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Industry Discussion

Why Use Consulting Services?

Consulting services exist to provide specialist advice and services in particular fields of expertise. The number and types of consultant services vary significantly; consulting is available for almost every facet of life. Companies and businesses hire consulting services because they identify a need that cannot be fulfilled internally, or do not want to hire people on a full time basis if the specific need or service can be completed in a relatively short time. If there is a problem that cannot be fixed by the existing team then consulting services are required to be called in.

Another situation where consultant services are used is when a business owner takes the view that they could improve their organisation’s performance (i.e. that they could build on success) by having an external party offer an alternative viewpoint. Many businesses run the risk of getting stale or stuck, simply because they lack external and fresh ideas. A key advantage of bringing in consultant services is that it adds a different viewpoint to the mix.

Hiring a consultant sounds easy, but there are pitfalls in thinking that externally sourced consulting is the panacea of all problems. For example, research shows us that simply applying generic “best practice” from across all organisations will not necessarily deliver the best performance for a specific organisation. Why is this? Best practices don’t work in a vacuum and many factors will determine how an organisation performs and operates. So, understanding the organisation and what is possible and not possible is highly relevant to the organisation’s success. Accordingly, hiring external consulting services to assist with organisational change, performance, health assessment, etc., needs to be done with great care as the operating processes and environment are critical and can be unique to specific organisations.

Equally important is hiring the appropriately qualified and suited consultant. This simple example shows how easily a business can fall into the trap of “self-consulting’ (i.e. business owners adopting what works elsewhere to its own organisation, without evaluation) or acquiring inappropriate consulting. Unfortunately, many organisations don’t value the benefit of consultant services and endeavour to short-cut the processes by becoming “in-house experts”.

Another key reason to hire external consulting services is to challenge the norms of an organisation.

How do I Find Great Consultant Services?

Having determined that your business needs external consulting services, the next step is to find the best services you can. Fortunately, the internet has made it easier to find consultants as it provides limitless choices for specific fields of expertise, industries, geographical areas etc. However, there are still pitfalls that should be avoided before making the selection.

Arguably, one the best ways to locate a consultant is by referral from a trusted source, as these are effectively recommendations. When a person refers a consultant, they are providing an implied recommendation and reference for that individual or company. However, it is also important to understand the level of success that the consultant has achieved. Success should be measurable and is more than simply a great recommendation. You should enquire into what was achieved, how was it measured, how it could be applied to your business, etc.

Industry associations are a great source of shared knowledge and can often be a source of referrals, based on conversation between members within your industry who may have used consultants.

Things to Consider Before Engaging Consulting Services

Every engagement will vary, but there are some basic steps you can take that will assist you in selecting appropriate people or consulting firms to help you. These include:

  • Clearly identify the expertise that you are seeking. Make sure what you want to achieve is documented so that it can be communicated clearly.
  • Look for referrals in this area, i.e. look for people who needed the same expertise and the consulting services that they used. Do more than simply make a phone call; meet with them and understand which consultant they used, why they used them, what they did well and more importantly, what could have been improved. Finally, understand what the outcome was and whether it lasted over a period of time.
  • Shortlist more than one firm or individual.
  • Do research on the various companies or individuals you select. Compare proposals and expertise to make an informed decision.
  • Plan and prepare for your interviews / meetings. This is critical and should include a list of items or an agenda to talk through. For example, confidentiality terms, references, successes, fees, terms and conditions, getting resumes for nominated personnel, what deliverables you require, timeframes, processes, budget and cash-flow, staff inputs and outputs, etc.
  • Make sure they understand your industry/business and sector. It is possible to have someone who understands your industry, but whose actual experience is dated. You will need to make sure that their expertise is current so that they can provide you with relevant knowledge.
  • Communicate with them early to determine whether you are able to relate to them. Can you work together? It is pointless selecting someone with whom you struggle to communicate or someone that you are not comfortable with.
  • Ensure that they can articulate what they do and what you need. Do they demonstrate capability when interviewed?
  • Get a proposal; this should be more than just a high level cost estimate and must also give you a feel for their approach, their timeframe, a budget and input estimate. The input estimate should include how many of your own resources will need to participate, what time is involved, etc., as you still need to operate your business and cannot afford to have it significantly interrupted.
  • Consider the impact on your business and your ability to deliver to existing clients. You may need to do a staged review.
  • Make a decision, agree terms, set KPIs for the consultant(s) to achieve, then constantly review actual progress against planned progress and fine-tune in places you are not achieving agreed KPIs. Act early - or pay the price of not managing your consultant.

Pitfalls

The following are generalities, but provide some insight of things to be cautious of:

  • Quick fixes – if this is the message you get then you are likely to make a wrong decision as there is often no such thing as a quick fix.
  • If the consultant won’t enter into a confidentiality agreement – alarm bells should ring.
  • If the consultant won’t enter into an agreement with you, or if they do and the contract is full of generalities and no rights and obligations.
  • Avoid big promises – if they have only just scratched the surface but make big promises, terminate them and start again as they have likely only skimmed your present situation and not understood the challenges of making necessary cultural and process changes to deliver sustainable change.
  • Don’t just do basic analysis and don’t work without a plan. Good consultants will plan an approach and give you an idea on how your business can move from situation A to situation B. This will usually include a timeline and a detailed plan of attack. It will also include an action plan of what can be done immediately as well as what might be done in the future.
  • Bold and generic conclusions should set off alarm bells.
  • If the consultant does not offer evidence of success or client references.
  • If the consultant focuses on the future rather than on the present.
  • If the consultant does not construct action plans, but simply words about issues and outcomes.

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