Exploring the Role of Consultants: Are They Truly Change Agents or Just Advisors?

Dear members, On one of the WA groups of HR, the Administrator of the group, Mr. Rajaram Thorve, raised a topic for discussion. The topic was the role of consultants. He posed the following questions:

Is consulting a more lucrative profession than working as a full-time professional in an organization?

Reply: - Being a consultant need not be lucrative per se. There is a limit to their earnings. Today, senior management professionals in India earn anything between Rs 25L to Rs 1 Cr. How many consultants earn that kind of profit is a matter of debate. If they have that capacity to earn, they do not remain consultants and start their own company. Secondly, many enter the consulting profession after retirement. Nevertheless, they may not have the zeal to grow, considering it just a "time-pass" activity. Others may start consulting before retirement, but there could be other reasons. In some cases, individuals become unemployed mid-career and, to hide their unemployment, they become consultants.

Are consultants working as change agents for organizational development?

Reply: - To answer, it merits clarification on the role of consultants. Consultants are Subject Matter Experts (SMEs). Due to their past tenure in various companies, especially MNCs, they acquire unique knowledge and skills. Once they feel they are no longer required to do regular work, they share their knowledge for a fee. A consultant's role is advisory. They themselves cannot be change agents per se. A change agent has to be someone from the organization, especially the CEO.

Can consultants work as authorized signatories to sign cheques and documents of the organization?

Reply: - Consultants work externally. Therefore, generally, organizations do not authorize them to sign important documents or financial instruments like cheques. Unless there are vested interests, consultants are not empowered to be authorized signatories.

Why aren't consultants held responsible for executing any strategic plan or process to achieve desired results or for the failure of any project or financial mess?

Reply: - Consultants can help in preparing the strategic plan, but execution is always the responsibility of the CEO or MD. What if there is a mismatch between the actual strategic plan and its execution? Why should the consultant be held responsible?

Thanks,
Dinesh Divekar

Let me try to add my thoughts following the elaborate detailing done by Mr. Dinesh Divekar.

Consultant's Job Profile vs. Regular Employee

1.0 A consultant's job profile is different from a regular employee in many ways. The hours of work and responsibility levels are also different. We can also call it a case of pay disparity according to the role played by both.

Role and Impact of Consultants

2.0 Consultants are employed to make improvements or create developments. We can say they are enablers or instrumental in doing certain things. The use of external expertise for internal gains by the organization is one way of describing it.

Authorized Signatory Limitations

3.0 An authorized signatory is supposed to represent his company. The client and consultant have their own companies, and hence the consultant cannot sign any instrument for the client's company.

Advisory Role of Consultants

4.0 A consultant's role is advisory. If a student fails, the teacher cannot be held responsible (save for exceptions). It is up to the client to consider all or part of the suggestions made by the consultant. Implementation is invariably the client's purview. How well it is done is also a moot point. Once the client accepts the consultant's view, the responsibility becomes his. Many consultants sign a contract where the limitations of their role and liability are clearly mentioned.

V. Raghunathan
Chennai

Dinesh Divekar and Raghunathan have given adequate answers to questions 2, 3, and 4. The answer to Q1 depends on how one defines a consultant. For example, there are a large number of consultancy firms that employ consultants who are hired out. Hence, whether these consultants get paid more than what an organization's employee receives depends on the company and the level at which the person works.

Dear Mr. Divekar, your reply to your questioner is well set, relevant, and appropriate. Some of my views are given.

Submission 1: Qualities of a Consultant

To be a consultant requires unique qualities, i.e., subject knowledge and communication skills, both verbal and written. Even if the quality of knowledge and communication skills is not all, one should have the courage to stand alone, have wide contacts, and be known in the sphere. Moreover, there is no fixed earning but they are self-content. Consultancy and service are two different aspects, where a consultant can turn to a service holder but it is difficult for a service holder to turn consultant.

Submission 2: Role of Change Agent

The change agent role is taken by the employee, not by the consultant. The consultant can only guide if consulted over matters of change and confusion.

Submission 3: Signing Authority

The consultant cannot be a signing authority for the company as an outsider. In other cases, if a consultant’s agency has been appointed or work is sublet to act as to deal with bill processing and make payments on behalf of the client.

Submission 4: Responsibility of Consultants

The consultant can be held responsible where one undertakes the execution and key results. It depends upon the nature of work clients upload with the consultant. Is a legal consultant held responsible for court cases? The answer is always “No.”