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Three Key Contributors to Growth - Part 3

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A guide to effectively leveraging Coaches, Consultants, and Contractors

This is part 3 in a series designed to explain 3 key roles that will help you get results quickly:

In Part 1, I wrote that effective business coaches help you get a clear picture of where you are now and where you want to be. They’re strong listeners and ask insightful questions. They help lay a foundation for achieving results more quickly. If you missed Part 1, you can find it here.

In Part 2, I wrote that consultants are expert advisors who give specific guidance and direction. They collaborate on a strategy (and sometimes tactics) that help bring vision to life. If you missed Part 2, you can find it here.

This post explains the role of contractors. It contains 3 thought-starting questions and some practical guidance on traps to avoid when working with contractors. It ends with a summary of why contractors are valuable as you lead your team and accelerate delivery of results.


Contractor. In general, contractors are “feet on the street”. They’re the people who have specific skills and are responsible for executing a particular part of the strategy. They join teams and bring unique skills or additional capacity. They're the ones who do the actual work.

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Business leaders often use the term Consultant and Contractor interchangeably. This leads to confusion and, often, unrealistic expectations. Recall that we defined a consultant as:

…a bona-fide expert in a specific topic, discipline, or domain. They’re specialists who serve as advisors and present opinions.

In contrast, contractors are experts in the “doing” part of the equation.

Contractors have, historically, embedded within a team (either on-site or remotely) and become temporary, often daily, contributors to the team’s throughput. They’re designers, software developers, marketing campaign managers, customer support representatives, cashiers, and a myriad of other roles.

Contractors are helpful when we:

  1. need more capacity than we currently have for a defined period of time.

  2. require a specialized skill that’s missing from our current team.

  3. have a short-term risk that additional staffing can mitigate.

It is common for consulting firms to provide both consulting and contracting services. This is one of several reasons people confuse the terms.

Many years ago, we referred to people who filled these roles as “temps”, reflecting the temporary nature of their participation. It was a differentiator — not a statement of value. However, because being “temporary” was often derided, the “temp” name gave way to “contractor”.

In the modern gig-economy, a freelancer will often adopt the “consultant” title. It sounds more impressive and results in a higher rate structure. If they’re actually blending strategy with staff augmentation, that’s probably ok. But if they’re just asking you to tell them what you want do so they can do it for you, the chances are pretty good they’re actually a contractor.


One final golf comparison

In earlier sections we talked about how a golf pro will diagnose issues and assign practice. These skills are similar to what a coach and consultant will do. There’s also a golfing equivalent to the corporate contractor.

The caddy.

Photo of a caddy carrying a golf bag filled with clubs behind a group of golfers.
Photo by jopwell x PGA on Pexels

If you’ve got enough money, you can hire a caddy to carry your clubs every time you hit the links. They’ll hand you the club you need when you’re ready to hit.

Contractors are a valuable asset when you need someone who has strong expertise in a specific skill or if you need more capacity than you currently have.


What NOT to do when engaging a contractor

With the exceptions we’ve already noted, working with a contractor is very different than working with a coach or consultant.

Keep your expectations realistic and don’t assume a contractor is going to help you clarify your vision or tell you how to streamline your entire process. Sure, there are amazing contractors who can do that and many of them probably will help out where they can.

Some of the most valuable individual contributors used to be managers. They understand what leaders need and can tune their contributions and feedback accordingly. Often, contractors are experienced people who have decided they don’t want the hassle and stress of being accountable for the bigger picture. They’re happy to let someone else worry about long-term vision and strategy.

If you find someone who is generous enough to give insight beyond the contractor role, recognize it as the bonus it is. Don’t automatically adjust your expectations for them — or anyone else you’re paying as a contractor. It starts out innocently enough but, left unchecked, can take on a life of its own.

When we find a highly competent person, it is easy to begin giving them more and more to do. After all, they can handle it — right? And, clients are measured by the amount of “value” they get out of their team (contract or otherwise). The trouble is that really skilled people who are motivated to over-deliver often have trouble saying no because it usually isn’t safe.

Make sure you’re building in clear prioritization and safe ways for them to let you know when they’re at their capacity limit. If you don’t, there’s a good chance they’ll still do their best work but they won’t be very happy. When a new need rolls around in the future, and it requires the best possible contract person, you’ll want them to make space for you.

A word about references

Clients often focus on giving references. After all, it is a “favor” we do, right? Too often, I see clients using this as a kind of leverage. They dangle the prospect of “a great reference” in an attempt to get a lower rate or to ensure they’re getting their best work.

A yellow street sign with a double arrow going left and right signifying a two way street.
Photo by raggio5 on pixabay

But references are a two-way street. In a connection economy, contractors are active participants in the referral process. They’re often in a position to comment on what it is like to work with a client (or former client). Since they’re focused on building an ever growing network of connections who value their skill and expertise, it may be wise to consider how valuable their recommendation of you will be.


Oh, and one more contracting ‘gotcha’ to avoid

There’s another area of concern that’s become a lot more important in the past few years. Employee classification.

When you hire a contractor, you’ll need to make sure you’re mindful of how you engage with them. Many large companies — Amazon, Uber, and FedEx to name a few — have been to court over claims that certain contractors are due the same benefits as employees.

There’s a wide array of reasons your company could come under investigation — a complaint from an unhappy contractor is just one of the them. Last year, many states prioritized employee misclassification among their top legislative agenda items. For example, a 2017 law in North Carolina made it easier for state departments of labor, revenue, and others to share information internally about employers. One agency’s decision to investigate provides probable cause any other agencies to join the active investigation. This isn’t just an issue for large companies and, in many ways, it is even more difficult for smaller employers.

Don’t hire individual contractors for long periods of time in place of employees. This is one of the fastest ways to get into misclassification trouble.

Don’t treat your contractors the same way you treat employees. If you do, you’re increasing the risk that you’ll be subject to federal and state fines as well as back-pay awards to affected contractors-turned-employees.

The discipline of treating contractors differently than employees is often very difficult for small business managers and leaders. You don’t have to make contractors into corporate outcasts. There are ways to make everyone feel welcome without putting your team at increased risk.

Successful leaders recognize that team cultures work best when everyone feels like they’re a part of the whole. Few people enjoy feeling like an outsider. Don’t trip yourself up by making contractors feel like “one of the team.” Be civil and kind but don’t lead them to believe they’re just a different type of employee.


Think about these 3 things when engaging with a contractor

  1. How long will we need a contractor for this work — is it a short-term assignment or a long-term commitment?

  2. Why shouldn’t we just hire an actual employee instead?

  3. How can we meet our goals while ensuring the contractor remains truly independent?

Engaging in a corp-to-corp relationship or with a 3rd party firm will likely provide greater protection to you than bringing on individual contractors who receive 1099 wages. If you’re engaging with a consulting firm, it is also important to be clear on your expectations about the service you’re buying (consulting vs contracting) for the money you’re willing to pay.

You may also consider updating your employee classification policies to include part-time or time-limited contract employee statuses. If you don’t already have employee classification tests, develop your company’s “bright line” practices for how you’ll treat contractors differently than employees.


Why does contracting matter for leaders?

The job of leaders isn’t just to have vision and create strategy. Leaders are responsible for execution.

Peter Drucker is reported to have said “Culture eats strategy for breakfast.” Recently, a variation of this phrase has emerged that replaces Culture with Execution. The people in your team are the power that drives your strategy into reality.

Leaders who communicate their vision, build a solid strategy, and staff their teams properly to accomplish the work of execution will achieve results. They intentionally engineer the organization around achievement of the vision.

Knowing how to augment your team with the right contractor expertise while actively managing legal and compliance risk is a key to leadership success.


Paravelle offers executive coaching services to founders and CEOs with big growth goals. It's a crucial support structure that helps leaders avoid the negative results that come from being lonely at the top.

We might be a good fit to work together if you're:

  • at the create (<1M ARR), build ($1-3M ARR), or grow ($3-5M ARR) stage,

  • curious and looking for ideas and answers, and

  • ready to invest in working with a collaborator that brings a co-founder's perspective (without losing half your equity).

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