April 2005

In the current economic climate, we see many of our clients seeking to outsource and to hire external consultants to provide them support. We have noted both successes and failures from our own experiences as well as from those of our clients. In this month’s tip, we would like to share with you some tips that can help you have successful results with external resources.

There are 11 primary reasons organisations seek outside help rather than solve problems internally, these are:

1. The organisation lacks available personnel. Because of limited time or lack of training, the people needed to solve the problem are just not readily available within the company. Consultants can devote their full attention to the problem in question.
   
   
2. An outside opinion is needed. Many companies try to solve their own problems and run into more problems. Sometimes, a fresh, objective viewpoint can help the organisation reach a satisfactory solution. Consultants bring an independent perspective to the problem.
   
   
3. Company politics inhibit honesty. Many times, people see the real problems but cannot give an honest opinion because the political climate is prohibitive. Often, a consultant can “tell it like it is”.
   
   
4. The organisation needs a boost. “New blood” can help inspire the sales and marketing force, improve operational efficiency or give the right image to potential investors or creditors and influence them to help raise needed capital.
   
   
5. Maximisation of efficiency. Because of other commitments, it is more efficient to use outside help rather than shifting insiders to a particular project. Correct timing is essential, especially when competing in today’s volatile marketplace. By having a consultant, you can save valuable time.
   
   
6. Knowledge and skills are lacking. It takes special expertise to design and implement a distribution channel and business partner management program, develop a compensation scheme for business partners or select and evaluate potential business partners particularly in a country other than your own. To have this type of specialised expertise isn’t practical for most small and many large organisations.
   
   
7. Employees need training. Some programs, such as computerisation, market segmentation, channel management, business partner relationship management, interpersonal communications, are instituted to train employees to better serve resellers, customers and end-users. Consultants can usually do this more effectively.
   
   
8. Organisations don’t want to do the wrong thing. Legal concerns and government regulations dictate that organisations are not free to learn by “trial and error”. A consultant who knows the correct interpretation of the laws and regulations can save time, money and embarrassment.
   
   
9. Companies need help for a limited time. Like hiring temporary help, consultants can join an organisation in a professional capacity and help out with a project under specific time constraints.
   
   
10. A consultant was suggested by the boss. When the “powers that be” say it is imperative that a consultant be hired, managers respond by signing on the dotted line.
    
    
11. Innovation. Frequently, the consultant can introduce new concepts and techniques to a client’s organisation. In this way, the expert acts as a catalyst.

To maximise the effect of the money your organisation will spend; it helps to follow a few guidelines when making a selection of a consultant and when making the final contractual arrangements. When the above reasons are critical to the company’s situation, ask the following questions before deciding to hire a consultant:

• Can the consultant add something worthwhile to the company’s total output?
• Will the consultant’s expertise bring the company any closer to its goals?
• Can the consultant make the company work more effectively?
• Will the consultant save the company time?
• With the budget available, can the consultant do a comprehensive and effective job?

If the answer is “yes” to any of these questions, the services of a consulting firm should be considered. Once the need for a consultant is established, you must develop your selection criteria.

Look For Specific Experience And Expertise

You wouldn’t hire a plumber to build a garage, nor does it make much sense to hire a financial consultant for a human resources problem. Once you have a good sense of what your problem(s) is/are, then look for a consultant or a consulting firm which has the experience in that particular area of need. The fact that consultants serve many clients usually means that they have addressed problems in a variety of business situations. Often this knowledge alone is enough to justify their fees.

One way to check experience is to get a list of references from the consultant. Like you do with references from job applicants, take the time to talk to former clients to find out how satisfied they were with the services provided.

Preliminary screening should include:

• What types of clients has the firm served?
• How long has the consulting firm been operating?
• What kinds of projects have been handled in the past?
• How many of the accounts are repeat business?
• Does the firm have experience in dealing with the proposed problem?
• What are the backgrounds of the personnel in the consulting firm who will be assigned to work on the project?
• Is the firm recognised by the Chambers of Commerce (British, American, Belgian, etc.) or other professional / trade organisations?

If you are not certain how to get in contact with the right consultant, use your own network. Contact a manager at another institution who has worked with a consulting firm that fits your needs. Other sources are meetings, seminars, professional organisations to which you belong, consultant/authors who wrote articles you liked and organisations to which consultants belong. For example, in the Benelux there are no formal officially recognised organisations for consultants, as a consequence, you must perform your own due diligence. The British and American Chambers of Commerce, American and British Embassy commercial counsellors, other Chambers of Commerce can be very helpful.

Think It Through

Before you call a consultant, get your thoughts in order. Some situation prompted you to think about hiring a consultant, and you usually have a better understanding of it than the consultant does. Assemble your thoughts, write notes and gather any pertinent documents and information before you set the initial meeting with the consultant. What is your objective? Do others in the organisation understand what will be impacted by the use of the consultant?

Like any interview, the initial meeting with the consultant is very important in setting the climate and direction of the project. The consultant may recommend the need for additional information such as what is gathered from employees, market research, etc. Often, these means are used because clients have not taken time to adequately prepare for the meeting. If statistical instruments are really needed, they can be invaluable, but don’t add unnecessary expense to the project. How will the consultant know what it is that you expect him/her to do? What will be the agreed “deliverable”?

Are you prepared to be open and honest while actively managing your consultants by seeking out the best advisors — specialists if necessary — and involving them more thoroughly, and at an earlier stage, than you might have done before? At the same time, you need to be more sceptical of their credentials and advice.

Because you have selected the best consultant you can, it is in everyone’s best interest to make the relationship work and achieve its objectives. As in any partnership, this requires constant work and communication from both parties starting with the selection and engagement with clear definitions of roles and responsibilities and deliverables. The cooperation may get derailed but that should not prove disastrous. Both of you should work to get it back on track.

If you need help in working with external consultants, email MNSA with your requirements. We have helped before.

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All material in this email is Copyright (©) 2005 by MNSA / MMI CV.  All Rights Reserved. This material may only be redistributed in its entirety.  Address: Prins Boudewijnlaan 243, 2650 Edegem, Belgium