Daily Archives: October 1, 2008

Maximum Value From Your Consulting Advisors II

As I clearly pointed out in Consultants are Cheap, a good consultant can be the most cost effective business savior you’ll ever have the good fortune to hire. Especially when you consider that, unlike your top-performer who is forever consumed with the tactical day-to-day operations of the business, a good consultant can come in and spend all of his or her time applying his or her hard-earned market leading education and experience on the core strategic issues that, when effectively addressed, can take your operation to the next level.

However, as I pointed out in Maximum Value From Your Consultants, you’ll only get your money’s worth — and more — if you’re willing to:

  • Put your own ego in check.
    This will be hard for a few managers (who take after Dilbert’s Pointy-Haired Boss), especially those whose general reasoning abilities fall in the low percentiles (as per this psychology paper by David Dunning and Justin Kruger, summarized for the average Joe in this Salon article), but I know that the majority of you will understand me when I say that if you don’t do it, you’ll never truly hear what the consultant has to say.
  • Listen intently to what the consultant has to say, even if it’s not what you want to hear.
    You might think that you’re doing good in procurement and great in marketing, only to find out that you’re procurement is so-so at best and that your marketing truly sucks. It’s important to listen intently because the only way to improve is to fix your flaws, and that’s something you can’t do if you won’t admit you have a problem.
  • Be ready to take immediate action.
    There’s less than zero value in a report that sits on the shelf. How can there be less than zero? Simple, you paid for a report you failed to act on. That’s negative dollars on the balance sheet. The way you get value is to implement the recommendations that fix your problems and save you money (and / or increase your sales).

Then, you need to

  • Work with the consultant.
  • Get the consultant the data she needs promptly …
  • … and insure that the data is good.
  • Free the consultant to focus on the core issues, not just process or just technology.
  • Accept that sometimes new technology will be the answer (and sometimes it won’t).
  • Be prepared for scope creep or scope shift.
  • And to go back to school if need be.

And then, finally, you have to select the right consulting advisor for you. Start by reviewing the Advisory Checklist, because a good consultant has:

  • a depth of experience
    in the most critical areas that need to be addressed
  • a breadth of experience
    that helps him or her understand how the issues being addressed involve and impact your operation as a whole
  • true independence where YOUR outcome is concerned
    as the consultant must be free to select the right solution for you, not a solution from a solution vendor that his or her firm has a stake in
  • a deep focus on IP, Research, and Success
    as a good consultant tries to constantly stay ahead of the market in his or her primary areas of expertise
  • a strong firm behind him or her that practices internal knowledge management
    which allows their consultants to leverage their collective experience, best practices, and lessons learned from every engagement for every client

And finally, in addition to a deep down desire to generate value for each dollar they charge, a great consultant (from the consultant corral) will:

    And so will the firm that stands behind her!

That’s probably the single most important thing to remember when trying to select the consultant that’s right for you. I probably should have pointed this out before, but I thought it was obvious, and, more importantly, we’ve only just begun the consultant craze which happens every time markets start tanking and companies hemorrhaging cash go looking for consultants in a panic (when they should have been engaging those consultants all along to avoid hemorrhaging cash in the first place). In consultant crazes, good consulting firms tend to rack up big successes one after the other in a short time frame. And sometimes, these successes go to their heads, and they start thinking they can expand beyond the niches they carved out for themselves. Sometimes they have the knowledge and skills they need to expand in-house, sometimes they don’t. In the latter case, a good firm will not expand their menu of services until they get new partners on board and plugged into their methodology, even if a customer asks. So how do you know if a consultant follows her own advice? Ask her what she can’t do. A good consultant knows her limits, will tell you her limits, and, most importantly, when you encounter a problem outside the original project scope that she is unable to bring you a first class solution to, she’ll tell you, and, if her firm can’t help you (because it’s a sales operations problem and you hired them for procurement process and technology, for example), she’ll work with you to find the right consultant who can.

Furthermore, good service providers, no matter how good they are at project management, will not rush to bring software development in house — because this will substantially increase their cost of operations, and thus of service delivery, if they do not have the time, resources, and funding to devote to a full-fledged product development operation (and most [niche] consulting firms don’t). Good service providers partner with rapid-development SaaS providers when their clients need specialized solutions. They offer to manage the work for you, not do it themselves.