A High-Priced Crutch

A High-Priced Crutch

By Ed Whitacre with Leslie Cauley

Ed Whitacre is former CEO of AT&T and General Motors. From American Turnaround: Reinventing AT&T and GM and the Way We Do Business in the USA (Business Plus). ©2013 by Edward E. Whitacre Jr. Reprinted by permission of Business Plus.

I started pushing for less use of outside consultants. The situation was just so ridiculous: GM was full of car experts, industry experts, marketing experts—people who had deep knowledge of every sort of thing you can possibly imagine when it came to designing, building, and selling cars. So why did we need all these consultants?

I got the answers you'd expect: These people know something; they're providing verification for what we think—things like that. And I'd say, well, that just tells me that you're paying somebody to tell you something you already know.

I personally consider most consultants to be of limited value. Not all, but most. I've observed a lot of consultants over the years, and it's always the same: They come back to you with the long studies and the nice booklets, neatly bound, and you sit in a big room and go over their results. And in a high percentage of the cases, there's nothing new—you already knew whatever it was they were telling you. But for some reason, you were just afraid, or reluctant, to act on it.

So one of the things I started preaching in our Monday-morning meetings was less use of consultants. We were paying our people to use their responsibility and decision-making authority. That was the only way they were going to build the confidence they needed to get comfortable with making the hard calls and stepping up to the results of those decisions—good or bad. Bringing in a bunch of consultants is never the answer—that's just a high-priced crutch, a way to stall, delay, and avoid taking responsibility—and I wanted it to stop.

Of course, I got a lot of flak from consultants for doing that. A few called me up directly to express their concern. These people were terrified that this very dependable revenue source—some of these firms had been living off GM for years, and I am talking big money—was being attacked. And in a way they were right, but that wasn't my focus. My sole focus, and sole concern, was making sure GM management got back on a good track. So I listened to what these consultants had to say, but meanwhile I kept turning the screws. I got our CFO to start giving me monthly reports on how much we were paying these consultants. Word got around GM pretty quick, and our use of consultants went down substantially not too long after that.