When does calling in outside consultants make sense? When companies experience one or more of the following conditions: when time is of the essence, when more “hands” are needed, when special expertise is required and when objectivity is important. During these times consultants are a valuable resource pool for executives and a practical alternative to adding staff.

When Time Is of the Essence

For rapidly growing companies and/or businesses in an overly competitive marketplace, there is often a limited “time-to-market” or window of opportunity. When time is of the essence, consider seeking the help of consultants or other independent contractors. The use of outside experts buys time, provides leadership, and allows focus on priority projects without derailing regular activities.

When More “Hands” Are Needed

In today’s “lean” business environment, many businesses have more projects to accomplish than people to do them. Even when time is not a critical issue, circumstances arise where additional knowledgeable “hands” are needed , people who are familiar with the nature of the projects in progress.

When businesses realize more hands are needed to move forward, finding people who can hit the ground running (or at least jogging) is important. Locating and using qualified, competent consultants allow companies to run leaner operations without extra staff and, at the same time, grow their businesses. In addition, when there is the need for additional manpower, retaining consultants enables management to maintain attention to daily activities so that the business continues to run smoothly. When management veers off track for the sake of completing a special project, it can affect routine operations defeating the original purpose and minimizing success.

When Special Expertise Is Needed

Business owners and executives can also benefit from working with consultants when the expertise required by a business is not available in-house. In this case, management is balancing the use of outside expertise against increasing staff. “Where the use of a consultant may not be a wise choice is when one is hired on a permanent basis at the expense of developing an in-house capability,” says Marsha Lewin, CCP, CMC, FIMC, of Marsha D. Lewin Associates, Inc. “Consultants, like fish, have a season,” says Lewin. “If you’re going to have a long-term relationship with a consultant, it has to be because you cannot hire that same expertise on a full time basis.” Critical elements in this decision are knowing the type of expertise needed and the duration of the need. If the expertise is needed for a short duration, be sure that the consultant’s knowledge and skills are transitioned to people inside the company by the end of the engagement.

When Objectivity Is Important

Independent, unbiased objective points of view are often important for businesses. One way of obtaining these opinions is turning to external consultants who haven’t been involved in company history and politics. Having an expert who isn’t swayed by corporate history and politics allows new opportunities and solutions to be identified more quickly.

A good example of a situation in which companies can benefit from objectivity is internal conflict. When departments are at odds with each another or when key executives hold up important decisions because of unresolved differences, experienced diplomacy may be the answer. Introducing an objective, unaffected third person can bring about a workable decision. Another example of when objectivity might be needed is when evaluating corporate compensation policies. This process is often better done by someone not affected by the outcome.

External management consultants are not generally encumbered by the NIH (Not Invented Here) Syndrome or “we’ve done that before” thinking. Beliefs such as “we can’t do that” or “we’ll never be able to convince the boss” are often overcome by an independent, objective party. Independent management consultants can evaluate situations without internal biases. Typically, they aren’t influenced by internal pessimism.

In most cases, the ongoing involvement of internal management is essential. Internal management, in most cases, will be the ones to implement the recommendations of the external advisor and live with the long-term results of the recommendations.

The Other Option

When businesses have tight deadlines and need projects completed expediently, consultants work well; but if the deadlines can be extended and immediate turnaround isn’t so crucial to the project’s success, perhaps this is a good time to single out star employees and offer them the opportunity to shine and move up the organization. Remember, however, this option comes with an important caveat. Allowing a special project to be done internally requires close attention by the delegating executive, especially when expertise is been sacrificed to accommodate the work internally.

Choosing the Right Option

When it comes to fixing problems, creating opportunities, evaluating dilemmas or working on special projects, there are opportunities to hire external consultants and times to do the work in-house. In either case, remember businesses have options and must select the option that best serves the organization.

Jerald Savin, CPA, CMC is the Chief Executive Officer of SITKA Systems, Inc., a management consulting firm located in Santa Monica. He is also Chairman of the Institute of Management Consultants (IMC), a professional association for management consultants, and American Affiliate of the International Council of Management Consulting Institutes. For more information, visit the IMC Web site at www.imcusa.org.