When I started my career in consulting, a client once told me that business consultants’s fees should be paid on the results of their advice, not fixed and payable irrespective.

Basically, what he was saying was that consultants will be more vested in not only the advice, but the outcome of the advice.

To a large extent, he was paraphrasing what Steve Jobs was saying in this clip:

“I think that without owning something over an extended period of time. like a few years, where one has a chance to take responsibility for one’s recommendations, where one has to see one’s recommendations through all action stages and accumulates scar tissue for the mistakes and pick oneself up off the ground and dust oneself off, one learns a fraction of what one can. – Steve Jobs

He was saying that it is about time that consultants have skin in the game.

This is problematic, because:

  1. The consultants do not have skin in the game , will be paid regardless of the true, long term outcomes; and
  2. Consultants are denied the opportunity to learn about the true impact of their advice and to correct their advice when new evidence or circumstances arise.

It is one thing to advice someone when you have nothing to lose, but it’s another when you have a great deal to lose.

Steve futhermore says:

“Coming in and making recommendations and not owning the results, not owning the implementation, I think is a fraction of the value and a fraction of the opportunity to learn and get better. You do get a broad cut at companies but it’s very thin.

It’s like a picture of a banana. It’s like a picture of a banana. You might get a very accurate picture but it’s only two-dimensional and without the experience of actually doing it, you never get three-dimensional. You might have a lot of pictures on your wall that you can show off to your friends – I’ve worked in bananas, I’ve worked in peaches, I’ve worked in grapes – but you never really taste it.”

Lebanese author and intellectual, Nassim Taleb puts it this way in his book Skin in the Game: Hidden Asymmetries in Daily Life:

“The curse of modernity is that we are increasingly populated by a class of people who are better at explaining than understanding, or better at explaining than doing.”

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