What is expected of a consultant

November 29, 2012

(This article was originally published at Statistical Modeling, Causal Inference, and Social Science, and syndicated at StatsBlogs.)

Robin Hanson writes on paid expert consulting (of the sort that I do sometime, and is common among economists and statisticians). Hanson agrees with Keith Yost, who says:

Fellow consultants and associates . . . [said] fifty percent of the job is nodding your head at whatever’s being said, thirty percent of it is just sort of looking good, and the other twenty percent is raising an objection but then if you meet resistance, then dropping it.

On the other side is Steven Levitt, who Hanson quotes as saying:

My own experience has been that even though I know nothing about an industry, if you give me a week, and you get a bunch of really smart people to explain the industry to me, and to tell me what they do, a lot of times what I’ve learned in economics, what I’ve learned in other places can actually be really helpful in changing the way that they see the world.

Perhaps unsurprisingly given my Bayesian attitudes and my preference for continuity, I’m inclined to split the difference, along the lines of two other people quoted by Hanson. Christopher McKenna divides “the [consulting] roles into two parts”:

The first part is . . . they bring advice to a firm that doesn’t otherwise have it. . . . The second thing that they provide is legitimacy . . . you hire the consultants to confirm what you already thought.

Similarly, Nick Bloom says:

There are really two types of consulting. There’s operational consulting, you know, down on the factory floor . . . those guys are very much like seasoned, gnarly, ex-manufacturing managers that have spent twenty years working in Ford and are real experts, and are now getting paid as consultants to hand out advice. . . . And then there’s the very small elite end, strategy consulting, about five percent. And that’s much more helping CEOs make big decisions.

I just thought I’d add to the discussion here by sharing my own experiences. I’ve done some consulting of the “operational” sort, where I provide advice so that people can better solve their problems. Other times I’ve been paid to give a short course on Bayesian statistics or multilevel modeling (I’ve done that at Procter & Gamble, Merck, and Google), and I hope it will be useful to the people there, but I really have no idea. Still other times I’ve been paid to do really easy stuff—I’m thinking here of some legal consulting involving simple random sampling of documents from files. Really anyone could’ve done that; on the other hand I know enough not to get distracted from the main goal in such problems.

Only once have I been hired simply to be a yes-man as in the scenario described by Yost in the first quote above. This was in 2000 when someone from the exit-poll consortium called me and asked if I wanted to consult for them. That sounded fun. They sent me some material and I came to the meeting. I was expecting that I’d sit quietly for a few hours listening to everything and then I’d have the chance to give my suggestions. Instead, when I got to the meeting they seemed to want me to stand up and talk. So I did so for awhile. I told them about multilevel regression and poststratification and how great it was, also I gave some suggestions about improving the exit polls. Eventually I stopped. Somehow I’d talked for about 2 hours. There was silence. I said, Do you want me to leave now? Someone said yes. And that was it. They did pay me. But I never quite figured out what they wanted from me. Maybe just a rubber stamp? I have no idea.

There have also been lots of consulting meetings that have gone nowhere, sometimes (annoyingly) after I’ve been assured I’d be paid. But usually I think they really want my expertise. Not a lot of Rick Mishkin jobs, is what I’m saying. But this is when I’m consulting directly. Maybe things are different when companies hire McKinsey-type consultants, rather than hiring a statistician or economist directly.

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