Practical Project Management

Effective use of consultants requires a manager to clearly define the company’s needs and then to match those needs to a consulting firm’s strengths. In the last issue, we talked about how to analyze your company’s needs when considering bringing in outside consultants; here we discuss the next step…

Matching your needs with the consulting firm’s capabilities

So you know a good consulting firm.
But, could you say what they are really good at? For the big firms, as an example, there is usually an account manager. The staffs that work on the projects rotate around endlessly. In most cases you don’t know them at all. The account rep is a seasoned professional with a lot of skill in presenting to and managing account decision-makers. The rep has pitched products splendidly that were both of good and poor quality.

One needs to go a level down from the interface of the consulting firm to determine what sort of analysis the firm is capable of delivering. Generally, the firm will tell you that they can “do it all” but that usually means the consultant will try to do anything. They will not normally refer you elsewhere because it could dislodge them from the first-call position.

It is up to you to determine their strongest suits as they relate to your business. Successful consultants have skills in one or more of these five value chain areas:

1. Research – The internet has changed research and has made information accessible to anyone with a computer and a connection. Research can include product, market, customer, and competitors. It can be internet, libraries, and cold calls. But the human profile of a researcher is a digger. Often a digger is not a synthesizer who can pull the important pieces into focus and draw out the key significance to your firm, but rather someone with an inherent curiosity.
2. Synthesis- Pulling out conclusions from market data is the role of the synthesizer. They are intuitive people and the best ones have a variety of experience to draw on as well. The account managers of the big firms are generally very good synthesizers.
3. Defining Market Structure and Tactics – Market structures are the relationship and rules by which companies provide goods or services to users. This is a synthesis role but includes the dimension of marketing experience in transactions with buyers as well as specific industry knowledge.
4. Business Unit Strategies – A level up from synthesis, this is the process of business unit strategy which is tactical in nature. This skill requires absorbing the unit’s capabilities and the market structure, as an example, and developing actions and projecting outcomes and competitor reactions. It is largely intuitive and requires the skill profile of general management people.
5. Strategic Planning and Restructuring – Strategic planning involves analyzing the most significant tactics as well as actions outside the normal operation of the business such as M+A, to get a business repositioned competitively. This is often a visionary role that draws on thorough business understanding and great tactical depth. Internal management plays an important role in this area and can add critical value to any study process at this point.

Most consultants and consulting firms have vastly different skill mixes.
It should be obviously impractical for a firm to use one consultant at all levels. First, why pay a top consultant to do research? Research can be achieved less expensively and you should look for a firm that provides effective but cost-efficient research. Second, an industry specific group would normally be the best for middle skill areas, particularly if the project is more technical in nature. Many smaller consulting firms have association with technical experts that they bring into projects as needed. This can provide the expertise without the on-going costs. Third, the highest value areas are best achieved with a consultant who has a high degree of industry and market knowledge, who has developed successful business tactics and strategies, and who can work with internal management to produce useable results.

Some key rules:

1. Identify what kind of consultant manager you are. Ask yourself some questions:
   1. Am I only in contact with one firm?
   2. Can I say without hesitation what type of skill they are good at and why?
   3. Have I ever checked their studies over time?
   4. Do I like having lunch with their point person?
2. Locate a variety of consultants and analyze their skills and experience. Not just the big ones, even if you are a big firm. Find some smaller resources that can do specialized work at a good value. If you do this, you should find that your consultant charges move away from expensive resources while improving the internal manager’s practical experience as well.
3. Review the capability of the consultants. This seems obvious but it is rarely done. Ask the lead person what they are best at. If they mumble away or say they can do everything, hire someone else.

Managing consulting services

So now that you know what you need and you know of a firm that does that kind of work, you can do some easy structural decisions to help manage the ongoing process:

1. Develop a stratified management system that manages your consulting contracts. Data and research fit at one level of the company and synthesis at another. Consider having the consultant engagement report, or co-report, one level above the operating user of the report.
2. If you hire a big firm, or even a medium firm, for broad strategy or a tactical project, consider implanting a team member in the study, not just a contact point but a company-funded worker. The outside consulting firm will probably hate the idea but there are great advantages here. The person needs to be a seasoned analytical employee. They can keep the consultants focusing their time on what you need, they can save them time in looking into dead ends, they can find rocks in their study before a presentation and can help figure out who to hire in the future.
3. Schedule interim reviews if needed but try to avoid them. If you defined the task well, you should want the consultants off working on it. If they like hanging around they are probably studying you.
4. Always do a private post-completion review of the consultant’s reports. Define the type of effort it was and how they did. Maintain a score card. On strategic plans, go back a year or more later as well and compare if they were right. If you kept an objective score card, I guarantee you, you would be hiring a different mix of consultants than you do now.
5. Be sure you initiate all study bid requests. Avoid casual meetings where consultants survey you for prospects. They will generally be interested in any work and therefore will circumvent the appropriate process of studying what you need done and matching it with a resource proven to provide that.

Conclusion

The ideal outcome is for your company to have a bench of successful consultants with known skill areas that have become familiar with the company and its industry. They can be called upon to respond quickly because they are already down a learning curve. They will be working on things that they are good at and not over- skilled or priced for the value level they bring.

Proactively managing consulting studies can produce better value added and synergy with your staff. Where performance is measured, performance improves. If you don’t measure your consultants’ value-added, you might be just buying a smooth pitch with a good suit and a big travel budget.

2004 © John O'Leary. All rights reserved.

About the author
John O’Leary This e-mail address is being protected from spambots. You need JavaScript enabled to view it worked 20 years as an aerospace director for a Fortune 40 firm.
His last corporate positions were in internal consulting work and managing consulting contracts at the corporate office of a major US defense firm.
For the last ten years he has worked as an independent consultant on the Defined Business Strategies’ staff.

Defined Business Strategies is a business consulting firm specializing in market research and synthesis, generally of higher technology products. The company also provides tactical and strategic development at the operational level. Mr. O’Leary works in aerospace and defense areas both domestically and internationally.

DBS is headquartered outside of Washington DC in Woodbridge, VA. Additional information on the company can be found at www.definedbusiness.com, via email at This e-mail address is being protected from spambots. You need JavaScript enabled to view it , or by calling 703-897-6523.

{mosadsense4joomla ad_layout= "A" ad_align= "left"}

Comments (1)

Name

Comment

smaller | bigger

Add Comment