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"How to
Evaluate Consultants"
By Hank Moore
Matching consultants with actual and emerging company needs is the corporate
leader's quest. With a wealth of expertise available via outsourcing, one can
quickly become a "kid in a candy shop," wanting whatever is readily
available or craftily packaged.
Too many consultants mis-state and over-represent what they do, stemming from:
- Eagerness to get business.
- Short tenure in consulting, believing that recent corporate experience readily translates to the
entrepreneurial marketplace.
- Unfamiliarity with the actual practice of consulting at the executive level.
- Lack of understanding about business needs, categories, subtleties and hierarchies.
- Failure to create service area niches and target clients.
- Professional rivalry with other consultants, resulting in the "I can do that" syndrome.
Niche consultants place emphasis in the areas where they have training,
expertise and staff support for implementation...and will market their services
accordingly:
Many vendor-consultants will recommend what they have to sell, based upon
their own niche perspective:
- An accounting firm may suggest that an economic forecast is a full-scope business plan (which it is not).
- A trainer may recommend courses for human behavior, believing that these constitute a Visioning
process (of which they are a small part).
- Marketers might contend that the latest advertising campaign is equivalent to re-engineering the
client company (though the two concepts are light years apart).
- Niche consultants believe these things to be true, within their frames of reference. They sell
what they need to sell, rather than what the client really needs.
Distinctions must be drawn into three consulting categories (and percentages of
their occurrence in the marketplace):
- Vendors sell products which were produced by others. Those who sell their own multiply produced
works are designated as subcontractors. (82.99%)
- Consultants conduct programs designed by their companies, in repetitive motion. Their work is
off-the-shelf, conforms to an established mode of operation, contains original thought and draws
precedents from experience. (17%)
- High level strategists create all knowledge in their consulting. It is original, customized to the
client and contains creativity and insight not available elsewhere. (.01%)
As one distinguishes past vendors and subcontractors, there are six types within
the 17.01% which constitute consultants (with their percentages in the
marketplace):
- Those who still lead in an industry and have specific niche expertise. (13.5%)
- Those who were downsized, out-placed or decided not to stay in the
corporate fold and evolved into consulting. (28%)
- Out of work people who hang out consulting shingles in between jobs. (32%)
- Freelancers and moonlighters, whose consultancy may or may not relate to their day jobs. (16%)
- Veteran consultants who were trained for and have a track record in actual consulting. That's
what they have done for most of their careers. (2%)
- Sadly, there is another category...opportunists who masquerade as consultants, entrepreneurs who
disguise their selling as consulting, people who routinely change niches as the dollars go. (8.5%)
99.99% of actual management consultants come from five basic career orientations
and fit onto one of the five branches of The Business Tree™:
- Technical or niche industry orientation.
- Financial.
- Entrepreneurial, small business management.
- Academic, research.
- Human resources management.
The remaining 1/100 of a percent of consultants is a rare breed...a Big Picture
strategist, fitting onto Categories 6 and 7 (trunk and roots of The Business
Tree™ ). The strategist is an idea person who has run businesses, knows about
all other categories, deals in concepts and policies, and possesses
sophisticated understanding and insight.
How to Pick the Right Consultants for Your Company
These pointers are suggested in the selection of business advisors and
consultants:
- Ask a corporate strategist to help determine which consultants are needed, draft the requests for
proposals, evaluate credentials and recommend contracting options.
- Understand what your company really needs and why.
- Don't pit one consultant against another, just to get free ideas.
- Don't base the business on "apples to oranges" comparisons.
- Ask for case studies which were directly supervised by the person who will handle your business...
not stock narratives from affiliate offices or a supervisor.
- Find out their expertise in creating and customizing for clients...rather than off-the-shelf
programs which they simply implement.
- Determine their abilities to collaborate and interrelate with other consultants.
In budgeting for and pricing consulting services:
- Budget for consulting at the start of the fiscal year, averaging 10% of gross sales. This does
not include marketing, which should be another 10%.
- See consulting as an investment (short-term and long-term), not to be short-changed.
- Every size of business needs consultants, just as your clients need your services.
- The company which makes the small investment on the front end (consulting) saves higher costs.
Research shows that consulting fees foregone are multiplied six-fold in opportunity costs each year
that action is put off. (This is another of my trademarked concepts, known as The High Cost of
Doing Nothing.)
Questions to consider in evaluating consultants include:
- Would you feel comfortable if they ran your company?
- What is their longevity? Were they consultants 10-20 years ago? Consultants must have at least a
10-year track record to be at all viable as a judgment resource.
- What is their maturity level? Could they appear before a board of directors?
- How do they meet deadlines, initiate projects and offer ideas beyond the obvious?
- If one level of consultant sells the business, will this same professional service your account?
Big firms usually bring in junior associates after the sale is made. Demand that consultants of
seniority staff the project.
- How consistent are they with specific industries, types of projects and clients?
- How good a generalist are they? Consultants with too narrow a niche will not ultimately serve your
best interests.
Professional status is important. Prospective clients should inquire about the
consultant's:
- Respect among current and recent clients.
- Reputation among affected constituencies within the business community.
- Activity in professional development and business education. If they do not pursue ongoing
knowledge progression, they are obsolete and not valuable to clients.
- Track record at mentoring other business professionals. Check to see that they give beyond the
scope of billable hours.
- Pro-bono community involvement. If they have done little or none, they are not worth hiring.
Top professionals know the value of giving back to the community that supports them, becoming better
consultants as a result.
The ideal consultant:
- Clearly differentiates what he/she does...and will not presume to "do it all."
- Is a tenured full-time consultant, not a recently down-sized corporate employee or somebody
seeking your work to "tide themselves over."
- Has actually run a business.
- Has consulted companies of comparable size and complexity as yours.
- Has current references and case histories.
- Gives "value-added" insight...in contrast to simply performing tasks.
- Sees the scope of work as a professional achievement...rather than just billable hours.
- Pursues client relationship building...as opposed to just rendering a contract service.
Been There, Done That...
People Often Say They Have...But Really Haven't!
Wonder why it's lonely at the top? It's because few people get there...really
achieve the pinnacle of a career. Reaching the top means being the best that you
can be. It's not indicative of occupying a certain chair in the board room.
Being "at the top" is a journey that was enjoyed. It entails
"staying power." It's analogous to working hard, getting stronger with
age and prospering due to a continuum of accomplishments. Many folks (especially
young ones who don't know any better) seemingly want to short-circuit the dues
paying process. They say that the slow track is for chumps. They say "Been
There, Done That" but are hard-pressed to list where they've actually been
and what they've really done (or the processes for accomplishing).
Characteristics of those who will fall by the wayside include:
- Will not listen to superiors.
- Didn't have business role models or mentors.
- Don't see the merits in being a mentor to others.
- Make a lot of excuses.
- Are not prepared.
- Cannot wait.
- Think that they know better ways.
- Seek to rise too fast.
- Would rather be an executive that "doing the work."
- Think they will get rich quick.
- Don't respect authority or the process.
- Don't see the merit of continuing education and training.
- Won't pay dues...in the office, in the community and in business organizations.
- Don't learn how or why to research.
- Persist in gossiping and blaming.
- Insufficient life experiences.
- Don't have a plan for life or career.
Earning success the old fashioned way --- through a measured apprenticeship up the business ladder ---
is still the one and only way to assure a successful ride to the top. Characteristics of those who
will "make it" and "Go the distance" include:
- Realize that time commitments never decrease with the years.
- Motivation to excel and exceed...by reasons other than money.
- Know and acknowledge strengths...applying them in appropriate ways for best company advantage.
- Know and acknowledge weaknesses...not letting them get in the way of progress.
- Know better than to misrepresent one's self or claim expertise that is not earned.
- Realize that the more you learn will point up the need to learn more.
- Realize that there is no such thing as perfection.
- Show proper respect for those above and below them on the corporate tree.
- Show loyalty, honesty and ethics to each company-project where working.
- Create original ideas, work concepts and processes.
- Exhibit a consistent, cohesive body of work.
- Be judged by the average of work product...not rare "home runs" or "gold strikes."
- Do things in such a way as nobody else in that job could have done it.
Executive Seasoning
Because of company urgencies and industry trends, professionals
may accelerate their progression, only by small percentages each year. It is a
fallacy to assume that one becomes a seasoned executive simply because he/she
wears several hats in a small organization. Executive seasoning is time-tested.
Only experience brings wisdom. One cannot fast-forward to the executive tracks
without having laid steady groundwork. The purpose of this chapter is to show
young professionals the path to the top. As years progress, one's
responsibilities do not decrease. By contrast, the scope and complexity of a top
executive's career are multiplied. One cannot fathom being at the top until they
have paid dues, learned from the journey and amassed wisdom to handle the
assignments.
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