Getting Better Consultancy

Article from my LinkedIn series Nov 23

Why get a consultant?

Consultants bring something you need but can’t get done yourself. It’s that simple.

1. Capability you don’t currently have
Maybe you need a designer for a new interior project, but don’t have one on staff. Maybe you need three business analysts this month, but you only have one on staff

2. Perspective
Perhaps you’re doing a project overseas, and need someone with specific experience of that country’s regulations? Perhaps you’re coasting in familiar ways and need active challenge to your strategy?

3. Neutrality
Perhaps two of your key staff are in a conflict situation, and you need a neutral third party to assist? Perhaps you need an unbiased options appraisal on realising a new strategic direction?

4. Kudos
Working with someone of high status might catapult you somewhere new. (Bilbao’s tourism was nearly nothing before they had Gehry design the museum building)

5. It’s the rules
You’ve got to have an external auditor.

But the consultancy must leave you stronger. This might mean commercial success. It might be growing capability so you can do it yourself next time.

Note: if a consultant doesn’t work to that goal, they aren’t a consultant they’re a parasite, seeking to build dependency and leech off you forever.

The initial brief

The mistake would be to tell the consultant what to do and/or giving too much detail. The right way is to give three things:

• your desired outcomes — the destination
• your contexts — the landscape
• your parameters — the fences and guardrails

Your outcomes are an answer to the question ‘how will the world be different after this engagement?’. Make it one sentence, in the present tense, and expand detail if you need to. Examples:

• My executives are operating as an effective team
• My commercial operation is consistently 20% more profitable than last FY
• My team are set up to deliver this project on time, on budget to the delight of all our stakeholders

You can think of it as the destination.

Your contexts are the landscape you’re operating in, such as

• Your stakeholders
• Your org scale and experience (never done this before? Say so)
• The internal staff who’ll work on it
• The material that already exists (market research, a huge suite of briefing documents we’ll share later…)
• Anything you’ve tried that hasn’t worked
• Assumptions and inspirations — ‘we really like how [company] did this task last year’

Your parameters are the fences and guardrails. Things like

• Must be completed by MM/YYY
• Format of products (eg, must be in Excel format)
• The Board will be the final approver
• Budgets (for the project, for the engagement)
• What you will do and what you expect the consultant to do. For example, financial analysis done by consultant, or supplied?

These can be ‘hard’ or ‘flexible’ — say which. For example: “There is some flexibility on the timetable, but the budget is rigid.”

How much detail? For anything under $50k, this should be one or two pages. If it’s a bigger project, then expand this logic into your procurement process.

Remember, this is usually not the comprehensive document that drives the future project, it’s the start point for getting the right person on board.

Selecting and Contracting

There are two outcomes you’re after here — to get the right person on board, and to set the cultural ground rules for a successful engagement. Your procurement policy will have rules/processes for this. Work within those, of course, but apply some principles.

• Ask for responses from people you know, and people you don’t. This process is an opportunity for innovation — spread your net wide.
• Build a process that includes a conversation
• Build a process that asks for a ‘reverse brief’
• Involve your team — the ones who will actually do the work with the consultant. (There’s no point choosing the person you like if your colleagues can’t work with them)
• Meet the people who’ll do the work. You don’t really care about the PWC partner’s talent if they’re going to farm the work straight to an overworked graduate cadet.

Build a process that minimises bias:

• Decide selection criteria in advance and ensure they are quantifiable and agreed with all decision-makers
• Have more than one person score — select people different to you (include a sceptic and a team member if you can)
• Ensure the person with actual hiring authority is involved
• Seek references
• Trust your instincts, but back up with evidence

Tip — do not hire someone for past outcomes. The outcome of any previous project was a result of a process involving the consultant and the client. That won’t ever be repeated, never mind how well their last project seduced a Board member. Instead, hire for the success of the process. Make “how did they work with you?” the key question of referees.

A Proposal with a reverse brief

You want four things when you ask a consultant for a proposal

• Have they understood what I need?
• Do they understand the context in which the work will happen?
• Do they have a credible path to get there?
• The costs and logistics

Are they any good at this? is not the question to ask. First, you knew that before inviting them to submit a proposal. Second, the above three questions allow you to discover that. Third, for further verification ask for a reference. Any consultant that won’t happily offer you a reference is not to be trusted.

As part of the proposal, I think a client should always see a reverse brief: the consultant reflecting back what they understand and how they’ll work. I wouldn’t dream of seeking an assignment without doing one.

A reverse brief has three key sections:

• What the consultant has understood about your requirements (outcomes and parameters)
• How the consultant understands your context (your industry, your operating model)
• How the consultant would approach your work.

This allows you to do two things: check they’ve understood the surface level, and that they empathise with the deeper issues. It’s likely all consultants will get the first; the latter is where you can make your selection.

Consultant hiring checklist

Question to ask during selection

• Do you include feedback / revision cycles in the process?
• Do you include a presentation at the end?
• What’s the format of the report?
• Do I get the raw workshop outputs, notes etc.
• What do you need from me (and my org) to make this successful?
• What do you already predict will be the pain points, and is there anything I can do to mitigate them?
• How can we brief my peers / colleagues to give you the best chance of success?
• What if something emerges that throws us off track (eg, team members have wildly different ideas about the project, or a key staff member resigns) — how do we resolve that?

Before you sign, four real clues that you’re talking to the right consultant

• My gut instinct feels good about this? (If not, why not?)
• They ask tough questions that you didn’t think of
• They say things that makes you feel they were listening into Board conversations
• Their commentary makes you think ‘yeah, they get it’

What should it cost?

You all know the story of the electrician charging $1,000 for fixing a microwave in 30 seconds with a hammer? When asked for an invoice to back up his fee, he wrote

• Hitting the microwave with a hammer: $5
• Knowing where to strike: $995

When you hire a consultant you are hiring for the value they bring you. Which means you need to be very clear what this work is worth to you, and why.

For example, a training and mentoring program for your managers may look like ten days of work: Come in and deliver some training, and do monthly mentoring for six people for six months. That would cost a day rate multiplied by ten, right? You could try that. But you’re unlikely to get a consultant who can deliver that outcome at that price. And it would be as fair to the consultant as trying to pay that electrician just the five dollars.

This example is going to get a measurable increase in staff retention and efficiency. The skills built will lead to, say, one great staff member staying instead of leaving. What the value to you of keeping a star performer? Maybe $50k of recruitment costs and lost productivity avoided? That’s the value, that’s what the consultant is worth. You might negotiate to only pay them $40k. But it certainly isn’t simply ten times the cost of an employee.

This conversation can feel awkward, for everyone. But have it clearly, at the beginning, and then move past it. This is no different from a tradie at your house — you would never assume they’re charging you their annual salary divided by the number of hours they’re with you.

And I repeat what I said earlier. Ethical consulting isn’t price gouging. It should leave you stronger, with zero dependency on the consultant. If both of those are true, then it will be good value. If they’re not both true — do not hire that person.

On the journey together

Whatever the assignment, there are a couple of things you can do to make it a success.

Brief your teams well — share the proposal with them. In my client-side days, I was sometimes summoned to meetings with consultants with no prior briefing. It was a waste of time for everyone.

Be attuned to the organisational vibe around the work. If there’s a story around(‘what a waste of time’ or ‘we already know the answer’) then confront it head on. Be clear exactly why this is happening.

Trust the process — allow yourself to be led through by the consultant. They’ve done this before.

Check in with your consultant frequently — share honestly how you think things are going, and raise any concerns from your side.

Hold up your end of the bargain — book the meeting rooms, take decisions quickly.

Be prepared for the consultant to challenge you. I’ve had projects turned on their head by advice; in one case, I cancelled a project because the consultant delivering it suggested a better way to achieve the ultimate goal.

Internal capability

I’ve said before that consultancy that leaves you dependent is usually bad consultancy. (Exceptions might include services where independent expertise is key — for example, WHS reviews or Audit).

Leaders must work to achieve many things at once. Every project is a chance to grow capability. It is usually not the primary objective of a consultancy assignment, but it is really easy to get this growth ‘along the way’.

First, make it part of the consultant’s work. I did some values and behaviour work with one group of Executives recently; we produced behaviours and indicators, and along the way they learnt the methodology and can now apply it to their staff in future.

Second, open yourself to what *you* can learn. I learnt a lot about facilitation from watching expert facilitators in action. Same goes for public speaking.

Third, have intentional conversations with your team about what they will learn from the process. Many years ago I had an excellent staff member whose identified development need was to reduce their sense of overwhelm at large projects; working alongside a project management consultant they learnt to chunk tasks.

And last but not least, use your consultant to reflect truths about your organisation upwards. As an example, when I was CEO of an NFP, we had our external ‘virtual CFO’ to talk to the Board about what he saw in the organisation. One thing he said, that some key people in the organisation did not take responsibility for budgets but saw it as the accountant’s job, was helpful in steering a different culture of financial reporting to the Board, which changed how managers saw their responsibilities.

A great question to have in mind is, what would we need to do so that next time we don’t need a consultant? (IMO, this is what the public sector has generally done poorly in the last decade. It’s not wrong to use consultants, but leaders should have actively worked towards lower dependency on consultants over time.)

In summary…

• Be clear — what you need, how you want to work
• Be direct — communicate clearly, honestly
• Be fuzzy — you need a consultant because it’s fuzzy, don’t pretend there aren’t issues to resolve
• Be swift — don’t waste anyone’s time
• Be kind — this is a collaboration for mutual benefit
• Be structured — sort out teams, approvers, background information early
• Enjoy it.Good consultants are a breath of fresh air, let them blow the stale air out.