One challenge facing community bankers is getting the most bang for the buck from their consultants.
With so many consultants trying to attract our attention and dollars, it is sometimes hard to think favorably of any one of them. They often want to be paid more for one project than a community bank chief executive earns in a year.
There is also the question of how valuable they are. With so many jokes about their uselessness (like, a consultant is someone who borrows your watch and then tells you what time it is), there must be some truth to the warnings bankers often hear when they plan to hire one.
Consultants come in all shapes and sizes.
In my own case, I have been called a consultant, but I really don't think I deserve the title. I spent 22 years as the "economic consultant" of a major national brokerage house. But I can honestly say that they never invested one dime on my economic advice. My job was to entertain and educate the customers and thus serve as a "rainmaker," after which each officer would use his own view of interest rates and economic conditions in helping plan the customers' portfolio switches.
I have also served as a so-called consultant when a bank had a specific problem to address. But my advice wasn't taken too seriously most of the time. Basically it was to show that they had used "due diligence" on the project, after which they did just what they wanted anyway.
Other consultants do a lot more. My favorite are the ones with "bread and butter" advice - suggestions that can really help a bank.
Two examples come to mind.
Eugene S. Mann Associates of South Orange, N.J., goes into a bank looking for ways costs can be cut without affecting jobs - basing its fee solely on the dollar savings generated from the advice. And Pro Action of Brooklyn, N.Y., goes into areas that may seem trivial to a CEO but can make or break a bank in the public's eyes.
It works on things like improving employees' telephone and writing skills and data transfer accuracy, teaching them to consider themselves professionals rather than just staff members.
As most community bankers know, the areas in consultant services run the gamut from risk management, insurance, investments, marketing, and benefits programs to the planning and installation of new operating systems.
Why should a bank use a consultant?
*As indicated above, often it is to gain skills the bank does not have.
*The bank may need someone temporarily, and the use of a consultant avoids the cost of adding a full-time staff position that will be hard to eliminate later.
*The bank may need a job done immediately, and using a consultant beats waiting to train staff members to do the job - and avoids having to pay benefits.
But bankers admit that in a great many instances, the consultant would not be needed if management considered whether the bank could do the job itself. For all too often the consultant is used largely for political purposes.
For instance, the consultant has the ear of the board, whereas the same advice given by a full-time employee usually falls on deaf ears. Advice one must pay for is valued more highly than that which can be obtained for free.
The consultant also can be a facilitator to keep opposing sides on an issue from each other's throats or to pull together the ideas that staff members have generated but have not sold to other employees. The consultant can be employed to present the board or the CEO with the bad news - we all know what often happens to the in-house messenger who brings ill tidings to those in power.
Finally, a consultant can provide perspective because he is not too close to the issue at hand and has no vested interest in one viewpoint or another.
So the drawback of a consultant is that he or she often sells a service the bank should provide itself internally.
On top of this, all too often the consultant is so anxious to sell a new job while he is in the bank that he concentrates on looking for more work instead of doing the job he is now being paid for.
These are my views on consultants. But I think your views would make a wonderful column. So we are making this the theme of our new contest. Tell us your success - and horror - stories of dealing with consultants, and we will publish the best. Of course the winning respondent will become President for a Day of the Schmidlap National Bank and receive a certificate, suitable for framing, to prove it.
