Consultants - How to Choose, Use, and not Abuse them.

Del Chatterson
4 days ago
4 min read

Consultants

How to Choose, Use, and not Abuse them.

(These comments on consultants and other professional service providers were originally posted at LearningEntrepreneurship.com and later included among the Random Ramblings of Uncle Ralph in Part V of Don’t Do It the Hard Way).

In a recent meeting with an old consulting associate who has also written books of advice for entrepreneurs, we were reminiscing and exchanging some of the old clichés and bad jokes about consultants.

For example:

How do you recognize someone is a consultant? He’s wearing a suit, carrying a briefcase, and looking uncomfortable 100 miles from home.
What does a consultant do? Well, he’s hired as an “efficiency expert” to decide who to fire so the boss doesn’t have to do the dirty work himself.
How does he work with clients? He’s the guy who borrows your watch to tell you the time, then he keeps the watch.

But seriously, we agreed that our only product as consultants was to deliver a satisfied client who recognized that they had received value for the owner-management team by contributing to the business achieving its goals and objectives.

And I was reminded that I had tried to summarize in a short blog post and article exactly what I had learned from thirty years of consulting what made the difference for clients and consultant to arrive at that satisfactory conclusion to any consulting project.

Following is the last update of the article from LearningEntrepreneurship.com

Consultants: How to Choose, Use, and Not Abuse Them

Help them, help you

Last Update: Mar 21, 2024

Since my first consulting project over thirty years ago, I have learned a lot about

how to successfully manage consulting projects and the client/consultant relationship. Here is my advice, which I am sharing again to help you with your

consultants (and your lawyers, accountants and other professionals):

Before you introduce consultants to the process, be sure you need what you want and want what you need. Beware of consultants that agree to do whatever you want, whether you need it or not.
Look internally to confirm the three "C's" of consulting project readiness: Capacity in budget, time and resources; Commitment of management and
staff affected by the process; and Capability to support the project and implement the conclusions.
One more "C" – Compatibility. Select your consultants from an organisation that is compatible with yours - are you a corporate multinational or a local entrepreneurial business?
Recognize whether your consulting needs are strategic: requiring outside expertise to inspire and facilitate your business planning process, or operational: bringing knowledge, skills and experience that are not available internally.
Meet the operating consultant. It may not be the same charming, talented person that sold you the work. And at those fee rates you don't want to train
a recent MBA, who started last week and studied your industry yesterday.
Test Drive: Check whether the consultant arrives with questions, not answers; will operate as neither boss nor employee; and will win the hearts and minds of your staff. Successful consultants will listen, understand, empathize, analyze, strategize and persuade better than normal people.
Remember you are hiring a consultant to challenge and push you. You are not renting a friend to tell you how smart you are.
Can you confidently expect a solution that will be yours not theirs?
Ask for references. Call them.
Ask who is not on the reference list and why not. Learn what they think causes a project to be unsuccessful. And ask which list they expect you to be on when this is over.
Ask for fee rates and a work plan with estimated hours. Then agree on a fixed fee for agreed deliverables with dates, documents and milestones.
Don't let their progress reports interfere with your progress. Get what you need, not what they need for internal "CYA" requirements.
Check who else is billing time to your project. Sometimes there is a very expensive partner back at the office who needs to keep his billing rate up. Your budget can be quickly consumed while he "supervises" from a distance.
Avoid surprises. Ask about additional expenses: travel, telephone and printing. Terms of payment?
Do they have a satisfaction guarantee?
Get the agreement in writing, read it before signing it.
Watch for signs of trouble: such as selling more work before the work is done; long delays between on-site visits; too much time spent "back at the office" and billed to you.
And finally, remember consultants are people too. They want to boast about good work and satisfied clients. You can help them help you. Don't be difficult.