Why You Should Not Hire a Management Consulting Firm...at least not yet.

Asking for help is never easy to do. Sometimes receiving help is even harder. Depending upon the scope of the management consulting engagement, getting consulting assistance can feel very intrusive at first. Along with some initial excitement among senior management and key staff, there is usually a degree of F-U-D mixed in as well.

Fear:

Getting outside help can create fear in the minds of managers and employees alike. What if these guys are like “the Bobs” in the movie “Office Space”? Will they forever change all that was good about the company?

Uncertainty:

Second-guessing ourselves is human nature. This is especially the case after making a big decision.

• “What if I didn’t select the right management consulting firm?”
• “Can any outsider come in and actually help us?”
• “If they are not specialist in our industry, can they really do more than we can do ourselves?”

Doubt:

“I wonder if we’ve been wrong in our strategy all along. I don’t want to tell them everything that is really going on here if it might make our management team look bad. Maybe we can just see what they discover things on their own and see what they come up with.”

These misgivings are of course natural and to be expected. Some of us probably have buyers remorse after purchasing a new big screen TV, but we know it will make us happy in the long-run so we stick to our purchase decision. This is not to imply that every company is suited to be on the client-end of a management consulting engagement. Not all organizations possess the fearless leadership and commitment that is needed to undertake a critical evaluation of their business, even when their intent to make the organization better through change. Why would we say that, you may ask? Because there are certain characteristics that companies need to have before working with a consulting firm in strategic management projects.

Are You Really Ready?

What attributes make an organization suitably equipped to work with a management consulting firm? Let’s consider several of the important traits, including being:

• Open, honest and transparent with themselves and their consultant
• Receptive to critical evaluation
• Receptive to change
• Willing to put in the effort & time it will require
• Willing to provide the leadership support

Without these traits, it may not be a good idea to even begin such an initiative. Let’s consider them one at a time.

Transparency:

Consider the openness of your attorney relationship or other professional that you have selected to provide their own respective expertise. Your management consultant, like your doctor or your attorney, needs the truth. How much help would they be without open disclosure from you? You’ve got to give them all the information for their advice to be on target. The internal stuff that the company doesn’t talk much about must come out into the light in order for the consultants to assimilate a clear picture of all facets of the company - how it works and why it doesn’t in some cases. Opening up about your dirty secrets can be a little embarrassing, even humiliating. When you are trying to improve, that’s not such a bad thing though. Admitting and understanding your shortcomings paves the way for change and improvement.

From the consultant’s perspective, this “openness” can also be a difficult aspect. The management consultant must ask probing questions and risk touching nerves without the use of novocaine to numb the patient. The consultant must openly discuss findings with the client’s executive team that sometimes reveal individual or group weaknesses. For consultants, it never becomes easy to deliver bad news. The consultant must sometimes discuss difficult challenges with the client and reveal to them the need to make painful changes. It goes with the territory. When bad news has to be shared with client management, it is the fiduciary duty of the management consultant to do so. That said, it does not mean news has to be delivered without compassion. Management consultants know to expect reactions from clients - whether it be anger, frustration, surprise or disappointment. The tough news should be packaged with explanations of the findings, suggestions and a recommended action plan. Clients should expect the upmost in professionalism in such circumstances.

Accepting Critical Evaluation:

Regardless of these challenges, the reason companies hire management consultants in the first place is to be honest, to critically evaluate, to make recommendations and help plan and orchestrate change. It is the management consultant’s job to assimilate the right information needed to help make improvements in their client’s businesses. That generally entails getting very intimate with the client’s culture, leadership, market perception, challenges, and opportunities.

It is not alway bad news. Management consultants certainly see the good as well, but their concern with the good elements should be focused on protecting and preserving what is working. Easier said than done, but critical to pull off 100% of the time.

Receptive to Change:

Once your consulting firm has completed their analysis and presented you with their findings and recommendations, is your organization willing to make the changes the consultant has outlined? There is an old saying that “nobody likes change except a wet baby”. Not all management consulting engagements result in changes being recommended, but what if they are? It would not make sense to go through the expense and effort of working with a consultant if the leadership and management are not open-minded about implementing strategic changes if they are called for.

Willing To Work Hard?:

The management consultant will certainly do the analysis and heavy-lifting behind the scenes, but efforts like strategic and operational planning demand executive and mid-management’s time and attention. Restructuring engagements call for tough decisions by the leadership team and sometimes require arduous meeting schedules. The organization must commit the necessary bandwidth of the executives, mangers and staff. Consideration of the impact on the schedules of key personnel should be weighed carefully so that roadblocks to progress do not emerge mid-way into the engagement.

Strong Leadership Support:

Commitment to the engagement from top leadership is a must if the outcome of the engagement is to be successful. The executive champion must be the engagement’s sponsor, “roadblock removal specialist” and internal cheerleader. The support of leadership is critical in removing obstacles for the consultant and will doom the effort if it is missing.

If you are still thinking of shopping for consulting help, how do you pick the right firm?

Here Come “The Bobs”: Avoiding Buyers Remorse Selecting a Management Consultant

In selecting a good management consulting firm, it is critical to evaluate the consulting company’s ethics and core values in tandem with exploring and understanding the approach they will take in helping your organization achieve the outcomes you’re looking for.

Character:

Ethics and core values are essential ingredients to explore, as they relate to the honesty and integrity you’ll rely on to put your organization’s needs ahead of their own. Get to know them. Understand a bit about their own culture and values. 


Process:

During this interview process, probe into their process and understand how their approach will map to your needs. A thorough consulting process should reveal a number of elements you may never have considered, but are useful and value-add beyond original expectations. Cultural analysis and change management are examples.

Pricing:

When it comes to selecting a firm from the alternatives, one of the first considerations for most companies is price. Pre-defined budget constraints may drive much of the selection process if firms are priced beyond the target budget you were considering for the consultant. When reviewing pricing, evaluate if the services outlined by the consultant seem reasonable and well targeted to your needs. Does the timeframe to deliver the services look realistic? Assessments of “real” value become more important than dollar-for-dollar comparisons of price, so be mindful that you do not want to enter into an consulting engagement that appears lower in price than the alternatives, but may not be offering as much. Level the playing field by doing a value-to-value comparison.

It Takes Time: Managing Your Management Consultant

Let’s suppose you have decided that you are indeed ready for outside help from a management consulting firm. You are prepared for the effort and understand that it will require time from you and your staff. You have selected the firm you feel best about among the companies you reviewed. Now what.

• How will you evaluate if your management consultant is doing a good job?
• How will you determine if you are getting your value?

Your consulting firm should provided a detailed Statement of Work (SOW) that outlines the services to be provided along with a description of deliverables to be produced and assumptions made on their part related to timelines, cost, etc. Performance against the SOW is the cleanest way to evaluate the consultant. The quality of work produced early on should be a good indicator of the value their work will provide. Granted, it may take time for the consulting team to produce the early-stage work product, but so long as they are on schedule, professional and working diligently on the tasks their process requires, give them the benefit of the doubt. You will form an impression quickly based on how they interact with your staff and how prepared they are for each meeting, workshop, interview or presentation.

It’s Your Call

Let’s face it, there is a lot of complexity to manage in strategy formulation and implementation, whether you are the CEO or top executive reporting to the CEO. There is no shortage in the supply of consulting companies that serve businesses in strategy or operations management. Outside consultants can be a huge help, given the right marriage between client and consulting company. Consultants can provide a rich process and the structure to analyze and understand the intricate relationships of the organization. Outside consultants have the unique ability to call it like it is and are paid well to do it. It is the consultants job is to understand the intertwined fabric of the client organization and map out the client’s business eco-system efficiently in so as to evaluate it and leverage it and improve on it.

This requires brutal honesty between the executives at the client and the consultants. It also requires a strong trust relationship. In the absence of openly exchanging business truths and being receptive to change, help by way of an outside consultant is an illusive endeavor that will leave both parties dissatisfied.

The consultant must fully understand the client management team’s core competencies in order to help them develop strategy that can be implemented and will deliver the desired outcomes. Inevitably, there is baggage to sort through and deal with. This has to be done so that it does not undermine those core competencies or stand in the way of operationalizing the strategy. The consultant sometime must function as a psychologist, asking the right questions and listening very carefully to the answers.

Most importantly, the consultant must have no fear when entering into sensitive client territory and delivering business truth to the executives that have hired them. To have fear and be less than completely authentic and truthful undermines the consultant’s ability to help the client. Therefore, the consultant must allow themselves to be vulnerable and never shy away from the difficult situations and conversations that must take place.

Not all clients are cut out for working with a management consulting firm and by all means, not all management consulting firms are cut out to work with every client. One of the keys to selecting the right firm is to pick a company that you feel will honor the code of honesty and integrity that must be practiced by the consultants working in your business. Management consulting firms must likewise select their clients carefully or risk taking on a client that does not really want the help they’ve asked for.

Are you ready to hire an outside strategy consulting company?

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