5 Occasions for Using Management Consultants (and a Few Simple Ways Improve the Odds of Success)

Even with today’s booming freelance economy, many people still question the efficacy of consultants. Training somebody in-house appears to be a much safer option. Unfortunately, this thinking is flawed and often results in significant organizational skill gaps and greater overall costs when all is said and done. Clients need to engage the right consulting partners with the right expertise while making sure they’re a good fit for the organization.
If you’re looking for specific benefits of using management consulting services, read our article The Pros & Cons of Using a Consulting Partner. Let’s continue now by discussing five specific situations to consider when seeking out the right consulting partner:

1. A Skill-Gap Exists

One of the most common reasons an organization decides to use a consultant is the presence of a skill gap within the organization. This means the team either doesn’t have the time or skills necessary to complete a specific task or project. In fact, when we surveyed 472 purchasing agents in charge of making consulting partner decisions, subject area expertise was the single most important attribute (second and third were industry expertise and reputation, respectively).
Even if the skills are to exist in-house in the long-term, bringing a consultant, or consulting team, to help train and develop those skills is often beneficial. The right partner can come in and help clients hit the ground running, improving the team, and providing a short-term boost at the same time. This is one of the most often overlooked benefits of management consulting partners: the entire team learns and benefits from the opportunity to work with an external expert.

2. The Project Needs Are Temporary

When there exists a significant long-term skill-gap at the client site, it’s usually best to consider bringing somebody in full-time unless they don’t have the budget or enough work to justify it. However, short-term projects and tasks are typically an ideal fit for the expertise of a consultant. Unless you are Netflix, who has built a culture of flexibility(1), you don’t have the opportunity to scale up and down at will. Most organizations will benefit from outsourcing, and the expert will assist with continuity before he / she departs the client site.
Consulting partners are often valuable on a temporary basis even if the existing skill-set exists in the client organization. When teams are already loaded to capacity or working on a highly important initiative, leaders don’t want to pull them away from their day-to-day. (If clients find themselves hiring management consultants too often because of this, it’s a good idea to consider building out another position or project team). On a short-term basis, however, consulting is the perfect way to temporarily increase organizational output. A great example here is studying or pursuing an entirely new endeavor, such as a new business unit, market, or project. Parties can begin working with a consulting partner with an eye toward expanding the team in the future.

3. External Perspective is Required

There are plenty of reasons an external perspective is enormously beneficial, but it boils down to the fact that internal resources are often too close to the business to have a truly objective viewpoint. A good partner will be able to look at problems with an outsider’s perspective, giving clients the opportunity to benefit from additional context on not only the current project but the organization. With their expertise, teams will often uncover additional opportunities in the marketplace and industry and potential pitfalls which have been possibly overlooked.
Another reason to use outside consulting is when an organization needs somebody with authority to act as an agent of change. These partners don’t have the day-to-day exposure to internal standards, politics, and culture. They’ll be able to offer a truly objective outside opinion, and often, that is what clients need to pinpoint an inefficiency or discover the missing piece of a project.

4. Testing is Required Before a Full-Time Hire

If clients have a new project or a growing company, they may not know whether to make a full-time hire quite yet. A consulting partner is a way to test a position or resource before making a hire. If going this route and planning to hire a specific consultant full-time, though, clients need to keep two things in mind:

  • Double-check any legal language which may prohibit hiring from a consulting partner.
  • Be upfront with intentions so to avoid burning bridges. Many firms won’t care, but this is a common professional courtesy.

Even when clients aren’t planning to hire a specific consultant, the partner should be able to help scope the position and prep the rest of the team for this new role.

5. Hiring Isn’t an Option

Sadly, clients might not always have the option of bringing somebody in full-time. If this is the case, such as in a hiring freeze, leveraging the expertise of a consulting partner is often the only way to bridge any organizational gaps. Client must choose partners carefully and monitor the return – if the team is able to that it’s a good investment, they will use that information to justify a full-time position when necessary.

The Next Step for Clients: Improving Odds of Success

Kotter International, a change management consulting firm founded by legendary Harvard Business School professor John Kotter, found over 70% of large-scale initiatives fail to hit their targets. (2) With almost one-third of projects failing, it’s important to know how to purposefully improve the odds of success:

Prepare Internally

To really succeed, teams need to be onboard with the initiative. All stakeholders must be prepared and understand what will be expected of them as individuals and as a team. Clients must also identify internal champions to drive the initiatives.
Clients must have a plan ready for transitioning away from their consulting partner. They cannot not underestimate the amount of time required to execute a smooth transition.

Know the Consultant

Firm reputation is important, but even the most skilled consultant may fail to help an organization if there simply isn’t a good fit. Clients should spend as much time as they can with a prospective partner to ensure that the partner has both the expertise and personality to work well with the project team. This isn’t always possible, unfortunately, and in those cases, clients should be wary of a common bait-and-switch tactic: enticing with a superstar resume or accolades and providing different talent throughout the project. If clients want a specific consultant from a firm, they can attempt to make that part of the contract.

Purposefully Check References

It should be common knowledge that references are inherently biased. Think about your own professional references – you hand-select the people which will give the most glowing remarks about your capabilities. Consulting firms operate the same way. If possible, clients should dictate the type of references to review, and should ask specifically for firms that are similar in industry, project type, size, culture, etc. Another good tip is to request a reference from a project which did not go smoothly. Buyers can discover exactly how the firm is able to resolve issues and handle speed bumps that naturally arise during any project.

Look Online

Clients should always see what they can dig up online. If they find companies that hired a consultant not listed as a reference, the buyer should reach out to see if the consulting firm’s previous client is willing to share their own experience. We also obviously recommend using Consensus as well. We are specifically building a database of real client reviews of management consulting firms for just this purpose.

Review Their Content

One last scan a buyer should perform is for any white papers, blog posts, or other content published by the firm or its employees. Reputable firms often make this accessible on their website or through industry sites or publications. Thought leadership is an excellent indicator of experience and success in an industry or practice area. Clients will also get a better look into how the firm thinks critically and whether they’re a good fit for. If looking for a niche partner, buyers must be cautious of those firms offering more breadth versus depth in a topic.

Overall, the expertise of the right management consulting firm can provide important tangible benefits. The key is knowing when to deploy them and tactics for improving the chances of success. Consensus can also help buyers maximize their chances of finding the perfect consultant, no matter how big or small the business project needs are.

 

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Consensus is a directory and review database of management consulting firms and their services. At Consensus, we believe there is lack of information pertaining to the quality of work executed by consultants in the eyes of the client stakeholders. We are working to build the largest database of genuine, accurate, and helpful testimonials from  consulting clients.

 

Sources

  1. Giang, Vivian (2016, February). She Created Netflix’s Culture And It Ultimately Got Her Fired. Fast Company. Retrieved from: https://www.fastcompany.com/3056662/she-created-netflixs-culture-and-it-ultimately-got-her-fired.
  2. Kotter (2012, January). What Happens When the Strategy Consultants Leave?. Forbes. Retrieved from: https://www.forbes.com/sites/johnkotter/2012/01/04/what-happens-when-the-strategy-consultants-leave/#9958eab2113f.