Why Use Consultants?
Many companies have never used management consultants before or may have had bad experiences in the past. So we have attempted here to give an insight into the best use of consultants and some of the traps to avoid. Also see our Frequently Asked Questions (FAQ) page
Management Consultants v Contractors
Management Consultants and Contractors are two very different resources, or at least they should be! Contractors are best thought of as temporary staff. Often brought in to assist in peaks of work or to tackle specific, often one-off projects. They will probably have specific technical skills and are generally hired as individuals. They may really be thought of as temporary employees, who need to be given direction and managed, just like an employee.
Management Consultants however are a different breed altogether. Consultants should be hired because they bring a degree of innovation as well as prior experience in tackling issues similar to those you wish to resolve. Consultants are generally hired to deliver specific outcomes and will normally undertake the work in the manner they deem most appropriate. A Consulting firm also has the backing of a team of specialists, thereby being able to apply the appropriate resources and tools as required.
Lastly, a consultant should not be a ‘yes man or woman’. Whilst their job is to deliver the best outcomes that they can for their customer, they should also be prepared to challenge their customer if required.
Management Consultant v Contractor Costs
There can often be confusion amongst those new to hiring consultants, as to how consultant costs can often vary so much when compared to contractors.
Perhaps this explanation and simple analogy will help.
As mentioned above, a Contractor is really a temporary employee. They are generally paid a little more than employees, due to the fact that they have to carry some of their own operating costs or ‘on costs’. There may also be a component to cover down time. So a contractor might cost 20-30% more than an equivalent employee.
A consultant however is not just a hired hand. They are directly accountable for delivering specific outcomes, they may be providing a multi skilled team, they will usually provide very experienced senior staff to oversee the project, they may have invested heavily in specific technology and tools to deliver your required outcomes. In essence, they are not just providing staff for a given number of hours, so consulting hourly or daily charges cannot really be equated to those of an employee or contractor.
An automotive analogy.
It takes Ford or Toyota about 30 man hours to build a car. If the production staff are paid $30 per hour, should the car not cost $900? Of course not. Because we need to take account of the materials, parts, energy, management overheads, R&D, etc etc.
Why bring Consultants into your Business?
If utilising consultants is a new experience to you, these are the typical benefits that consultants should bring:
- Experience in solving similar problems. So they will get to the solution much quicker and you will see the business benefits much quicker.
- Well developed approaches, methods and tools that will assist in the process.
- Objectivity in undertaking the task.
- A dedicated team to tackle the specific issue at hand who are not distracted by also trying to run the business day to day.
- Subject matter experts who can provide a sounding board for new ideas.
The Roles of each party in a Consulting Relationship
With over 1,200 consulting assignments undertaken, Logistics Bureau’s consultants have worked with many types and styles of customer. For the relationship to realise the greatest value to our customers, we try to structure a relationship on the following guidelines.
- Needs to work with the consultant in clearly defining the project objectives and scope.
- Needs to support, and be seen to support the consulting firm, within the customer business.
- Needs to provide a project sponsor, from the company’s senior management team, to highlight to the business the importance of the project outcomes.
- Needs to communicate openly and honestly with the project team to highlight specific business issues, as well as provide feedback to the consultants.
- Needs to be involved. Customers who merely hand over a project to a consulting firm, and then expect to get the solution they seek can often be disappointed. A successful outcome requires ‘engagement’ by both parties in the project, if only to review and sign off progress at key milestones.
The Management Consultant
- Respect the fact that the customer ‘owns’ the business and that you are merely an advisor.
- Try to see the business issues from the customer’s point of view.
- Support the customer team in achieving the best outcome possible.
- Don’t be blinkered by the project brief. Think outside the square and constructively challenge if required.
- Always seek to add business value in the short, medium and long term.
- Respect the customer’s business culture and ‘fit in’ accordingly.
- Never over promise and under deliver! But it’s OK to under promise and over deliver
- If issues arise on a project, bring them to the customer’s attention and seek a speedy resolution.
- Above all else, be focused on achieving the agreed outcomes on time, on budget and with minimal if any, disruption to normal business.
How to get the most out of your consulting assignment.
Working with consultants should be a valuable and rewarding experience. To ensure that you get the best from your investment, here are a few tips:
- Have a very clear idea of your expected project outcomes. It is often best to prepare this in conjunction with your selected consultants.
- Be realistic in what you expect to be achieved, particularly in terms of time lines.
- Be open about potential issues the consultants might face, such as over protective managers who may be reluctant to share information, or aged IT systems that will make detailed data extraction very difficult.
- Ensure that you spend time with the consulting team at key milestones, to ensure your expectations are being met and to provide feedback and guidance to the team.
- Be open to challenges from the consulting team. Listen and provide feedback, and then be firm in your preferred course of action if required. It’s your business!
- Take a senior member of the consulting team into your confidence. Treat this person as a friend and colleague, and the relationship will be far more rewarding.
- When selecting consultants for the first time, make sure you take out references, not just on the consulting company, but also the key individuals as these may change over time. Also ask around amongst industry colleagues to gain further feedback on your potential consulting partners.
- Look to the consulting relationship as a long term one. If the consultants really add value to your business, they can be a valuable long term business partner for you.
Issues that can Arise in a Consulting Relationship if Partner Selection is Poor
Based on many years experience and many hundreds of consulting assignments, here are a few of the issues that can arise. Of course at Logistics Bureau our project planning and project management approach avoids these totally!
- The consultants just don’t fit with your company culture and style. They upset your staff and cause disruption.
- Make sure you select the consulting company on a range of criteria, but also with a focus on ‘cultural fit’. If you are really not happy with the individuals on the assignment, voice your concerns to a senior member of the consulting company.
- The outcomes you expected are not delivered.
- Make sure you have a detailed project brief and that you review progress at critical stages.
- The assignment outcomes lack rigour and detail.
- Before you award the contract, make sure that your reference checking includes similar assignments and also ask to see examples of past work, respecting the bounds of customer confidentiality.
- Certain managers within the business seem to be causing road blocks to the project.
- Try to ensure that the purpose of the project is well communicated within the business (if not too confidential) and highlight the senior level of management support being given.
- Key business data is proving hard to source.
- Make sure that appropriate staff meet with the consultants to go over any data requirements they might have. Be open about what is available, and ‘negotiate’ the best means of gathering this data.
- Lack of engagement.
- Ensure that senior managers within the business are at least briefed at key stages so that they can provide feedback and direction as required. (example. At the final stages of a major facility design, the MD states that expected business growth will be 5% and not the 10% advised to the consultants. Result. Masses of rework and delays in completing the design)