By JIM MILLIKEN
Association for Consulting Expertise
What do you want? What’s it worth?
“When you’re thinking about bringing in a consultant, your eye should be on the prize,” says David Fields, the international mentor-consultant and best-selling author. “How do you expect to be better off at the end of this – and what is the value of that?
“That’s a different conversation than ‘How do we have you work on this for $40 an hour?’ –which is about cost.
“The project is aimed at solving a problem or achieving an outcome. That should be the focus of all the work and all the contracts and all the rest.”
Fields, who wrote “The Executive’s Guide to Consultants,” is a prolific presenter and blogger, as well as a writer and consultant.
He was interviewed after his recent presentation to Maine’s Association for Consulting Expertise. The ACE program was aimed at advising consultants. This interview explored the other side of the relationship – the client.
It is a mistaken tendency of many executives, he said, to look at cost up front (Wrong!”) and to compare a consulting fee to employee salaries: “Why, I could hire four fulltime employes for that.”
Fields answers: “That’s an apples-to-Oldsmobiles comparison.
”You’re hiring a consultant to help you solve a problem or achieve an aspiration, and the value they’re supposed to be delivering, compared to the value full-time employees would deliver is what you should compare. Across all industries, the average return on labor costs is around 6-to-1, so if your consultant is giving you more than a 6-to-1 return that’s a better investment than an employee. (Keep in mind also that a new employee would have to deliver that 6-to-1 return every day, month and year you have them employed.)
“Before the person even talks to a consultant, have they figured out the value of the project? The first thing they should do is answer the question, ‘Why bother?’ What’s the reason to bother – solving the problem or achieving the aspiration – and what’s the value?”
They should determine whether they really need outside help, he says.
Mistakes are made both ways: “They often can get close enough without that help – they can get 80 to 90 percent there – all they really need. It matters because consultants are disruptive.
“On the other hand, people frequently do things on their own that they shouldn’t. They should go to the outside if it is not in their core expertise. This is especially true with small companies, and even more when the founder is involved. It’s hard to bring in an outsider.”
When there is a considered decision to hire a consultant, Fields says, the first thing the client and consultant should do together is thoroughly examine six topics:
- 1. What is the situation? Specifically, what has changed and why does the client need outside help?
- 2. What’s the desired outcome? Fields urges care to ensure that a simple deliverable is not mistaken for an outcome. If communication training is conducted to cut down on outcome errors, improved communication does not mean the desired outcome was reached if the errors are still happening.
- 3. What are the success indicators? How will you know you have achieved the outcome? This should be settled at the start. There can be qualitative indicators (improved confidence on the part of executives) as well as quantitative indicators (cost control, schedule improvement).
- 4. What are the risks and concerns? There are threats to the project that must be considered, but also risks in bringing in a consultant.
- 5. What is the value? What hard and soft benefits will the solution or achievement bring to the client’s company, its employees and its customers?
- 6. What are the parameters? These are the limits, assumptions, etc.
What if the project doesn’t go well? “I place the blame on the client,” David Fields says. “The client didn’t hire well. In most cases, clients do a lousy job hiring consultants. Just as with marketing, not as easy as, well, just anybody can write copy. Not so – there are some best practices that you need to follow.
“I do put some blame on consultants. They’re the ones who let this go ahead.”
One problem is that clients “tend to hire people who are experienced in their situation, instead of someone expert in the outcome. You already have the experience in your organization. You need someone expert in where you want to go.
“You shouldn’t look for someone who has been a scorer in a particular sport. You need someone who has scored goals in a variety of sports. Or no sport at all – but has a talent for team energy, who can bring that to everyone.
“You need someone who knows how to help coaches communicate with players.”
David Fields looks for the vision and skills that account for the broad scene, anticipate possibilities of all kinds and ask lots of questions before formalizing a project.
He provides a dash of cold logic based on taking that approach:
“Everyone thinks their situation is unique – client and consultant. Not so. None of us is unique.”