Deciding whether to hire a Consultant can be challenging. “Will they actually help the situation in the long run?” “Can’t we do this internally?” Finding the right fit, the time of yours needed to get them up to speed,and insuring that everyone (in both organizations) is on the same path is a lot of work. Not to mention that this will all reflect back on you, the decision maker, for years to come. These are all valid considerations but for many the process of securing the best consultant for the project is the largest sticking point.
Our survey shows that referrals from colleagues is the most popular method to hear about Consultants. However many business owners tend to not ask colleagues about this for a variety of reasons, the primary being the competitive nature of small business and they may not want to bring up that they could use some help to business colleagues.
Help is here!
Here we will share observations and best practices on engaging consultants. These have been collected 2 ways; through client interactions, and a survey conducted by C.S.Simons Consulting in 2015 of Small Businesses/Non Profits who have experience hiring Consultants (Firms or Independents). Our survey focused on when the businesses used a consultant and what they used them for. Perhaps their experiences may help you.
Nearly 2/3rd s of the businesses in this survey relied on a Consultant with in the last 3 years
Who uses Consultants
This appears to be a common practice for businesses with less than 500 employees’ and longevity of over 6 years. The 6th year is a milestone everyone looks for in business because the closure rate begins to drop after 5 years in business. But even the businesses with greater than 25 years longevity in our survey showed strong support for using Consultants. While each business listed here would use them for slightly different purposes, it was evident that there was a correlation between utilizing outside experts and business longevity.
Most common uses found in our survey;
Consultants providing an edge to Operational Effectiveness and Strategy were widely used followed closely by function experts that could be used as an “outsource” option like Accounting, Legal or Marketing.
How does your competition use them?
The best time to engage a Consultant is when business is going well. This provides a very different perspective of the business and true advances can be made in efficiency, product design, or even opening up new marketing channels. Consultants may also be used to gauge future Capital needs, Strategic Growth Planning or Board Development strategies.
When do you need a Consultant?
- The most common time to engage is when there is a known problem or business seems OK, but it could be better. The key is to find a Consultant who is capable of diagnosing the “root cause” of the problem(s) which are impacting the business. In these situations many business people spend too much time diagnosing or misdiagnose the problem and then the situation can go from bad to worse. To properly assess a situation a consultant may conduct Survey’s to measure loyalties (Customer or Employee), establishing Performance Monitors, or conducting Profitability Assessments to help manage product costs.
- A Crisis situation is also a common time to call in a Consultant. Here you need to find the right type of consultant(s) who can quickly assess and impact your situation before major changes take place. Generally this type of problem will cost you much more money in the long run given the level of involvement you need from the consultant or resources needed. Some Crisis situations are not avoidable and are thrust upon the business. Labor issue’s, Regulatory issues, Public Relations crisis to name a few. Depending on the Industry this happens in, the general practice is to have a team of Consultants available to help correct the situation and insure business continuity.
Don’t be fooled by reality TV to think someone may come in and fix your business in 48 hrs!
How do you find the right one for your business?
Where does the problem exist? One of the most common misconceptions that often lead to a higher expense is the belief that the consultant must be an expert in your industry. Yet over 60% of our survey respondents noted that Industry Experience was the most important factor when choosing a Consultant. There are times Experts are needed and industry experience is valuable. My point is to make sure you know what type of problem needs to be fixed before making that determination; Industry specific or general management/business practice. The more observant as to where the problems are with in the business first and not what industry your are in, will get the problem solved quicker and more economically. Many businesses over spend when hiring consultants because of this. Assessment like this can be difficult for many businesses that don’t have tools or resources to do it adequately. If that is the case, finding a good Business Analysis consultant may be the best first step.
3 Most Important points to consider
- Do they have the right industry experience to impact your business?
- Can they share Successes they have with this type of problems?
- Delivery style that fits your organization?
The most important aspect to finding the “right” consultant firm for your business starts with the initial assessment/interview. Consulting is a business of relationships and it is never about a quick sale. This person should take a genuine concern for the situation and your people. They NEED to be able to influence you and your people, if you don’t feel they add value from the first meeting, you may have the wrong person. Be prepared to speak to more than one Consultant before choosing. While both may suggest the same solution, HOW they achieve it for you or through your people may be very different. After Elvis has left the building it is you that will either look great for bringing them in or to be left have to deal with any fall out.
The best way to interview a Consultant?
The single most important part of this process is looking at references or testimonies. Experience and Knowledge base is important (and expected), but it’s the results and successes the consultant have brought for the client is really what should matter. What a client has to say on how the consultant delivered the solution, how it was implemented and the ending quantifiable result is what you are looking for. Websites should be used to gauge authenticity and can give insight on how the firm goes about achieving results with in their specialty. The last important thing to look for is content. Do they blog, have white papers or perform public speaking as a way to educate their followers. Some create content for the sake of creating content. It helps with Google and may look good but it may lack any real advice or insight. Saying what has been said by 100 others recently may not add value to your situation. Consulting is an industry of results. Making attempts to educate, add value or guide is what you want to look for in your perspective Consultant. There should be an almost immediate impression that this person will solve your problem.
The “Simple” interview method-
- Don’t feel you need to have the answers – Most of the time consultants are relied on for their analytical skills. It is not uncommon when first engaging a Consultant to NOT know for what or where you want to use them. Rely on them to run part of the first meeting and have a very open mind on the process. Some business people feel they need to “manage” the relationship and always want it to be known they are the client. Forming a “partner” mentality with the consultant is the best advice I could suggest. I offer a Privacy Statement upfront with perspective clients. It is important to feel you can show your consultant any piece of information that pertains to a problem. The perspective Consultant should establish Trust quickly. Then just see where the conversation goes.
A more organized interview method
- Having pertinent documents assembled helps significantly. Many perspective clients have sent me this information ahead of time (after Privacy Statement) which allows a much more focused meeting on what solutions could be offered. If there are multiple people in the decision process, having them in the same room will often give the Consultant the most accurate picture of the problem to create a proposal from.
I could go into great length as to how an agreement should look and why you want one to protect your organization, but for the purpose of this article please make sure to include these in your discussions and/or contract. They protect both parties and detail outcomes. Here are a few basics;
- An accurate assessment of the situation to be addressed
- What is the expected outcome(s)
- Joint accountabilities
- Detail any deliverables – systems, training, reports, etc
- Measurements, Timelines and Milestones
- Terms, Expenses, Fee’s – included and not included
C.S.Simons Consulting specializes in Management & Business Strategy, offering 25 years of successes for you to benefit from. Offering a Shared Risk Platform – Results Guaranteed or you won’t be billed!
If you would like to discuss this in greater detail or would like to see more results from the survey mentioned;