Consultant versus Contractor
What is the difference between a consultant and a contractor? How do you pick out the good ones?
I recently reposted something I had seen on LinkedIn with the comment "Not all consultants are created equal." I was pretty quickly "reminded" by Rob England that there is a difference between consultants and contractors. He is right. He is often right about a lot of things, which is why you should follow him on LinkedIn if you don't already. If you read the article I linked, the individuals it describes are, as Rob points out, definitely acting as contractors, not consultants.
Sam Taggart
What's the difference?
These terms often get confused. Adding to the confusion is the fact that freelancers can often find themselves occupying both roles at different times depending on the customer and the relationship they have with them. In his comment, Rob makes the distinction based on how they get paid. That is certainly part of it, but I think there is more to it and based on other discussions I've had with Rob, I think he'd probably agree. LinkedIn Comments are not the best place to elaborate on complex topics, hence this post.
Contractor as a Doer
I agree with Rob that the freelancers described in the article I linked were acting as contractors. Why? Because they were actually doing the work. When I think of contractors I think of them foremost as doers. The client has some specific thing that needs done, some problem that needs to be solved, and the contractor is hired as the doer. They are mostly there because the client doesn't have the manpower or the specific skills needed to do "the thing" and isn't interested in developing those skills internally. The client usually has "the thing" pretty well-defined. The contractor just takes orders. There may be some decision-making on the contractor's part, but it's mostly around how to do "the thing", rarely about whether "the thing" is actually the right thing to do, or will actually solve the underlying problem. The contractor is typically not even aware of what the underlying problem is.
Consultant as an Advisor
When I think of consultants I think of advisors. Typically the client has employees doing the work, but there is some problem. Generally, the client is not getting quite the results they want. Their team is running into problems and roadblocks and they aren't sure what the best solution is. So they bring in a consultant to help point them in the right direction. Done poorly, the client is just looking for someone to confirm their existing bias and tell them if they keep continuing to do the same thing over and over they'll eventually get different results (sorry if I am a little cynical here), but done correctly, the client is really looking for someone to bring in outside ideas and a fresh approach, some new ideas for them try and to help them make sense of all the various choices and options out there.
Another way to think about it - Waiter or Doctor
There is another article I read recently that used a different analogy that I thought also worked well. A contractor is like a waiter. They have a list of tasks they can do - the menu. They pretty much just take orders and deliver exactly what was ordered. It is very transactional. A consultant is like a doctor. They look at the symptoms, come up with a diagnosis, and then prescribe some treatment.
It's also important in this analogy to think about the role of the diner/patient. They are very different. The diner knows exactly what they want. They are hungry, they just have to find something on the menu that matches their preferences. There are few questions and little interaction. The patient only knows the symptoms. They have no idea what the actual cause is or what the treatment should be. They are required to interact with the doctor. They are required to submit to an examination and answer questions in order for the doctor to diagnose them.
Michael Katz
Fuzziness
One of the reasons I think this gets confused is because often freelancers bounce back and forth depending on the client and the role between these two positions. On some rare occasions, freelancers can even find themselves filling both of these roles at once. This actually happens to me fairly often. As an example, I do a lot of work on R&D-type projects. In these cases, "the thing" is often not very well defined. Often the thing is "We have a product idea, but we're not quite sure what it looks like. We need you to help us either build or test a prototype." In those cases, I am often the doer because they don't have the expertise to either build the prototype or the tester, so I am often the one building those things. However, I'm also the advisor because they often don't know exactly what features the prototype should have or what they need to test. So I'm throwing out ideas about how to get feedback from customers, how to interpret that, what hypothesis to test, etc. Even in non-R&D type work, as a contractor, you may be asked to do something that doesn't quite make sense. So you start asking questions. At that point, you are acting like the doctor trying to diagnose the underlying problem. If you have built trust with your client and they are open to it, at that point you can move into that role of not just being the doer but also advising on the strategy.
You don't have to be stuck as a contractor
I encountered a great example of this when I went to Amsterdam last year for GDevCon. I walked into a fancy bar. I asked for a beer and the bartender could have just handed me the menu but he didn't. He could have just been a contractor and very transactional. Instead, he asked me what I liked and then made a recommendation. When I came back for round 2, he took the time to ask me what I thought of his recommendation, and based on my feedback, he recommended I try something else. I guess my moral here is that if you are a freelancer and have landed a contractor gig, don't be afraid to ask questions and find out what's really going on. It will give you ideas on how to do your job better. It may also give you the opportunity to give some advice and move into that trusted position. I will caution you though: be careful giving unsolicited advice. Jerry Wienberg is mandatory reading before you jump into this arena.
My original point
I still stand by my original assertion that not all consultants are created equal and this holds true for both contractors and consultants. Contractors tend to differ in the menu they offer: the specific set of skills they have. There are Mexican, Chinese, and Italian restaurants and then there are burger joints. Contractors also differ in the quality of those skills in the same way that you can order a hamburger at McDonalds or the fancy brewpub down the street. Arguably they are both hamburgers, but the quality varies widely. Consultants vary in a variety of ways as well: amount and type of experience in terms of the industry, size of company/teams, etc. Consultants also differ in their philosophy around business and software development practices.
How do I decide?
I will defer this question to people far smarter than me. I've gotten some great advice over the years from 2 key people - The head of the 3to5 business development group that I was part of for many years, Chuck, and my personal business coach Nate.
For Contractors
When it comes to selecting contractors, I am always reminded of one of Chuck's lectures. It's aimed at business owners around pricing and marketing positioning but I think it holds here. We have this common fallacy that we think people only buy on price, but Chuck provides 2 easy examples to disprove that. The first is cars. Toyota makes plenty of money selling daily drivers at affordable prices and yet Porsche continues to sell high-end cars at a premium so obviously there is a market for both. The other example that fits better here is the hamburger. If people only cared about price, the only hamburger joint around would be Mcdonald's. But that's not true. Part of Chuck's lecture goes into diners deciding on a restaurant. Typically they have already decided on the quality level they want first. They know they want fast food or a nice sit-down restaurant. At that point, it's a matter of do they want a hamburger, spaghetti, or tacos? Does the menu match?
So my advice for selecting contractors is simply, to select first the quality level you want or can afford and then look for the specific skills you want. Now if you are looking for a contractor and you don't have the skills to do "the thing", how do you judge the quality of someone else's skills? That's hard. We can use a proxy here and that is price. Generally, McDonald's is much cheaper than the brewpub. You can also think about location as a proxy. If you want fast food, looking in the mall food court is a good bet. If you want a fancy restaurant, well you look in the nicer part of town. Same thing for contractors. If you want fast-food contractors, look on Fiverr or Upwork. If you want Michelin contractors well you have to look in different places. Unfortunately, there is no Michelin list for contractors. Recommendations from other high-level contractors or a previous client are probably a good starting point. You get what you pay for, so I always recommend getting the best contractor you can afford.
For Consultants
If you are looking for a consultant, my business coach Nate has some great advice. His philosophy is that what really causes clients to buy consulting services is shared values. I can attest that the best clients I've had and the ones that were the easiest to sell to, fall into this category. So my first piece of advice is to sit down with the prospective consultant and find out what their values are. How do their values align with yours? How do they view business? Is the point of business to serve customers and making money just a by-product? Or do they view the point of business as making money at all costs and serving customers an afterthought? Are employees valued team members? or cogs in the wheel of the money-printing machine? These are very important things to be in alignment on. If you are not in alignment, then whatever advice they give you is never going to work, because it will go against your values. Then of course, once you find a client who shares your values, then you need to make sure that they can actually solve your problem. Referrals from previous clients are probably the best litmus test here.
