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Value for Money from Management Consultants

By Arne Teubner

Unlike most outside services, management consulting seems to be less tangible, and it is therefore more difficult to make an assessment up-front. But usually, the fees are determined before the consultant’s assignment begins. How then can a decision-maker ensure that the organization gets the service, support, and results it is paying for?

Before you call in a Management Consultant

Arne Teubner Project Coach Management Mentor S-MM INTERNATIONAL

Firstly, ensure that a management consultant is called in for the right reasons, for instance to:

  • Obtain an informed and independent opinion
  • Outline the problem and formulate an objective
  • Retain expertise that is not available in the organization
  • Enter a new new market
  • Market a new product
  • Find ways and means to tackle a complex problem or
  • Assist in the implementation process.

A consultant should not be used merely to “shake things up”, to support a preconceived point of view, or to do the decision-making for your organization.

Secondly, before you meet with a consultant:

  • Attempt to define your problem thoroughly, clearly and candidly
  • Include all relevant information
  • Determine what you would like the consultant to do and to what degree you would like your own staff involved.

Thirdly, ask yourself during your first meeting, does the consultant:

  • Listen and summarize well
  • Understand the key issues involved
  • Know about your industry
  • Have experience in the market in question
  • Focus questions on your problem
  • Challenge your assumptions
  • Offer a relevant approach
  • Project a sense of empathy
  • Appear trustworthy and seem enjoyable to work with.

What to Expect from the Consulting Process

Consulting is a personal process between individuals working together to solve a problem. During a preliminary, confidential interview with the consultant, he or she should convey to you a clear understanding of the problem, agree on the scope of the assignment and verify your expectations. Oftentimes, you will receive valuable input to focus your project even before you get officially started.

Following this interview, the consultant should submit a proposal indicating:

  • An outline of your situation
  • The objective, scope, and nature of the assignment
  • The suggested consulting approach
  • The potential outcome and benefits of the assignment
  • The names and qualifications of the consultants to be involved
  • The nature and extent of your employees’ participation
  • The proposed start and end dates of the assignment
  • An estimate of fees and expenses.

When reviewing the proposal, ask yourself:

  • Are the terms and conditions clearly stated
  • Are you satisfied with the suggested approach and schedule
  • Can you provide the required support
  • Is the fee reasonable and, most importantly,
  • Are you likely to get the desired return on investment?

Once the assignment is awarded:

  • Inform your staff about the consultant’s role and assignment
  • Tell them who the consultant is, why he or she has been selected, when the process will begin and how you expect them to assist in the effort
  • As for yourself, establish an effective working relationship with the consultant. It is important to be straightforward in relating your concerns, expectations, and working style
  • Appoint one of your staff to liaise on the project and make sure that he or she understands the consultant’s work program in order to provide any necessary introductions or resources.

When the consultant presents interim findings, analyze what he is telling you carefully ¾ even if you do not like what you hear. If any conclusion does not appear well founded, ask for clarification or direct the consultant to an internal source that may provide additional information.

In getting to the heart of a problem, the consultant may uncover other issues that need to be resolved. Some may be prerequisites, some may be not. It is always tempting to add these issues to the project. But, if meeting your original schedule and budget is important, only include the prerequisites in the current assignment. Where it is necessary to expand the scope of an assignment, ask the consultant what impact it will have on the schedule and fee.

What if the Fee seems too high?

You may be able to:

  • Reevaluate the return on investment, as well as the prioritization of all internal strategic projects. Shift funds from less to more important projects.
  • Reduce it by narrowing the scope of the assignment, extend the period of the assignment or have your own people assume some of the tasks in the project
  • Reduce the fee temporarily by segmenting the assignment into phased projects.

Remember, a good job is worth its cost; a poor one is a waste no matter how attractive its price may be.

Research, Results and Feedback

After the start date is set, the management consultant should meet again with you, your key persons and anyone else who will be involved with the assignment. The consultant will use this meeting to introduce the consulting team and describe the approach and plan of action. After the meeting, the consultant will begin the process of generating as much relevant information as possible in a limited period of time.

This will entail:

  • One or more methods of data collection and review
  • Analysis of the findings
  • Testing of assumptions
  • Development of alternative solutions
  • More testing of viability and practicality
  • Drawing conclusions.

Throughout this process the consultant should provide continuous feedback. so that you know what is being done and why. You also should receive and review the findings and conclusions before the consultant delivers recommendations. After the recommendations are in your hands, the consultant should provide you with a clear direction for proceeding, either with or without further assistance.—If this has been within the scope of the consultant’s assignment.

How to Evaluate the Consultant’s Advice

When the consultant presents the recommendations, ask yourself these questions:

  • Has the consultant delivered the product he or she has promised
  • Have the real issues been addressed
  • Do the recommendations make sense and will they work in your organization
  • Are the next steps clear
  • If there are potential savings involved, do you know how to achieve them
  • Have employees involved in the process learnt how to find and solve problems on their own
  • Will your company be stronger as a result
  • When should the consultant return to check on the success of the project (project audit).

If you are not satisfied with the answers to any of these questions, ask the consultant to give you the additional information you need. A professional consultant would rather put in additional effort than leave a client dissatisfied.

Act immediately on the restuls

To make sure you get value for the fees paid:

  • Put the consultant's recommendations into effect before they are lost in the organizational inertia and daily routines.
  • If you haven not done so already, you ought to appoint an internal project manager.
  • Tell your staff to report to you in a month's time on the status of the progress made towards implementing the consultant’s recommendations
  • Call for regular reports until the work is complete.

A dedicated consultant can be expected to take an equal interest in the final results and benefits of his or her recommendations.

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