In today’s business world, there is much more to success than balancing the books.
In fact, company presidents and CEOs are worrying about increasing productivity, coaching top executives, reducing company turnover, and finding the right information management systems. In addition, they are worrying about how they will ever learn all there is to know about each of these very complex issues, in the shortest amount of time.
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For many, the answer lies in finding the right consultant.
“Throughout the lifecycle of a business, companies will probably use a consultant at least once,” said Robert Hamlin, director of the Rhode Island Small Business Development Center at Bryant College, which links business owners with consultants at no cost. “A business owner needs to understand their own skills, and then they reach outside to get advice on things they aren’t as skilled at.”
A consultant by definition is someone who works in an advisory capacity, aiding in the exchange of views or ideas. For businesses, a consultant can be used in variety of capacities from helping formulate a specific company objective, to solving a complex problem in the day to day operations of a business, to implementing a system of delivery.
Whatever the goal, the key to a successful consultant-business relationship is understanding boundaries.
“A business needs to have a clear understanding about what they want a consultant to do,” said Michael E. Shays, chairman of the Institute of Management Consultants USA, a professional association based in Washington D.C that represents management consultants from across the country. “Before a consultant starts their work, it must be very clear what they will do. If it’s not it becomes a very risky assignment for both the client and the consultant, as the consultant will assume a charter to do something that the client hasn’t even thought of in their mind, and as a result the consultant is off in the wrong direction.”
Hamlin agreed.
“One of the worst things is a consultant who says they can do everything for everybody,” he said. “The number one thing is to find out what a consultant’s clinical expertise is, and then to find out if that matches the need of the business owner.”
According to Shays, there are two kinds of consultants: a subject matter consultant and a process consultant.
“A subject matter expert is someone who comes in with a certain kind of knowledge in an area that a client needs information,” he said. “They bring cross fertilization to a company without divulging the secrets of other companies.”
He continued: “A process expert is someone who usually works one on one with businesses through a certain project. They get people to understand the larger purpose and ultimately how to get there.”
Once the appropriate consultant has been selected and the process is under way, Shays said, a business owner needs to tell his or her employees who the person is, why they have been selected, when the process will begin, and how they expect employees to assist in the effort. When the consultant comes back with interim findings, Shays said, company owners need to listen carefully even if they don’t like what they hear.
Hamlin said the results can depend on the style of the consultant.
“Some consultants are very aggressive, and some are more conversational in establishing dialogue,” he said. “It all depends on how the job is set up.”
In addition, Shays said companies shouldn’t be focused on the cost of a consultant’s services.
“I think that you have to think about where the value is,” he said. “It doesn’t matter what you are paying, it matters what you are getting in return. The problem is that many people look at the daily rate as being too high for the amount of time. But it’s not time versus value.”
In fact, Hamlin said the cost of a consultant can vary drastically.
“It’s like asking what an attorney charges,” he said. “You never know. The range per hour can go very low to very high depending on the nature of the work.”
What makes it more difficult for companies to know if they are getting the best consultant, both men agree, is the growing number of options. The consulting field has taken off in the past decade as a result of technology, and the changing economy.
“This industry has definitely grown by leaps and bounds,” Shays said. “Knowledge has grown so quickly it’s hard for any one person to keep up.”
Industry growth has also brought a sea of problems.
“People think that just because they have worked in a certain field that they can be a consultant,” Shays said. “That’s not true. It’s quite different than that and those who don’t know the process, and don’t know the client relationships give the rest of the practice a bad name.”
But if a business defines its goals, and finds a consultant who matches them, then both Shays and Hamlin agree it can be a successful venture.
“Getting a consultant is a very cost effective way of solving a problem,” Hamlin said. “Companies should survey their own knowledge basis, identify the opportunities for change and then find a consultant to get them there.”
The following are suggestions from the Institute of Management Consultants USA:
Things for a businessperson to ask themselves during the first meeting with a consultant:
- Does this person listen well?
- Do they understand the key issues involved?
- Do they know about the industry?
- Do they focus questions on specific company problems?
- Do they challenge your assumptions?
- Do they offer a relevant approach?
- Do they appear trustworthy?
- Do they seem enjoyable to work with?
Following the interview, a consultant should send a letter of agreement that includes:
- The objective, scope and nature of the project.
- A summary of the company’s situation.
- A suggested strategy
- The potential benefits of the work
- The names and qualifications of the consulting staff
- The nature of company employee’s participation
- Proposed start and finish date
- An estimate of fees and expenses
How to evaluate the consultant’s advice:
- Has the consultant delivered the product promised?
- Has the real issue been addressed?
- Are the recommendations logical and will they work?
- Are the next steps clear?
- Do you know how to achieve any potential saving?
- Have your employees learned how to find and solve problems on their own?
- Will your company be stronger as a result of the changes?
- When will the consultant return to check on the success of the project?
