The great ad man, David Ogilvy, once
gave sage advice about the use of outside experts:
Don’t hire a dog and bark yourself.
Like most consultants, I can relate
to that.
Life
in the Doghouse
A while ago,
my firm completed a project for a municipality. We redesigned its medical,
pension, and disability plans, improving benefits and reducing costs.
But we also suggested
removing duplicate coverage from payroll deduction and issuing an RFP to find single providers. After all, there
was no reason to have six competing
hospital-indemnity plans or more than three
dozen 403(b) plan
vendors.
Employees we surveyed said
they felt overwhelmed by salespeople – who, in some cases, failed to
communicate that options like cancer insurance were voluntary. Worst of
all, most employees, faced with so many 403(b) plan choices, opted simply not to save.
Consolidation, we proposed,
would solve many problems. A competitive RFP would weed out overlapping
plans and deals that were just plain bad. The
city could offer well thought-out options, sold by vendors that were screened
and vetted. Employees would have access to the most favorable plan
features, with the lowest fees and loads. Even the vendors, with open
access to all 9,000 city employees, would come out ahead.
Make sense? Not to
some board members.
Removing local businesses
from the plan, they said, would “send the wrong message.” Others worried
about infringing an employee’s “right to choose.” “I don’t care if some of
these plans are rip-offs,” one
member said. “Our people should be able to do whatever they want with
their money” (an attitude that clearly did not
extend to health care).
In the end, the city
rejected our recommendations. Are its employees better off? No – many
still buy coverage they don’t understand and, arguably, don’t need. And,
to this day, only about 20% participate in 403(b) – a worst-case scenario for
thousands of police and fire employees who want, and need, to retire early.
Hiring
a Dog
Why would an
employer retain a consultant – only
to choose not to take our
advice?
After all, we’re hired for
our knowledge, experience, and, most important, objectivity. Using proprietary tools, like
special surveys, we evenhandedly assess both employer and employee concerns,
and stimulate “clean sheet of paper” thinking. What we bring to the table
is the ability to balance the needs of all
stakeholders. This third-party perspective means a lot – especially with
problems that seem intractable, or in environments that are skeptical or
adversarial.
Still, at times, consulting
is just a dog’s life. We can come up with what seems like the perfect
solution – only to wind up muzzled.
Out
of Operation
Like when a
service company wanted to end abuse of sick leave and workers comp. This,
the CEO said, was his “top priority,” and he was willing to “look at anything
and everything” to achieve it.
So, when the data revealed
links between employee absences and certain management practices, we naturally
suggested new standards, measures, and accountabilities. The changes could
help reduce incidence and duration by nearly 20%.
But Operations
balked. It didn’t want to risk alienating field managers by asking them to
adopt new practices. Besides, the VP argued, wasn’t this supposed to be
“an HR and benefits study?”
So the proposal was
rejected. And, top priority notwithstanding, excessive absence and workers
comp costs persist to this day.
Nursing
our wounds
Or how about
the regional health care system that sought to end 401(k) contribution refunds
to highly paid physicians and administrators.
After extensive employee
input, we designed a tiered match, with automatic “seed” money placed in each
person’s account. The solution would have both eliminated the need to
return contributions and
changed savings patterns, creating higher overall benefits — a classic win-win
scenario.
But, during our
presentation to the benefits committee, the chief administrator was visibly
distressed. Eventually, he stood up to interrupt.
“I’m offended,” he
announced, “by the suggestion I direct any
more money to my bubble-headed nurses.”
All the air seemed sucked out of the room.
“But, sir,” I explained,
“it’s your ‘bubble-headed nurses’ who keep your doctors from getting their
maximum benefits.”
“I see,” he said as he
walked to the exit, turning to add, “Have I ever met you before?”
“No, sir.”
“Good,” he
replied. “And I hope never to see you again.”
At which point he slammed
the door, bringing both the meeting, and chances of implementing the new plan,
to an abrupt close.
Howling
in the holiday spirit
There are
certainly other examples – like the benefits manager who gave up 10% in renewal
savings rather than “confront” the carrier rep. Or the company that didn’t
implement a $7 million benefits change – to save $50,000 in communication fees. Fortunately,
these are the exceptions. Our clients usually score big in plan
enhancement and cost reduction.
Still, like David Ogilvy,
I’m haunted by memories of being the hired dog, only to be restrained by clients
who did their own barking.
And I’ll bet that you’ve been in either the same position –
or, on the other side, the client who received advice you couldn’t use.
In light of the upcoming
holiday season, would you willing to share some good will? If you’re a
consultant, tell us about a
time your client took another direction, and why you think things turned.
Or, if you’re in HR or benefits, share your views on a consulting engagement
gone wrong – and what you think should have been done differently. In either case, you can submit your
response anonymously. Please identify yourself by job function only, so
we can know the professional category you represent.
Please use this forum to
provide insight into your experiences. If you do, we can all learn a lot
as we close out the year, leading to better understanding all around.
Now that would be something to bark about!
