G&L Leadership Reflections - External Consultants - Paul Kuiken

With Shakespeare’s birthday occurring today, April 23, we draw on his famous soliloquy from Hamlet. 

The famous nunnery scene where Hamlet is torn between perception and reality of the situation has him seemingly deal with differing perspectives in his mind, in this case, life and death. 

Leaders in their respective life science fields face similar dilemmas (perhaps less dramatic?!) with complex problems in their organizations, involving the decision to use external support to solve them. There is much personal and professional capital invested in significant change initiatives, so laying a basis for success is a huge motivator.

The purpose of this article is to examine the reasons for and against employing external support for organizational issues and to consider some of the questions a leader should ask ahead of an engagement.

The case for using external management consultants?

There are many occasions or reasons for considering the use of external management consultants for programs or projects. As most of these are project-based the unique circumstances under which these operate must be considered on their own merits.

Well-selected external consultants possess specific skills, knowledge, and experience in functions, disciplines, or industries that may not be available within the organization. A deep understanding of the domain is key here, especially to drive practical insight, best practices, and innovative solutions in what may be perceived to be a niche subject area. This is immensely beneficial to address complex challenges or opportunities.

External consultants provide an unbiased and objective perspective on organizational issues, free from internal politics, biases, or preconceptions. With a fresh pair of eyes, challenge established thinking, and identify potential blind spots or opportunities that internal teams may overlook. This overcomes the “we’ve always done it like that” syndrome.

External consultants should provide flexibility and scalable resources, allowing organizations to access expertise and resources on demand without a long-term commitment. The ability to be engaged for defined periods removes the need for a permanent headcount. A short-term ramp-up in consulting support can provide a catalyst for change or give momentum to a given initiative. The consultant resources can often fill knowledge or capacity gaps in the client organization in the short or long term.

As a result of the above and being dedicated to a project or program, consultants accelerate project timelines and deliver results more quickly than internal teams, leveraging expertise, methodologies, and resources. This helps leaders and organizations conquer resource constraints, avoid project delays, and achieve faster measurable outcomes.

Consultants have extensive networks, relationships, and access to resources that can benefit the client leadership and organization. Introductions to key stakeholders, industry experts, or potential partners can be offered and provide intangible benefits over and above project deliverables.

In our experience, consultants maintain confidentiality and discretion in handling sensitive information and proprietary data. A slip in this area means trust is significantly eroded and will is critical to professional reputation. Therefore, as consultants we adhere to high professional standards and ethics to protect client confidentiality and maintain trust and integrity.

We have helped client organizations navigate complex regulatory requirements, compliance risks, and/or legal issues. This offering helps leaders manage and mitigate risk, product governance, and regulatory manufacturing/labeling compliance, to maintain their organization’s reputational integrity.

Consulting support helps manage change through frameworks, methodologies, and change management expertise to facilitate change readiness and smooth transition, resulting in conditions for success.

What are common negative perceptions of using management consultants?

In developing the G&L Advisory Practice we drew on client input relating to their negative experiences as well as the positives. The following points are those which resonate with the majority of leaders we spoke to.

A big concern we have heard from our clients is a lack of understanding of the client's business. We have heard numerous stories of frustration with consultants presenting themselves without an existing understanding of their business, industry, or unique challenges. Additionally, clients tell us they have experienced consultants lacking industry knowledge who fail to grasp the client's context and so provide generic or impractical solutions that do not address the client's specific needs or realities.

A lack of understanding not only applies to the client’s own business but the changing nature of its corporate objectives and environment. This is something that generic management consulting often lacks, particularly with regulation and guidance changes. Proactive engagement by experienced/knowledgeable consultants during a multi-year cycle (as part of transformation, or continual improvement) is critical to success in accounting for shifts in regulations, business/scientific strategies (e.g., EU-CTR, the prevalence of M&A deals, pure-play Pharma strategy, or new modalities with unclear regulatory paths, etc.). Clients bemoaned significant legislative events being overlooked in the period by which a transformation plan has been outlined, rendering consulting advice redundant or irrelevant. The need for specific domain expertise during these programs is a desirable requirement from those we have spoken to.

Frameworks and methodologies provide an element of structure for projects and programs, but clients tell us they have experienced consultants relying too heavily on standardized frameworks, methodologies, or templates, leading to cookie-cutter solutions that do not fit the unique situation. Such a one-size-fits-all approach overlooks nuances and complexities of the client's business, particularly in niche disciplines such as regulatory affairs, resulting in unworkable solutions. Traditional consulting companies are unlikely to be involved with implementing such solutions without the detailed required knowledge and so this exacerbates the cost/value negativity picture.

Resistance to change or organization design initiatives can be exaggerated through the use of external consultants. With perceptions or direct experience of external consultants lacking experience in the specific domain internal stakeholders, such as employees, managers, or executives, can feel threatened or marginalized. We have had the experience of internal stakeholders taking a resistance stance against the use of external help until they realize the consultants have credible experience in regulatory affairs and quality assurance. This professional rapport, respect, and trust are vital to building buy-in and support. Otherwise, resistance prevails that impedes progress and implementation.

One of the perceptions we have heard about using traditional management consultant brands is the high cost associated with their services. Consultants typically charge significantly higher hourly rates or project fees compared with routine regulatory or quality contracts which can be perceived as expensive, particularly if the cost outweighs the actual value delivered or if results are not achieved as expected.

Our clients have expressed concerns about consultants they have used in the past and perceived conflicts of interest or having hidden agendas that have undermined the objectivity and integrity of their advice. This can include consultants who have financial ties to vendors, and suppliers, or who prioritize their interests over those of the client, which may erode trust and credibility in the consulting relationship. At G&L, we have taken the view of allowing the quality of the work and trusted relationships to be the primary markers of being asked back to support our clients. Top of Form

What are some of the other considerations for organization change projects using internal staff versus external consultants?

Making organization design changes using internal staff versus bringing in external consultants each has its own set of arguments and considerations. Here are some key arguments for both approaches:

Internal staff have a deep understanding of the organization's culture, history, processes, and dynamics. They are familiar with the organization's strengths, weaknesses, opportunities, and threats, which can facilitate the design and implementation of organization changes that are tailored to the organization's unique context, culture, values, and norms. In our experience, this is a double-edged sword. On one hand, this depth of knowledge is invaluable to assessing change, but on the other has inherent bias and subjectivity attached to it. There may also be institutionalized thinking which can hamper innovation. We have seen instances of the illusion that a particular organization is industry-leading when an objective view with benchmarking data would suggest otherwise.

Internal staff for organization design changes can be more cost-effective compared to hiring external consultants as they are already on the payroll. There are no additional consulting fees or expenses associated with external consultants. Internal staff have to be redeployed to such projects which would require backfilling or a degree of part-time application. There is a hidden cost associated with either scenario so the on-paper perception of cost savings versus external support should be carefully considered.

Furthermore, utilizing internal staff in organization design change has the potential to present a sense of ownership, commitment, and accountability among employees. By definition, internal staff have a vested interest in the success of the organization and are more likely to be personally invested in the outcomes of the changes they help implement. There are a variety of ways of achieving a sense of ownership regardless of whether internal or external support drives change. We have found that actively seeking support to programs through qualitative/quantitative data gathering, seeking validation of conclusions, and addressing concerns are examples of how to achieve the same aim.

Engaging internal staff in organization design projects can provide an opportunity for knowledge transfer and capability building within the organization if this is required. Employees can learn new skills, gain valuable experience, and develop competencies in change management, leadership, and organizational development that can benefit the organization in the long term. This is, of course, if the capabilities and resources are required for the organization's competitive advantage in the medium to long term. If not, then the use of external consultants to achieve organizational objectives would seem more appropriate.

External consultants bring specialized skills, knowledge, and experience specifically in organization design, change management, and transformation relative to the domain that may not be available internally. This is especially valuable when offering fresh perspectives, best practices, and innovative solutions to address complex organizational challenges and opportunities.

Objectivity and an impartial perspective on organization design changes are critical to analyze, make recommendations, and deliver change that is free from internal biases, politics, or preconceptions. Objectivity offers honest feedback, challenges conventional thinking, and provides independent assessment and recommendations based on evidence and analysis.

External support accelerates the pace of organization design changes and delivers results more quickly than internal staff. They bring expertise, methodologies, and resources that enable them to execute projects efficiently, overcome obstacles, and achieve desired outcomes within compressed timelines.

Concluding remarks

The decision to deliver programs and projects, such as organization design changes, using internal staff versus bringing in external consultants depends on a range of factors such as the organization's specific needs, capabilities, resources, and constraints. Differing approaches offer advantages and considerations that a leader must carefully consider and evaluate to determine the most appropriate course of action for achieving their organization's goals and objectives. The implications of failure may be personally felt as well as by the organization.

As a summary of the points examined herein, external consultants provide valuable expertise, objectivity, and support to organizations across a range of projects, initiatives, and challenges. These external resources can be used to leverage domain-specific and specialized skills, accelerate results, and achieve project goals more efficiently.

While external management consultants provide valuable resources, we have heard negative feedback on the traditional management consultancy industry such as the actual achieved value, generic/templated models presented, and lack of domain-specific knowledge relating to their clients.

Before starting the G&L Advisory Practice back in 2021, these anecdotes and client feedback formed the basis of the (then) new G&L business service to address and remove the negatives and leverage the positives. In our journey so far, the feedback has been positive resulting in significant success for our clients. The main positives lie in the ability of G&L to understand the intricacies of regulatory affairs and quality assurance from practical experience, the knowledge of delivering services that our clients are managing on a day-to-day basis, and to share risk with clients to achieve the outcomes desired at the outset of such initiatives.

Taking this all into consideration, the broader, mainstream, management consulting industry is at an interesting inflection point. News of downsizing, revenue forecast drops, and hiring freezes in the industry are rare bad news stories that were previously unheard of in the consulting industry that enjoyed a long run of financial success. Client organizations are now taking a revised view of what to seek input on and whether or (more often) not to bring in external help at all. This is built on many perceptions and misconceptions of management consulting companies that exist through direct anecdotal experiences of life science leaders. At G&L we remain confident that our approach and expertise provide something different in the marketplace and that our clients benefit from the Advisory Services provided.

Your perspective?

Would you agree or disagree with any of these points made herein? Would you be able to offer additional insight? Are there any practices you have used to get the best out of the use of external or internal support? Let us know in the comments below.

Footnotes

Within the G&L Insight Advisory Practice, we believe a fundamental understanding of the business of Regulatory Affairs provides a basis for understanding the client’s business and where there is an opportunity for return on investment in digital tool enablement. We are not aligned to a set of technologies or solutions and, as a result, provide a bespoke service for every client we work with. And, as seasoned Regulatory Affairs industry experts, we have the benefit of a wide range of experience in different settings and will undertake a deep analysis of your situation to determine an individual roadmap solution for your company and your business transformation projects.

This is a far better basis for profound improvement within the client organizations we partner with. This is not just our view, but client case studies demonstrate significant financial efficiencies.

For further information visit our website www.gandlhealth.com or contact us here.

Our service listing includes:

• Assessing and implementing purpose, strategy, and objectives – aligned with the corporation and to develop your function
• Ground-up (or ‘zero-based’) design
• Future-proofing your organization – Gap and risk analysis, planning, and implementation, including digital preparedness
• Accompanying change programs
• Customer experience, service design, and value-demonstration
• Service delivery – quality and cost objectives
• Strategic resource deployment and sourcing
• Process simplification, and excellence programs (lean, and six sigma)

Paul Kuiken is Vice President of Advisory Practice at G&L Healthcare Advisors.