The number one career destination for MBA graduates is management consulting. But for those who choose an alternative route, or leave consulting, it is likely that you will end up working with consultants or even being responsible for bringing consultants into your firm, says Joe O’Mahoney
While consultants often get a bad rap, it is often the client’s fault when things go wrong. As someone who has been on both the buy- and sell-side I’ve experienced all the common reasons a project goes wrong: a badly defined scope, shifting deadlines, lack of senior buy-in, and changing requirements too often will cause projects to over-run or fail to deliver.
Below, I give my top tips on recruiting good consultants.
1Work with procurement
While there are many exceptions, procurement departments are often not well set up to buy most professional services. Procurement is great for buying commodities or products in bulk. However, consulting services are not as commodified and thus pose a challenge. A consulting deliverable is typically emergent: you often don’t know what you want until you have built up trust and understanding with the consultant. It is less that procurement often approach these purchases on a cost basis (would you go for the cheapest brain surgeon?!) and more than they get in the way of a conversation between the buyer and the consultancy.
I do recognise that in many companies, especially the public sector, procurement is a must. If this is the case in your firm, then have deep conversations with procurement about your project. Ensure that they understand that ‘the cheapest’ is not a requirement that you will assess on. Emphasise how important it is that you get to talk to potential suppliers in conversation rather than submitted questions. I needed, split the project into phases, so that the emergent, ambiguous parts of the project can be tendered out later.
2Define your business objectives, but not too much
It is crucial you understand the business needs of the project and the outputs you want. But it is also important to know that there are some things you don’t know. Opportunities offered by new software, partners, management tools, or even simple analysis might completely change your perspective. It is worth, therefore, having open lines of communications with consultancies (though not necessarily on a paid basis) to ensure you are up to date on the latest thinking.
Beyond this, be prepared to listen to many different consultancies both before and during the project itself. For example, you might assume that you are best improving efficiencies in a specific business unit, whereas a consultancy might find that you are better spinning it off or outsourcing completely. Better yet, they may find that AI can do the job better.
3Break the problem up
There are three parts to solving business problems:
- finding out what the problem/opportunity is and how important it is;
- undertaking research to identify, prioritise and plan solutions
- implementing the solutions.
These should be split out because each is dependent on the other, and there is no reason why a consultancy, or indeed the same consultancy, should do them all. In my own work, consulting to consulting firms, a client will often ask me in to solve a problem, say, preparing for a M&A. However, what I often find on arrival is that stakeholders disagree as to what the problem is and what they want out of it. In these cases, it would be foolish to start trying to research or solve the problem before we are agreed what the problem is. As Albert Einstein said: ‘If I had an hour to solve a problem, I’d spend 55 minutes thinking about the problem and five minutes thinking about solutions.’
4Prior to the tender
First, as above, have conversations with many consultancies about their ideas for success. Think about the project stakeholders and communicate with them about their needs and priorities. All the evidence on project success shows that having senior buy-in is crucial to success. After all, if the Directors do not think it is important, why should the staff?
Second, think about success measures. These will be refined later in the negotiations but should not just be about solving the problem in hand, but also wider value, such as transferring skills and knowledge to your own staff.
Think about the type of consultancy you need. Firms loosely fall into three types: Brains Firms who solve one off problems with innovative thinking (say, 5G products); Experience Firms, who solve the same problems time and time again that their clients experience only once or twice (think M&A); and Method Firms (whose value resides in the method they use rather than their people (think Six Sigma training).
You should note that as firms get bigger, they tend to move from Brains and Experience to Method, so bear this in mind if you are tempted to choose big brand names over boutiques.
5The tender itself
A tender process is crucial, even if you know which consultancy you want to work with (which, let’s face it, often happens) as it will open your eyes to new ideas. Larger projects tend to be run in two stages (Request for Information & Request for Proposal) for exactly this reason.
The tender is the basis for conversation. The tender should allow for dialogue between you and the consultancies so that you get a good understanding of the actual team that will be working with you and whether they will fit your culture and values.
Try to be honest. Some tenders are so full of idealised nonsense that it’s hard to get a real feel for what the problem is and how important it is. Clients often complain about consultant-speak, but I’ve seen a lot of client-speak which is just as baffling!
Develop criteria by which projects will be judged but match these clearly to the type of project it is and the type of firms you are targeting. I’m a big fan of defining value measures for projects and paying consultancies on the extent to which they hit these. However, this is not possible for most strategy projects or projects where outcomes are hard to measure.
Finally, the quality of people on a project is crucial. Not just those of the consultancy (don’t assume that great brand means great people!) but also on your side. Getting some of your high-flyers involved with the project will develop their skills and help ensure things don’t fall apart when the consultants leave.
6Consider using boutiques
In my own practice, which advises small consultancies on their growth, I encounter many consultants who leave the big names because they don’t feel they are delivering high value to clients. As smaller firms really need your repeat business and referrals, they will often seek to exceed expectations. Increasingly, I find that larger firms are driven only to maximise margins by staffing with juniors and upsell whenever possible. In my research I found that boutiques had higher client satisfaction levels than the largest firms.
7And finally…
Don’t forget that using consultants isn’t always the answer. 85% of spend on consultancies worldwide comes from only five countries, and in most of the world the work is done by a variety of other agents – often internal. There are huge benefits to investing in upskilling your own employees to do common activities such as project management, change management and innovation work – but that is a story for another article.
Joe O’Mahoney is a Professor of Consulting at Cardiff University, and helps small consulting firms grow successfully at Consulting Pathway. Joe is author of Growth: Building a Successful Consultancy in the Digital Age out now.
