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Human Capital | Management Related Services:

How to Hire & Manage Consultants

While you might be lucky enough to survive in business with little or no advice from others, you will certainly not maximize your potential for success by doing so. All CEOs and entrepreneurs need advice in a wide variety of constantly changing areas…That said, I’m always somewhat perplexed as to why people hire certain professionals. The nature of my business is that I often succeed other advisors who have failed in their assignments, and I have witnessed first hand the carnage that can occur from unsuccessful engagements/implementations with third party professionals. So, in today’s post I’ll share some thoughts on both selecting and managing outside advisors…

Even though many of the CEOs and entrepreneurs reading this next sentence won’t agree with my conclusion, I am nonetheless obligated to share the reality of what is most often times the harsh truth…When you engage a professional advisor, the outcome you receive will most often times be the outcome you deserve. You see, as with any other profession there are excellent practitioners, middle of the road journeyman, well intended light-weights, and brilliant academics with no practical experience or common sense. The reality is that if you hire someone who doesn’t meet your needs, the fault rests with you.

Making things even more complex is the fact that talent, while clearly an important consideration, is only one factor in determining whether your engagement will have a successful outcome. A smart advisor doesn’t necessarily translate into a good advisor. Just because someone possesses an advanced degree doesn’t mean they have any practical experience. Most consultants don’t graduate from business school with any real world business experience. Furthermore, the real world experience they do possess may offer little benefit or applicational value to your specific circumstances. It is imperative that you select advisors who are not only a subject matter experts in their practice area, but that also possess solid business acumen and a bit of savvy. I have a very simple rule that I’ve followed for years in evaluating whether or not to hire a consultant: If an advisor is not fluent in my business, they won’t be retained by me to represent my business…end of story.

As nice of a thought as it might be, the reality is that you cannot just hire an advisor and expect all of your problems to be solved. As a C-level executive you should be bright enough to realize that if you turn the asylum over to the lunatics, chaos will certainly ensue. At the risk of enraging many in my profession, consultants and advisors are not superheroes, they are role players. Now mind you, the role can be of a complex or critical nature, but it is still just a part of the equation. The outcome of your engagement will be largely be dependant upon the following items:

  1. Problem Identification: You’d be surprised at how many executives retain professional advisors to either solve problems they can’t even define or articulate, or worse yet, to provide a solution to a problem or challenge that doesn’t even exist. If you don’t know what you’re trying to accomplish, how are you going to direct and manage an outside advisor. Moreover, how are you going to assess whether you are receiving great advice or flawed counsel? Don’t engage an advisor unless you know specifically what it is you are trying to accomplish.
  2. Selection: Did you hire the right advisor for the right reason? The first step in the selection process should not be based upon talent, price, availability, geography, past track record, etc. Rather it should be based upon value alignment. Do the consultants engaged share your values, understand your culture, understand your market, and understand your objectives? If not, their track record and their solutions will be meaningless. I can’t tell you how many times I’ve witnessed companies select advisors who were “high-powered” or “trendy, hip, and avant-garde” only to find their recommendations to be nothing short of a train wreck because they were not consistent with the values of the client they were supposed to be serving. Why would you ever let someone tinker with your brand, your credibility, and your business who didn’t share your values? Trust me when I tell you that if you do, you’ll regret it…
  3. Cost: Hire the best practitioner you can afford, not the cheapest you can find. As with any profession, there is value in experience and knowledge, as well as a competitive advantage to be gained with talent, reputation and connections. Never hesitate to get a second opinion as there are very few stock answers to any business issue.
  4. Accountability: The best way to manage your engagement risk is to be proactive not reactive. Assess your risks and take aggressive and proactive measures to mitigate said risks by being actively involved in the management of the engagement. As a principal owner or senior executive the buck stops with you. You need to manage the advisorand the process to the best possible outcome, and this cannot be accomplished with a passive management style. You can either manage the engagement process or let it manage you. Make sure the project deliverables are clearly understood, and that a plan with benchmarks, milestones and deadlines is put forth outlining how to reach said deliverables.

So how do you know if the advisor you’ve hired is as good as they say they are? Match-up their rhetoric with the following warning signs:

  1. Beware the Part-Time Expert: My father has an old saying that I’ve found to be very accurate over the years: “part-time efforts, yield part-time results.” If the person seeking your business has a day job that constitutes something other than the services he or she is pitching, run for the hills. If your potential advisor is moonlighting then they really have no business asking for your business.
  2. Beware of those with no Social Presence: If you want to get to know someone, do a little social snooping. If you don’t like how an advisor engages online, you probably won’t like what you see when you get face to face. If your would-be advisor cannot be found online, doesn’t blog, tweet, or is invisible on the major social networking platforms you might want to rethink their qualifications. Important Caveat: the mere existence of a website, blog, YouTube channel, LinkedIn profile, Facebook account, or a Twitter page doesn’t guarantee competence…anyone can amass thousands of followers on Twitter – those with a large following on Twitter often just follow-up to the Twitter maximum, wait for others to follow them back, delete the others and then repeat the process. Look for someone who has amassed a quality list of followers, who has more people following them than they follow, and who actively engages with their followers.
  3. Beware the Expert without Clients: No referenceable clients equals zero credibility. Your position should be one of “don’t tell me – show me.” It’s one thing to show you their own work, but quite another to show you demonstrated success on behalf of paying and satisfied clients. Equally as important, have they served clients similar to you? Have they served clients who have already been where you want to go? Don’t let someone cut their teeth on your business. Experience counts.
  4. Beware the Expert without Industry Recognition: Good advisors cannot remain in stealth mode. Talent can’t hide, because news of performance spreads. If your so called expert doesn’t have a professional body of work you may want to think twice. If your expert isn’t referenced as such by credible, independent third parties, isn’t published, doesn’t speak, lecture or teach, hasn’t received any industry recognition, etc., then they might not be a true expert.
  5. Beware the Expert too Aggressive in their Pursuit: There is a big difference between professional follow-up and desperation. Let me be blunt…most professionals at the top of their game haven’t made a cold call in years. In fact, even in this down economy they typically have more business than they know what to do with. If your world-beater of a consultant is chasing you down like a hungry dog after the meat wagon then you may want to take pause.
  6. Beware of Bargain Basement Expertise: In most cases the reality is that you get what you pay for…True expertise doesn’t come cheaply, but is well worth the investment. Few things in business will get you in as much trouble as not getting advice and counsel when needed, or worse yet, getting poor quality or incorrect advice. I would much rather pay an expert a larger fee for 30 minutes of their time and get what I need rather than pay someone $50 dollars an hour who is hoping to fake it until they can make it…Questionable advisors will take much longer to get from point a to point b (if they get there at all), and will likely cost you more money at the end of the day when contrasted with true professionals.

As a consumer of professional services, the phrase “Caveat Emptor” (Let the buyer beware) applies in spades. If you take an informed and proactive approach to managing your engagement risk you will fare better than those who don’t. A plus might just be that if you hire the right advisor for the right reasons, you may in fact end-up developing a strong personal and professional relationship that won’t end-up as subject matter for another horror story or consulting joke.

Thoughts?

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    Wally Bock

    June 29, 2011 at 5:16 pm

    Great post, Mike, and I speak as a long-time consultant and
    user of consultants. I only have one thing to add: trust your gut. No matter
    what your head says, if your gut says “No,” it’s probably right.
    Great consulting engagements grow from chemistry and trust as well as expertise
    and process.

      Avatar

      Mike Myatt

      June 29, 2011 at 9:03 pm

      Hi Wally:

      Thanks for sharing the wisdom of experience. The only thing better than a good gut instinct is a good gut instinct underpinned by a framework for decisioning:)

    Avatar

    Mark Oakes

    June 29, 2011 at 5:37 pm

    Mike

    This is an excellent summary. You’ve covered all the main points and anyone who follows this advice is sure to increase their chances of success. I don’t have anything substantive to add…but do have a couple of off-the-wall thoughts about context (note I didn’t say answers :-))

    We’ve now migrated from the ‘industrial era’ to the ‘knowledge era’. Yet much of our thinking is still deeply entrenched in rules, norms and expectations that are industrial-based. For instance, many leaders/managers mindsets are still fixed on watching the clock and equating employee/subcontractor ‘time worked’ as the principal unit of value. It’s more comfortable using tried and true metrics and accounting-driven units of work that can be tracked on the P&L. Yet we stuggle defining off-balance-sheet items like intellectual capital, goodwill, etc. With this in mind it’s no wonder we have failed engagements. We still don’t have reliable metrics that span the two eras. Clients and consultants are often speaking different languages when it comes to defining value. As such, we settle for “Just Fix My Problem”, cross our fingers and use ‘Hope as a strategy’. Unfortunately, the value of a consultant’s knowledge is often not known until they’re gone (e.g. their recommedations were implemented and worked)

    Study after study have shown that it is VERY difficult to measure knowledge worker productivity. This leads to frustrations in the workplace and (for the purposes of these comments)with consultants. If we don’t have a way to accurately measure the intangibles of ‘knowledge’ productivity, we have to go through a number of gyrations to approximate something that our minds call ‘metrics normalcy’. Yet, the simple fact remains…we still don’t have a reliable way to measure knowledge as the unit of value.

    In short, if we’re hiring knowledge-era problem solvers and using industrial-era metrics, we’re going to have problems.

    Mark

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      Mike Myatt

      June 29, 2011 at 9:01 pm

      Hi Mark:

      Great thoughts – it’s not the amount of time you spend on the job, but what you accomplish during that time. I like to measure things like engagement, contribution margin, utilization, return on innovation, customer experience, etc. Anyone can measure static historical metrics, but few find the real pulse of their workforce…Thanks for sharing Mark.

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    Mike Myatt

    June 29, 2011 at 9:05 pm

    Great thoughts Mark – I’ve often said “collaborate don’t abdicate.” What advisors and clients can accomplish together is always better than results produced when one party is missing in action. Thanks Mark.

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    Tanveer Naseer

    June 29, 2011 at 9:42 pm

    Hi Mike,

    The common thread I see from your post to the comments it has generated is importance of recognizing that it’s a relationship you’ll be engaging with when hiring a consultant, as it should be.

    I think part of the problem is that some leaders just assume that they point out the problem to the hired consultant and then ask them to fix it, much as you would point out a leaky faucet to a plumber and leave it to them to figure out the best way to repair it.

    Another excellent and upfront post, Mike.  I think both companies and consultants will be grateful to you for helping to clear the air.

      Avatar

      Mike Myatt

      July 5, 2011 at 4:59 pm

      Hi Tanveer:

      Thanks for the astute observations and kind words. I appreciate your comments.

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    Mike Henry Sr.

    July 2, 2011 at 3:55 pm

    Great post Mike.  I agree with most of your post.  Consultants need references, in your particular area of need.  They need industry credentials.  They need social presence.  As always, I appreciate your passion to address the less-considered challenges of our biz.

    Two things that I also thought… One, they also need to have actually done something.  Especially back in the telecom boom, many consultants were in organizations that had done something, but their only credentials were that they were associated with experienced consultants.  Beware the consultants who move in packs.  Card the individuals for actual accomplishments.

    The second thought is about social media.  The measure of social presence is more complex than simply following-to-follower ratios.  it requires more work, but look for relationships.  However if you’re in an industry where few are online, I know some qualified consultants who are behind the curve in the social arena to date.  But everyone should be aware what kind of reference Google is.

    Thanks again.  Mike…

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      Mike Myatt

      July 5, 2011 at 5:02 pm

      Doing something? You mean consultants should actually have a track record of having accomplished something? This is an obvious, but nonetheless often overlooked area of criticality. If your consultant has never done anything other than consult, be very, very careful. Thanks for sharing Mike.

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    Erin Schreyer

    July 5, 2011 at 12:57 pm

    Great post, Mike!   I agree with your thoughts and likely share puzzling moments with you when I lose a project simply to the “lower price.”  It doesn’t make sense.

    One thing I would add relative to the social media presence on LinkedIn are client recommendations.  Potential clients should look to see if former clients of their consultant are willing to post public recommendations…and don’t look just see if they are posted, but read specifically what they say.  Why did those former clients feel like the consultant was successful?  How did they provide value?  What was unique to them…and could you benefit from those things too?

    Avatar

    Erin Schreyer

    July 5, 2011 at 12:57 pm

    Great post, Mike!   I agree with your thoughts and likely share puzzling moments with you when I lose a project simply to the “lower price.”  It doesn’t make sense.

    One thing I would add relative to the social media presence on LinkedIn are client recommendations.  Potential clients should look to see if former clients of their consultant are willing to post public recommendations…and don’t look just see if they are posted, but read specifically what they say.  Why did those former clients feel like the consultant was successful?  How did they provide value?  What was unique to them…and could you benefit from those things too?

      Avatar

      Mike Myatt

      July 5, 2011 at 5:09 pm

      Hi Erin:

      You are spot-on in pointing out that references are a very important part of the engagement process, and in the world of social media the process becomes even more essential. While we’re on the topic of references, one thing I always ask for is a negative reference. I want to see how a vendor handles themselves when things don’t go well. Thanks for stopping by Erin.  

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    George

    September 4, 2011 at 4:49 am

    Excellent post. I only recently found your blog and have found it invaluable, and am currently reqding your book. I’m a middle manager at a company that is suffering badly as a result of poor consulting advice. Your statement “As a principal owner or senior executive the buck stops with you. You need to manage the advisor and the process to the best possible outcome, and this cannot be accomplished with a passive management style.” is interesting because that is the management style our consultant professes. Our owner/CEO wants to delegate everything to the lower level management under the guise of self-management.

    After more than seven years of this “expert” advice we’re almost out of business. This posting and a few others have reqlly hit home!

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