The Move to Independent Consultants

A short story of how the real business world is changing

Chris Stakutis   978 764 3488     August 2014   CTO

The way of doing business is rapidly changing. Here we’ll look specifically at the move towards using ever-more consultancy and for all the right reasons. 

My co-author (Inescapable Data) and I wrote about this over seven years ago and people essentially laughed at us.  But it’s happening, and so if you run a profitable business you might want to pay some attention.

For years  and years and years of the popular businesses (financial, engineering, etc) businesses nearly defined themselves by their ability to run their own operations.  In fact, such things as IT and HR and manufacturing/shipping were competitive weapons -- it is partly why your business was better than alternates because you understood these functions and created custom solutions to improve your operations (etc).

No longer.

Let me make a rough comparison: Baking (like a cake).

You probably grew up in a house like mine -- mom cooked all the time (like all day long it seemed) and everything was made from scratch, especially desserts. The flour, baking soda, sugar, cinnamon, and all the rest, came from the cupboard and gently mixed with eggs and milk and the other trappings.  And her cake or loaf would hopefully be better than your neighbors because of her skills and effort.  (A little bit like separating your business from your competition because you know HR or IT better than they do even though that has nothing directly to do with your Widget).

Turns out, if you going to make (say) a pumpkin bread, the dry ingredients are truly just commodities. So-much-so, it doesn’t matter if they are pre-mixed together and put into a box.  Add an egg, some milk, and bake.  Much less time, much less risk (ratios etc), and absolutely just as good.  Right?

So,  deeply think about whether having a full-time HR stuff truly helps you perform your core competency better (or an IT staff or even developers and accountants).  You probably used to change your own oil in your car when a kid (like I did, for too long) but how would that help you be more productive today or better at your job or allow you to spend more time with your kids?  It wouldn’t.  In fact, it would probably cost you more, not be as clean,  and take more time.

You dont do your own dental hygiene do you? Or cut your own hair?  Or replace the balusters on the banister yourself.  It seems that there are a set of industries were hiring a contractor or consultant are accepted and normal, yet, for the vast amount businesses this is just starting to be a real concept for all the other tasks.

You could potentially start a lucrative business today with no employees. You would outsource your taxes, your HR, and much of your IT (see later stories on Cloud and IT direction) because your business is to make Software Widget X and that should be your myopic focus.  But even at that, even at the actual creation of your own product,  much if not all of that can be outsourced as well.  Write a small spec and you can get a team (possibly out of the country) to create it, improve it, and have it work on all mobile devices at the same time.

Why wouldn’t you do that.

But here’s the final stomach kick. Right now, there are some huge companies (companies you would know but I won't share) that are actually turning their own employees into consultants. That is, not employees any longer.   Think about that.

© 2014 Chris Stakutis is an independent consultant, author, and software creator available to help your business.