Calling in a consultant may deliver solutions but you need to identify the key issues to be resolved and ensure there is a clear differentiation between the jobs of a consultant and those of management. Gillian Bullock reports.
Tales abound of management consultants called in to companies, who then fail to deliver the goods. But whose fault is it? Are there too many ordinary consultants or is it actually ordinary managers shifting the blame on to the consultants? Or is it just a plain lack of communication and understanding about the role of a management consultant?
The general view is that successful projects are those where the client and the consultant work together. You cannot simply hand the problem over to the consultant lock, stock, and barrel.
Companies must take responsibility for the decisions taken and the actions arising out of the consultancy. But the consultants must also take some responsibility. Tim Jackson, Managing Director Australia and New Zealand and South-east Asia for management consulting firm Booz Allen Hamilton, believes the onus is on the client.
“The responsibility ultimately rests with management as they selected the consultant in the first place,” says Jackson. “But at times the consultant may need to share responsibility. For instance, if the consultant knows they are in the wrong role and doesn’t walk away, then they are at fault. Or if they know a project is not going well and don’t alert you, then they should take the blame.”
Many companies use management consultants although there are a number of companies in the top 300 in Australia who either have never used one or have stopped using them.
So why do companies employ consultants? The main reason is the belief that they will bring objectivity to a problem and help solve it.
As US firm National Consultants Referrals Inc says: “A consultant should be able to see the problems without the tangle of conflicts, daily crises and problems that typically interrupt an executive.”
The key is to choose the right consultant for your individual circumstances. Ron Kemp, the Director of IIkon Pty Ltd, a West Australian-based private consulting business, believes the key to a successful client/consultant relationship is the neutral objective and viewpoint of a consultant: “as they are seeing it from a different light and are not necessarily tunnel visioned in their approach”.
With more than 10 years strategic consulting experience, Kemp says that before working to achieve a set goal, the client and consultant should re-define the original goal of the company.
“Sometimes a consultant comes in with fresh ideas, so it’s good to reassess the client’s goals and objectives before proceeding. This way you can see if they match the business’s mission.”
Kemp says client/consultant relationships can go wrong if the consultant comes in with preconceived ideas or uses a formula that has worked for them in the past.
“Consultants need to be wary of that. For example, they may have a proven formula but they should not assume that it is transparent across all business”.
Kemp says consultants can also get lazy, rather than exploring each client as a unique organisation.
He says consulting is very brief oriented and that many consultants concentrate on meeting briefs rather than focusing on the long term. He says this is an area of the client/consultant relationship that can be improved.
Booz Allen Hamilton’s Tim Jackson believes that, ultimately, the use of a consultant does not take responsibility away from the management team.
“It is the role of consultants to make the management team successful by providing a range of supporting roles,” says Jackson. “The consultant can make recommendations to the leadership team but it’s the leadership team’s role to endorse and accept these recommendations and ensure they are implemented.”
“There are a lot of people who call themselves consultants, when they are really subcontractors,” says consultant Dr Laurie Field of Field Learning, a consultancy specialising in organisational learning. “A real consultant is one who works jointly with the client where both bring in expertise and engage in a process aimed at solving a problem. When a client just dictates the solution then that’s an outsourced employee, not a consultant.”
Field talks about the two extremes of consulting. “At one end of the spectrum you have the client who is a control freak and has the solution already,” says Field. “At the other you have senior management abdicating responsibility and giving carte blanche to the consultant, who ends up in a de facto management role. The best place to operate as a consultant is midway between these extremes.”
Some of the problems in delivering a successful project lie in the constraints companies impose on consultants, both in terms of what they can do and financially.
“A project often goes off the rails when the client calls for the outside help but then gets anxious and starts putting limitations on their role,” says Field.
According to Jackson: “My perspective is that it is the role of consultants to make the management team successful. We do this by providing a range of supporting roles including:
- providing an objective external perspective;
- providing process discipline and the capability to manage complex and seemingly conflicting agendas;
- providing analytic rigour;
- applying best practice change management approaches;
- sharing global best practices and trends; and
- providing project management capabilities.
Jackson says that the consultant makes recommendations to the leadership team, but it is the leadership team’s role to endorse/accept these recommendations and then to ensure they are implemented (with or without the external assistance).
At the end of the day, the role of the consultant is to provide external challenge, advice, and support to the leadership team who have been given the responsibility to develop and implement a new strategy.
Michael Lin, Executive Director of Leadership Resources, concurs with this view. “A consultant’s brief can often turn out to be too narrow and inflexible because the client is trying to limit their investment,” says Lin. “Diseconomies result with the outcome compromised. The consultant then finds themselves in a difficult position – unable to bring together a co-ordinated approach across different levels and areas of the business which is often needed to achieve successful outcomes.
“It makes a significant difference if you have the involvement of the CEO of a company,” says Lin. “Otherwise, if you become aware you are dealing with a broader issue, then you may find you have no platform from which to work.”
He said that consultants often work in a political environment. “And the higher up in the organisation you are dealing the more politics are a reality, unless you are dealing directly with the CEO.”
The larger management consultancy firms are less likely to be faced with this issue. The partner on a Booz Allen Hamilton project, for instance, would work directly with the CEO and their team, as well as working with employees on the frontline.
Booz Allen Hamilton’s Jackson believes it is less a matter of politics within an organisation and more a question of competing interests. “People are trying to optimise results within their own division rather than see the benefits across the whole company,” says Jackson.
So what determines a successful project? According to Jackson it comes down to the successful implementation of a consultant’s strategy.
“If a fantastic strategy ends up as a doorstop and is not implemented then it is a failure in our eyes,” says Jackson.
In fact, Booz Allen Hamilton takes it a step further saying that unless a project delivers 10 times what it cost the company, then it is not a success. Central to this successful outcome is dialogue.
“Many clients pose a path to the solution rather than pose the problem and their desired outcome,” says Lin. “The solution is to get a consultant in and put the problem to them and then allow dialogue over the possible options to solve it.”
Working in isolation to other parts of a company can also be a key problem, according to NSW President of the Institute of Management Consultants, Len Ashby, who works as an IT consultant.
“Very often consultants are hired by people lower down the pecking order and in a specific department,” says Ashby. “You really need to access senior management from the CEO down to sell a recommendation. As a result we try to engage management outside of IT.”
Deloitte Touche Tohmatsu sums up how to get the most out of your consultant in its Straight Talk* series.
The consultancy firm says:
- Don’t hire a consultant when you don’t know where you are headed. Bring them in to figure out where you need to go but don’t ask them to take you there before you have figured out where “there” is.
- If your own people can do the job, then it’s better to have them do it.
Industry is now driven by customers
New industry research points to fundamental market changes.
Capgemini, the management, technology and outsourcing consultancy recently released details of a survey The Voice of the Customer looking at the perceptions of clients in the consulting industry.
The research illustrates that the consulting industry continues to undergo considerable change, with the shift now being driven by clients. Clients highlighted five key areas where they believe the industry needs to change:
- Talent. Clients perceive a decrease in talent within consultancy firms below the senior level.
- Communication. Clients see consultants as more often being in the “telling” mode rather than listening, resulting in a tendency to introduce pre-ordained solutions.
- Objectivity. Clients value a consultant’s ability to offer an objective perspective, but often consultants start identifying too closely with the client’s culture and lose perspective.
- Reality. Clients are looking for solutions that are achievable, yet recommendations from consultants are often too optimistic or complex.
- Goals: Clients want value, consultants want profit.
Clients want a relationship with consultants that is responsive to both parties needs, and where success is agreed upfront and measured to ensure success for all.
They want advice that is honest and respect for what both parties bring to the table. In short, clients want consultants that work in a collaborative manner.
“The consultancy industry has been in flux in recent years. It’s now clear that client demands are different. Companies that listen to clients and take on board what they say, will capitalise on the market, says Capgemini Group CEO, Paul Hermelin.
When defining the criteria for selecting consultants almost all clients mentioned their track record, technical and industry knowledge, and value for fees. Indeed these are seen as basic capabilities that all key players must have. Increasingly selection is being made on the softer skills; ability to collaborate with the client’s team, reputation for delivering, and understanding the client’s business.
“Given that almost a quarter of the respondents said “collaboration” was a key criteria for them, future success in our industry will be defined by how collaborative you are,” continued Hermelin. “This is a clear change for the consulting industry, I’m pleased that Capgemini is leading the way. A collaborative approach offers faster, better, and more sustainable results for all participants.”
Other results from the client research showed:
- Clients cited revenue growth and cost containment as their two current top priorities, with improved IT effectiveness as the third priority.
- Regulatory and security issues, whilst currently low priorities, are high on the list of future challenges.
- Almost all executives highlighted some kind of delivery failure as their biggest concern in hiring external consultants. However there were also concerns expressed by executives about loss of key personnel, recovery from error, and budget overruns.
Drivers for success
According to Booz Allen Hamilton’s Managing Director Tim Jackson there are eight drivers of success in management consulting:
- Clearly defined objectives and the alignment of all the key decision makers about these objectives. Unless you are very clear about your objectives and everybody agrees, then the consultant may end up answering the wrong question. For instance, if your objective is to strive for a 40 per cent improvement in performance, this may translate to a 40 per cent head count reduction for some and a 40 per cent improvement in customer service or in process efficiency for others.
- Clearly defined roles and timeframes. You need to understand the true value add of using a consultant. Often they are used in the wrong roles and do the work management or line management should be doing. You should have checkpoints to find out if the consultant’s role is still value adding or if the line managers should be picking it up and running with it.
- True partnership. The consultant must work with you – not for you (where you would be abdicating responsibility) nor do it to you (where the consultant controls the project and the agenda). The consultant must be in it for the long haul and be committed to drive the results through to implementation. For most projects, diagnostics should take six to 12 weeks on average while implementation should take three to 12 months.
- Consultant must be exceptional at change management. A consultant should have a true sensitivity to your front-line otherwise the strategy will end up as a doorstop. It is probably true that about half of all consultancy projects conducted in Australia end up not fully implemented while about a quarter are not implemented at all.
- Choose the right consultant. You wouldn’t drive a tank in a Formula 1 race nor go to war in a Ferrari, so don’t use a consultancy firm outside their strike zone. To find the right consultant talk to your peer companies about whom they have used and why; then use a rigorous selection process calling for invitations from a number of consultants on how they would approach the issue. And check the overall value of the project – don’t select purely on price. [Many companies find a consultant through word of mouth, however the Australian Institute of Management can provide consultancy services or suggest a suitable consultant (see page 47).]
- Develop a long-term relationship. Don’t chop and change consultants to solve the same problem otherwise you will waste a great deal of money going over the same ground. Long-term relationships allow the consultant to understand the agenda and eliminate the need to recollect data.
- Objective measurables and objective review process. If you cannot objectively measure the value then you cannot gauge whether the project has been a success.
- Ability to work at all levels. Management consulting is not only about dealing with the key decision-makers but also about drilling down to the front-line.