3 Reasons Why Consulting Is Not a Place to Cut Your Teeth on Something New For an Executive
Consulting is not always the best first option for an executive
I recently had a discussion with an independent executive who had been doing interim executive and management consulting work. The conversation has stuck with me not because it was unique but the opposite.
To date, the executive has enjoyed a successful career in a specific industry and is looking to take on his first role as Chief Executive Officer (CEO). His thought process was to take some time and work as an interim in CEO roles to get experience and end up securing a full-time CEO role. He conveyed his desire to ‘cut his teeth’ on interim roles to get the experience needed for the next position he wanted. My intention in sharing this is not say it’s wrong or that he won’t be successful, but rather to share my thoughts on this commentary since it is not unique.
Again, this is not the first time I have heard this and seems to be a growing perception. I have placed hundreds of interim executives and management consultants. I have seen every part of the process and experienced the good, the bad, the ugly as well as the tremendously successful. Though the thought process is a logical one from the perspective of the executive, it can easily be challenged when you factor in the client hiring the interim executive or management consultant. Here’s why:
Experience & Expertise in an executive
Yes, it can be argued by any long term executive that they can leverage their expertise in one area and step into just about any situation. However, is this in the best interest of the client? As a business owner, if I am bringing in an outside resource I want to bring in the best resource for my situation. The individual should have the hands-on experience and as needed, the expertise, to address my needs and any twist and turns that may arise. I do agree that experience and expertise can be leveraged into new situations but it is a slippery slope.
Not paying you to learn
Companies are bringing in an interim executive or management consultant to speed up a process, avoid lessons learned or bridge a knowledge gap. Because of the potential savings and/or gains, companies are willing to pay a premium as directly compared to what they are paying one of their internal executives on an hourly or daily basis. When paying a premium, no one wants to pay to have someone learn on the job. As a business leader, I want the individual to have been in this situation many times before and know exactly what to do. I want to know the secret short cuts and pathways, with no wasted time going down the wrong road.
Consulting is about minimizing risks
Because an experienced executive has been in my situation before and is able to successfully navigate through it, I am minimizing my risks involved. The more I consider someone who has only had similar experiences or has done some great things, just not this situation, I am increasing my risks and negating the reason I am bringing in an outside resource.
So how does an executive get experience with something new?
In the case of the executive above, I would recommend to keep the interim or consulting roles consistent with his industry background and types of situations he has been in and apply them to smaller companies. For example, if he had been a Vice President of a $100 million company, focus on companies that are $20 million on want to grow to $100 million. These are all elements and situations he is familiar with and can lend decades of experience to in a slightly different role as CEO.
Companies are often challenged with finding the right talent for a role within their budget. An executive who was paid a base compensation of $400k as a Vice President of a $100 million company and is looking to be take on their first CEO role, may consider taking $250 or $300k in a $20 million company coupled with a larger performance bonus. This minimizes the risk on the part of the company and the executive has a big upside opportunity both with a new challenging role never done before and desired pay when they are successful.
When considering your executive goals, be sure to step back and look at it from the company’s perspective as well. Focusing on the value and benefit to the company balanced with your goals will help you find the right solution in the end.