Many, if not most, consulting assignments are successful. Others are not. The disasters, more often than not, are in the public domain – state sector mainly – and become the fiascos that we hear about. The private sector, including public companies, is generally better at cover-ups.
Are these consultants therefore incompetent? If so, why were they employed in the first place, and how do they make living? Or, are there issues residing in the host organisation that tip the balance. In other words, “with every rogue dog there is poor master”.
This is my 14-point plan:
A possible consultant yearWeeks
Holidays (including public holidays)6
Sick leave2
Training and updating2
Marketing (visits, delivering presentations, phone calls) 5
Unsuccessful proposal time (non recoverable)5
Time written off (consultancy time that is not billable)3
Balance being consultancy time29 weeks
At 45 hours week this comes to just over 1300 hours year
Consultant salary of $150,000 factored up by 2.5 *$375,000
Charge-out rate$290 per hour
* If consultant could attract salary of say $150,000 in senior management role they need to be getting at least that in major consultancy firm. major consultancy firm needs factor of 2.5-3 times salary to cover overheads such as training, administration support, offices, non-recoverable flights.
Using the same model consultants in smaller firms with less overheads and charging out at $150-$190 per hour are not taking as much home as they think.
Lesson 1: Ensure consultant-compatible culture
Some organisations are culturally anti-consultant. It starts at the top and seeps insidiously through the organisation. It may be based on previous bad experiences or misconceptions about the charge-out rates. See box below for an example of how charge-out rates are calculated:
Lesson 2: Invest in comprehensive selection process
Invest as much time as possible in the pre-selection process, before beginning dialogue with short-listed consultancy firms. First short list three to five consultants based on reputation. Where possible, interview previous clients. Spend at least one day for every $50,000 of project budget, short-listing consultants who have achieved similar results to those you seek.
If using an open-tendering process, obtain client references where they have performed the same exercise. This will reduce the number of firms submitting expressions of interest/proposals (depending on how involved you want the selection process to be). Check prior to short listing.
Having made the selection, re-interview couple of previous clients to better understand how the consultants work best (they may not realise it themselves).
On large assignment it may be necessary to “hire thief to catch thief” – no offence intended. I was once asked to quote on major proposal when all the signs were bad. Instead, I offered our services as part of the quality selection process, to help with the short list, evaluate the proposed teams and suggest lines of questioning. One of the interesting parts was ensuring that staff member mentioned in the proposal was elevated to higher role in the team. It meant revenue moving within the consultancy firm, from one office to another hence the office in charge of the proposal had selected their staff at the expense of the strongest team.
Thorough pre-selection work creates win-win for client and consultant. Only firms that can do the job and have successful track record need to invest time in proposals. At the same time, the client will be more confident of the consultants and be more likely to actively promote them in-house, give them the freedom to get on with the job and, last but no means least, listen to them.
Lesson 3: Market the consultants in-house
The right consultants, in the right place, at the right time offer many benefits. Some of the reasons for using consultants include:
• creating on-the-job training for project staff
• enabling the organisation to undertake projects it does not have the in-house capability to do
• bringing knowledge of better practices
• accessing ‘honed’ project management skills
• uncorrupted by in-house culture or thinking
• the experience that comes with having done it all before – unless the consultancy is being asked to venture into the unknown.
If consultants have been employed for these reasons then the senior management team (SMT) must actively market them in-house, prior to the project starting. As one project manager said, if the SMT do not market the reasons for the consultancy assignment and highlight the benefits of the particular consultants (their success stories etc) then don’t be surprised if management and staff resent the consultants being foisted on them.
Consultants work better in receptive environment where they can blossom – even cactus needs water.
Lesson 4: “A prince who is not himself wise cannot be wisely advised”
Many managers lack the skills to manage large projects let alone oversee the complexities of adding consultants to the mix.
Without strong in-house project management skills, contracting consultants in will not solve the problem. Project management skills must reside with the project manager, the sponsor and the senior team.
Where skills in project management are lacking in any of these three areas chaos usually reigns. The SMT must fully understand project management techniques so they can be forewarned and take the necessary action when the projects start going off track. Many projects fail because of the SMT’s gap in knowledge and experience.
Consider why Sir Edmund Hillary was so successful. Success for him was delivered through complex planning (accommodating the potential to exceed the original goals), focus on finishing and, the genius to build teams that retained sense of humour in adversity.
Play to your skills. Do not have big projects if you are not big project organisation. Then you won’t need to keep the 12 gauge loaded ready to shoot the messenger.
Lesson 5: Some projects should never be started
All consultants, if they are honest, will admit to the odd self-inflicted disaster. Many disasters however, rest in the hands of the managers or people who contracted the project. They create projects or new starts with such abandonment, overlooking the commitments each require. Projects, like children, need plenty of affection, attention and nurturing. The consequences when these are missing are invariably dire. The following is list of high-risk projects:
• projects where managers do not understand what’s involved
• project teams that only respect their own capabilities (difficult to work for!)
• complex projects which are beyond the ability of the managers and consultants
• projects where the SMT suffers serious attention deficit disorder
• projects run by egos rather than professional project management expertise
• projects that lack an economic rationale, where the linkage is to organisational politics not strategy
• any takeover, merger, or reorganisation project because most are doomed to failure (see Management February 2002 “Scorecard: how to avoid rotten TOM” and Management December 2002 “Beware reorganisation”).
Lesson 6: Relate the size of the contract to the risks involved
Contracts for minor assignments (less than $30,000) should be at most two-page document. In most cases an email confirmation or letter from the consultant would suffice.
Lesson 7: Don’t assume the project is ‘do-able’
Sometimes consultants have ‘forward’ books that look like Old Mother Hubbard’s cupboard. With high overheads and month or so of expensive employees mulling around in the office, any job begins to look and smell like roses. However, most experienced consultants know from the beginning when project has got ‘plague’ symptoms. They start, then commit to, dubio
