompetence.

------
spindritf
_that’s a separate brach of consultancy called ‘scamsultancy’_

There's a third branch, usually called something like strategic consulting.
This is where you hire a bunch of young people from good universities with
impressive resumes to tell your clients (executives at large companies) what
they already knew and want to hear so that they can in turn use it to justify
whatever they wanted to do before they even met you.

The world is not fair so this is the most lucrative branch. And you take no
hit to your reputation. Quite the opposite, you benefit from associating with
your high status clients.

Or maybe it is fair. It's pretty hard to get into that.

~~~
rittersport3
I used to be an associate for a major management consulting firm and your
assessment seems only "directionally correct", as we would put it. Certainly
there are little incentives for risk-taking - engagements run a couple of
millions for two months of a team of 3-4 people; who wants to "destroy value"
risking making one of the top executives unhappy? Nonetheless, there is a lot
of work that is actually pretty useful (and profitable for the clients),
specially on the least fuzzy projects (eg. "How can we improve our pricing?").

I'm not sure it is a matter of fairness or not, but there seems to be a real
"pain" that management consulting solves. In the most prestigious firms, it's
quite a better business than most. Low-competition, high-margins. We used to
call it a "revenue business": revenues are so much larger than expenses that
what the firm tries to optimize is the former, not the latter.

Also, does anyone knows a startup that is run like a firm? I find it a really
interesting model. I would love to know if anyone knows of one that does.

~~~
spindritf
The political obstacles are very real. Getting over them or overcoming inertia
is valuable. Just not in the sense of directly making clients money.

------
einrealist
I often see consultants (or entire teams) which are engaged, but are blocked
by the environment they were hired to work in. From another perspective, that
may look like that they are doing a bad job. They have to perform, because
they are 'the outsiders, the specialists', right? - Bad consultants may just
be a sign that your company is dysfunctional.

~~~
jacquesm
That's a good point, this does happen. But I think those cases are fairly rare
and give you an excellent opportunity to raise this issue with management as
soon as you become aware of it and then to move on if they do not wish to have
the situation improved. Otherwise you'll just end up harming your reputation
by trying to solve the unsolvable and ending up getting the blame for it.

Usually it will not take 10', 100's or even 1000's of hours to know which way
things will swing in the long run.

~~~
seivan
Not rare. We're not allowed to use certain tools and services for odd made up
reasons. These decisions are made by people that are incredibly distant from
the actual production.

An example is that we're not allowed to use crash-analytics tools but we are
however allowed to insert Google Analytics.

~~~
nawitus
Yup, I've also seen this happen pretty often. The problem with working as a
consultant is that it's difficult (or it's assumed you shouldn't) be in
contact with various 'decision makers' of the client. You can of course
suggest to the client many times that something is broken, but it rarely gets
fixed. Instead the fix is to create various workarounds time after time.

It's very irritating to see so much money lost.

------
pjmlp
Being in consultancy for a while, I find most big names are "making money off
the customers" while trying to sell the image that they "make money for the
customers".

I lost count how many tricks I saw being done in the name of such practices.

~~~
vidar
Can you name some?

~~~
psykovsky
He probably lost the names when he lost the count...

~~~
pjmlp
In a public forum I would just say, think of any top 10 multinational in the
consulting world, which also offers off-shoring as part of their services.

Any of them will do.

------
pasharayan
There's forgotten dimension being a good consultant and that's to only make
sales when you have the opportunity and ability to remain independent and be
able to provide recommendations that your clients might not want to hear, but
need to hear. Too often, consulting firms incentives are aligned to making the
sale and getting the next cheque that they'll be willing to compromise on
their recommendations and solutions in order to please a manager within their
clients - often whom have a specific thing they want to achieve which might be
unaligned to the overall client's best interests.

Because of this, consulting exists somewhat differently to startups as well.
In the startup world, your aim is to delight the customer. If you apply that
same principle, you'll be tempted to say things that make people happy. I'd
argue proper consultant or advisor in any field (whether IT consulting or
management consulting) must be able to make a judgement concerning their
expertise or their analysis regardless of what 'wants' to be heard by their
prospective client (in lieu of how much they might be paying them).

------
thaumaturgy
I'm having a little trouble with this one. I run a small shop (really really
small), we do a lot of troubleshooting and some maintenance and deployments
for customers. Maybe we don't qualify as "consultants", I dunno.

But we certainly don't make money for our customers. We save them money, we
eliminate some hassles and downtime, but that's not really the same thing.

So I'm open to hearing that we're doing it wrong, but I don't know what doing
it right would be, especially since we aren't really getting rich, and we've
got a bunch of customers that have been with us for years. I'd like to change
the way the business works at the beginning of next year, so now'd be a great
time to start figuring out how to do it right.

~~~
mcintyre1994
From the article: "you should be trying to save your customer money, which is
the same as making money for them"

I don't see how what you're doing isn't the same as making customers money.
You save them money, all else equal they make more profit, that's what
matters. Plus the fact your customers choose to stay with you suggests they
feel they're getting positive value and not being taken for a ride.

If saving money isn't materially the same as making money, and maximising
revenue is seen as the only way to create value, that sounds ridiculously 1
dimensional and like terrible business to me.

~~~
jacques_chester
You're arithmetically correct, but in practice new revenue is seen as more
interesting than reducing expenses.

------
dschiptsov
Why, "good" doctors, advocates, coaches, consultants are very good at telling
to clients what they want to hear. "Bad" consultants are trying to "tell the
truth" (at least as they perceive it) and this, especially in cases of doctors
and advocates, newer do them any good.

Telling that Java is a wonderful thing ( _safe_ , mature and _standard_ , so
no one would blame you) would make you a "good" consultant. Telling that it is
mere "piles upon piles of crap" wrapped in tons of BS (written by "good"
experts) would never give you any good. I have tried.

There are SAP consultants also. These are just salesmen on commission. All
lies and manipulations are good as long as it help to sell.

~~~
personZ
Your Java example seriously undermine your point -- you have set up a world
where you have an opinion, and thus your opinion is the "truth", and people
who believe otherwise are being fooled by liars.

~~~
dschiptsov
There is an opinion, shared by many marginals (Rob Pike, PG, Joe Armstrong,
you name them) that Java, as they put it to remain polite and socially
correct, has lots of serious issues, or, in my own wording - the biggest scam
in the history of IT business (in terms of waste of paper, human and hardware
resources) and the consequences are still to come.

But you are right, my example is a little bit irrelevant. SAP would be better
one.

~~~
jacques_chester
Java was intended to allow median programmers to build large systems, largely
by removing a lot of sharp edges.

In that regard it has been fantastically successful.

~~~
beagle3
> allow median programmers to build large systems

> In that regard it has been fantastically successful.

It allows median programmers to work for years on large systems, yes, and
usually to maintain them as well. That indeed has been my experience.

However, in my experience, it is not those median programmers that actually
_built_ those systems, and wouldn't have been able to. Much better skilled
individuals did.

In my experience, large systems built by mostly median programmers tend to
fail (or never even reach production status), regardless of the implementation
language. Which is to be expected, since system complexity is often inherent.
However, it seems like the idea that "all programmers are just replaceable
cogs" and thus that's not the case is way more prevalent around Java (and to
some extent .net) than around other ecosystems.

Java has been fantastically successful in the sense of keeping armies of
programmers employed maintaining large systems, and at keeping those systems
running. Personally, I suspect that most of those cases could have been
fantastically more successful if they didn't use the "replaceable cog" model
that for many projects is Java's core feature - but of course I cannot offer
any proof.

~~~
dschiptsov
Yeah, let's say that "Java creates jobs", which is not the same as "Java
solves problems".

------
emsy
There is even a TV show which, among other things, depicts the tricks of bad
consultants. It's called House of Lies and is based on the eponymous book.

------
datashovel
I think there's also the rare case of "bad things happen to good people". I've
been lucky as a consultant, that I have had a handful of long-term clients.
We've learned how one another work, and how to communicate our expectations.

Alot of web-development consultancies however, as far as I can tell (primarily
the culprits I think), are run by business-minded people who are great at
marketing and advertising and networking, but don't understand how to get the
right kind of talent in the door. They get the lucrative deals, but have no
idea that they don't have the talent on board to make it happen. I've "cleaned
up" on a few of these in the past.

Also, there's people like me who start their consultancies without as much
business-sense as tech-knowledge, and so you learn quickly what your limits
are and to not over promise and under-deliver. An iterative approach helps
ensure your mistakes are minimal and generally not impactful in a negative way
on the overall project.

Finally there are (yes they are rare, but they do exist) overbearing clients
who manage their people and their consultants like it's a sweatshop. Generally
speaking I find that it's hard to extract a perfect set of requirements out of
a client when in the early stages. I find that an iterative approach is best
suited for clients, thus the full picture is not completely understood when
the project begins. Most of the time the client appreciates this lean / scrum-
like approach, and so it helps me extract requirements throughout the life of
the project. The overbearing client, however, sees this as a window of
opportunity to take advantage by increasing scope, or changing directions
completely, and in some magical way think they'll be able to squeeze you for
your time and expertise to get a bargain basement deal. I have an at-will
clause in my contracts for exactly this type of client.

~~~
quicksilver03
I have recently met one example of this type of client, it was so damaging to
my company that the owners ended up selling it. If you could you give an
example of this at-will clause I'll try to have it included in future
contracts.

~~~
datashovel
IANAL so I would be remiss to provide legal advice here :)

------
bshimmin
Good article. However, I wonder about the "IT is a small world" bit. If you're
a huge organisation of consultants and your organisation develops a reputation
for doing a terrible job at great expense, I'm sure that's bad and word will
quickly get round. If you're just a couple of guys - a micro-consultancy - or
even a one-man band, does the same really apply? I say this mainly because I'm
a one-man consultancy myself (in some sense, at least), and a bunch of the
other people commenting are similarly positioned.

I was working recently with a hiring manager at a digital agency in London,
sifting through some CVs to help them find another contract developer. One of
the CVs was of a guy I'd worked with a couple of years before; I said, "Ah, I
know this guy. His work was decent enough, within reason, but his attitude was
quite problematic and he was pretty aggravating - I don't think they
terminated him early, but it was a close call." I pointed out that his CV in
the two years since I'd worked with him bore evidence of that attitude - lots
of very short contracts which plainly hadn't been extended. The hiring manager
put his CV in the reject pile, unread, on the strength of my non-
recommendation.

There are over a hundred digital agencies in London, though - and that guy
isn't going to have worked at enough of them, throughout his entire career,
that his bad reputation would really precede him at every one. In fact, he
could do a three month stint at half of them and that would still be a good
chunk of a career. Or he could move to a different branch of the industry
(finance, let's say) where he wouldn't have any reputation at all.

So, I wonder, is IT really a small world? Does an individual's reputation
really matter that much? It's certainly helpful having a good reputation for
all the obvious reasons - but does it really hurt you that much to have a bad
one?

------
cheez
There are also customers who have a tendency to not accurately value projects.

For example, if you are making revenue of $1mill/year, and a "IT specialist"
consultant convinces you (legitimately) that they could increase that by X% or
give you X% in savings, then how much is that person worth to you? Certainly
some non-trivial fraction of X%. But often there are people who don't do this
math and are confined to thinking of consultants as labourers and then they
try to drive it on price.

They are not stupid people, but if you step back and take a look at the
company, you can see who is holding it back.

------
hackerboos
I rubbed shoulders with a consultant that used to do real estate contracts
with large supermarkets here in the UK.

Sometimes they would win contracts by basically bribing the hiring team with
cash incentives. Once he told me that one of the these guys asked for the
money for cash when they were out entertaining at a strip club. He wanted the
money there and then for girls and coke.

It's worth bearing in mind that some of these kickbacks might be going to
employees in your own company.

------
evansibok
If only employers put in a few more minutes researching potential hires, they
would save themselves the stress of having wasted a ton valuable resources on
these dumb weights. Good consultants can mean massive growth just as bad
consultants can mean massive decline in fortunes.

~~~
jacquesm
Absolutely true, the customers do carry significant responsibility as well.

~~~
evansibok
True! Everyone has a part to play.

------
gabemart
What about the situation where a firm hires consultants expressly to do
something that will not make them money? To complete a project that is simply
not in the best interests of that firm?

~~~
300bps
That is why we need a companion post entitled "Good Customers vs Bad
Customers". I work full time at an investment bank and about 15 hours per week
on the side doing consulting. I've done side work now for almost four years
for one guy. He pays me 1/4 what I make in my full time job and gives me 10x
the hassle. I've done multiple projects for him where the payback period is 2
months and the NPV is 6 figures. He takes it for granted at this point. I'm
slowly steering him to value based pricing for that reason.

Every once in a while though he sets me on a ridiculous project that is the
financial equivalent of digging a hole and filling it back up again. I see pet
projects like this all the time at the bank. At least there, it isn't
impacting people's personal bottom line. This guy's motives for them, I don't
understand at all.

~~~
oz
>He pays me 1/4 what I make in my full time job and gives me 10x the hassle.

Why do you still accept work from him?

------
personZ
I run a small consultancy (myself, though I engage peers whose work I respect
as subcontractors for larger jobs), and the #1 issue I've faced are company
representatives who look for consultants to make them, _personally_ ,
rewarded: Their concern is primarily their own personal benefit, not the
benefit to the company. Whether it's professional sports tickets, expensive
dinners and lunches (which sound small in the small, but when you have a
company representative who schedules regular "status meetings" during
lunch/dinner, you know where it's going), and so on, it is an industry
absolutely dominated by kickbacks, the whole notion of which feels dirty and
fraudulent.

------
kalleth
"Don't commit fraud"

Next.

