I was reflecting on John Groarke’s 5 roles of a consultant (here) and my own experiences in M&A and technology consulting, and I’ve got a couple of additions to the list. Maybe you’ve seen some of these in action?
John’s original 5 roles are:
My own experience suggests 2 additional roles:
A consultant can bring valuable contacts and connections with 3rd parties. Much of M&A consulting is about bringing buyers to the table, but more common examples include knowing or finding service providers to provide unique, specialist or high-quality products or services. It may be connecting staff with mentors or other consultants or referring clients to other productive relationships. Creative finance solutions are also often driven by ‘knowing the right people.’
This role covers many ‘weird and wonderful’ tasks that tend to be specialised, unusual and outside of an organisation’s business-as-usual capability. Some things need to be handled by an independent 3rd party for additional confidentiality, like no-names acquisition approaches or investigation of potential governance violations. Preliminary investigations of new markets or other specialist areas can often be done more quickly outside of the organisational hierarchy, for example. Settling disputes and opening sensitive discussions can also be handled more easily with a degree of independence that external consultants can provide.
John also highlighted that, in addition to the 5 standalone roles, consultants often act in combinations of these roles, including:
- Expert & Mentor
- Expert & Trainer
- Facilitator & Coach
- Trainer & Mentor
My personal favourite, however, is what I call the ‘consigliere.’ This role was made famous by Robert Duvall’s character Tom Hagen in the 1972 movie The Godfather, and includes elements of the expert, the connector and the fixer.
Being outside the organisation, the role has little actual authority but wields considerable soft power. In the film, for example, the consigliere is among the very few who can challenge the Don’s decision making. Such challenges can help any leader carefully consider high-risk decisions, and coming from outside, such challenges do not risk delicate internal relationships.
External relationships can also benefit from an extra level of independence and confidentiality. When considering significant changes that could challenge existing relationships – like buying a competitor, for example – initial approaches from an independent 3rd party can be made without harm to either party if discussions do not proceed.
Many ‘special projects’ both inside and outside the organisation can benefit as well. In the past, I’ve been called upon to investigate new products, markets and business areas as well as to help key individuals who need broad assistance or ‘a quiet word’ to get them back on track.
Because of my background, most often I’m called on to discuss and advise on equity finance, M&A and technology issues. Many of these assignments relate to approaches to or from prospective transaction counterparties and serve the additional function of keeping such discussions from distracting key members of the management team from day-to-day operations, which is always a risk with M&A.
This role can be difficult to charge for. A trusted advisor’s input is generally worth far more than the time it takes to deliver, but very hard to quantify. Often, efforts are made to create more structured pieces of work to enable suitable remuneration, but this can be very difficult to balance. Clients of mine have fielded dozens of approaches before executing a transaction, which is generally what drives revenue for M&A consultants.
More positively, this role can be among the most rewarding and is usually underpinned by friendships that can be much more valuable than the consulting hours, and the trust engendered is a unique reward in its own right.
How much could a good consigliere help your organisation succeed?