What is the difference between a ‘contractor’ and a ‘consultant’?

Many contractors call themselves ‘consultants’ but are only contractors.

Contractors bring skills, experience and an ability to do the job. You buy them for their knowledge and experience and fit them into a job/role that needs this knowledge and experience. Contractors grow in terms of greater knowledge (hopefully gained through education) and greater experience (gained on client jobs).

Consultants bring skills, experience and their ability to do the job, plus IP – the intellectual property to do the job. You buy them for their organisational IP. Consultants grow in terms of more advanced or developed IP (hopefully generated from practical research) and greater skill at implementation and capability transfer (usually gained through client assignments).

However, big consultancies are too often allowed go get away with bringing IP only (real or pretend) and putting on staff with little-to-no skills, experience or ability to do the job who then ‘wing’ their way to completion (at great client expense). (Any big consultancy consultants reading this who don’t admit this happens too often should write to me for commendation.)

Buyers need to know what they want. Do they want a person to do a job who, preferably, has done it before and can fit in with the rest of the project? Or, do they want a person or firm who knows how to approach a problem or an opportunity and can adapt this to their situation, or can bring some new insight or way of working that is of value to the firm?

If you put one or more contractors on a consultancy assignment they’ll reduce it back to what they know what to do. For example, one firm recently gave the job of defining their project initiation process to a group of disparate contractors. They pooled their experience and came up with the lowest common denominator of how they had done it in the past. No thought, no IP, no insight – so little progress.

If you put a consultancy on an assignment that they have no IP for, they’ll learn and develop it at your expense. For example, one firm gave a brand name consultancy the task of defining their project prioritisation process. The consultancy had the good grace to admit (when directly asked) that they had not done it before. The result was a reasonable ‘first cut’ but was submitted as a final version and adopted – locking that organization into a limiting and value-destroying prioritisation process.

When employing consultants you want them to have real, relevant and proven IP in how to identify and deliver value. When you employ contractors you want them to do a job.

Look beyond the title on the card and ask for their proven IP. No IP, just pay contractor rates – and that goes for brand name consultancies too — as too many of the major brand consultancies have little to no original IP!

Topics: Value Delivery, Value Equation, Project Governance

Further Reading



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Revision History

First published: Simms, J. (Feb 2010) as "insert Original Title"

Updated: Chapman, A. (March 2020), Revisions and Corrections