Chapter 17: Sensible Use Of Consultants
Chapter objectives
In this chapter we shall:
- Sketch out various consultancy roles and commend some of them.
- Try to be objective, given that we are consultants who aspire to be used sensibly.
- Set out some consultancy industry guidelines.
- Interpret those guidelines for use of consultants in the not-for-profit sector.
Consultancy roles
We need to declare a potential conflict of interest before discussing the sensible use of consultants. We are both directors of Z/Yen Limited which is a risk/reward management practice. One of our specialisms is to provide strategic, process and IT systems consultancy for the not-for-profit sector. This specialism at the time of writing accounts for about 25% of our advisory business. We nevertheless feel qualified and able to advise the reader on the sensible use of consultants.
There are 4 consultancy roles commonly used by not-for-profit organisations:
- Body shopping.
- Strategy consultation.
- Organisation fool.
- Process consultant or specialist.
Body shopping
When you know what you need to do and you know how to do it, but use third party 'consultancy' help anyway. In other words, you are merely overcoming resourcing problems by using consultants. In certain specialist areas (IT, at times, being one of them) this might be the only way you can find appropriately skilled resource. However, as we argue in this and the next chapter we believe that not-for-profit organisations should seek to minimise this type of use of consultants. This is best achieved by ensuring that sufficient people are trained and able to use the IT without needing to "body-shop" in expert resource much if at all. There are times when the use of resources in this way is unavoidable, indeed the current authors' practice, Z/Yen, makes a fair proportion of its living this way. However, we believe that body-shopping is a sensible use of consultants short term. We encourage clients, especially in the not-for-profit sector, to acquire medium to long term self-sufficiency as quickly as possible.
If you don't know what is needed, but would know how to get whatever it is done once you knew, you are likely to use a strategy consultant to help you to work out what is needed. This can be a sensible use of consultants and not-for-profit organisations will often sensibly engage in medium to long term (but far from full time and therefore relatively inexpensive) relationships with consultants to provide strategic input at key times and/or in key places. In the IT area, this tends to manifest itself in the form of IT strategies or strategic reviews of specific aspects of an organisation's IT.
If you neither know what is needed nor how to do it, and choose to use a consultant to find out, you are using that consultant in the role of organisational fool, in the courtly sense of a fool. Occasionally it can be useful to get a third party to "hold a mirror up to your organisation's face" and help you to generate ideas. Indeed, some large corporate organisations use consultants, including the current authors, in this way a lot. We believe that this use of consultants can only be sensible for not-for-profit organisations short term.
If you know what is needed but don't know how to do it, you tend to need a process consultant or specialist of some kind. This is probably the most common use of IT consultants in the not-for-profit sector. This can be a sensible use of consultants and not-for-profit organisations will often sensibly engage in medium to long term (but not extensive) relationships with consultants to provide specialist IT and/or process input at key times. This type of use often manifests itself in using consultants to help with the scoping, specification, tendering, evaluation and selection of systems. It also tend to encompass project management and/or quality assurance of implementations, post implementation reviews, IT resource studies and IT financial planning.
Choosing and using consultants sensibly
To give this part of the chapter an acceptable level of independence, we shall in large part rely on Institute of Management Consultancy (IMC) guidelines (published with permission below) on how to choose and use management consultants to advise you. These guidelines set out ten golden rules for choosing and using consultants (both sole practitioners and consultancy practices) effectively. We set out those rules in the following table together with the IMC notes and some specific comments of our own for readers of this manual based on our experience and judgement.
Table 20.2
| IMC Golden Rule | IMC Notes | Specific comments for readers of this book |
| 1. Clearly define the objectives that you hope to achieve. |
Describe the job you want done and specify the things you expect from the assignment; Understand precisely how you expect your business will benefit from the work; Decide on the timescales, scope and any constraints on the assignment; Clarify your own role, which key staff will be involved, and how their time will be made available |
benefits might not always be measurable in financial terms, but you should nevertheless seek to define tangible success measures; unclear terms of reference is one of the most common reasons for not-for-profits relationships with consultants to go wrong although good consultants should help you to define the objectives and scope, the onus is on you to ensure that they are appropriate for your organisation |
| 2. Consult with others in your organisation to agree those objectives. |
consult with appropriate fellow directors and managers on the nature of the problem; jointly define your specific needs for the expertise you want. Is it a systems, human or skills problem?; you may decide that you require regular "hand holding" discussions or counselling sessions with the management consultant rather than a defined assignment. Many clients obtain considerable value from scheduling assistance in this way - but make sure you still have a written fee quote and terms of reference |
the “hand holding” discussions approach is often an appropriate one for not-for-profit organisations with limited budgets and a desire/need for skills transfer normally not-for-profit organisations should avoid "handing an entire problem over" to consultants. Although this might seem a good way to solve short term resourcing problems, it can often lead to the relationship becoming protracted and therefore excessively expensive unnecessarily |
| 3. Short-list no more than three consultants, and ask them to provide written proposals |
make sure you ask only such consultants to quote for the work as are qualified to carry it out. The Institute of Management Consultancy has a Code of Conduct which requires its members not to take on assignments for which they are not qualified; if you do not know a suitable consultant, ask the Institute of Management Consultancy. We run a free Client Support Service that can put you in contact with a number of qualified consultants or consultancy practices. Potential consultants will be happy to send you basic information about themselves and talk with you about your needs, without charge; invite the consultancies identified by IMC to submit written proposals, which should include: their understanding of the problem, the brief, names and CVs of the consultant(s) who will do the work, experience of the firm, references, other support provided by the firm, work plan and timeshare - Reports and/or systems that will be supplied to you, fees, expenses and schedules of payment; the inputs required from you |
not-for-profit organisations often assume that they require a great deal of experience in their organisation's specialised field, whereas usually you do not need that experience from the consultant, as you have that specialist knowledge yourselves; we believe it is beneficial to not-for-profit organisations that the chosen providers of consultancy expertise have significant experience working in both the voluntary sector and other sectors, so that the consultants understand the culture and financial constraints of the voluntary sector while providing you with a breadth of skills and experience |
| 4. Brief the consultants properly. |
prepare a concise brief which clearly defines the objectives, scope, timescale, reporting procedure and constraints of the project and agree it with others in your organisation who will have an influence on the outcome of the project; remember that the cheapest quote will not necessarily give the best value for money and the fees of your preferred consultant(s) may be negotiable |
do not compare costs solely on day rates, but also consider defined benefits (what outputs are you going to get for your money) and quality (people who take three times as long to do a task are often not the highest quality people for that task); you should ensure that you agree a fixed maximum fee or at least a capped budget for a defined scope of work |
| 5. See the individual consultant who will do the job and make sure that the 'chemistry' is right. |
successful consultancy requires goodwill in human communications. Meet the consultant(s) who will be doing the job and brief them well, using the written brief and any background information that you or they think necessary; talk through your chosen proposal with the consultant before making a final decision to ensure that you have any concerns answered. If you are not happy with any aspects of the proposal do not feel pressured into accepting them. Continue discussions with the consultant until full agreement on the proposal can be reached; select the firm or individual that you feel has the best qualifications and experience and who you feel you can work with comfortably. |
it is sadly common in many instances that not-for-profit organisations only get to see a principal of the consultancy during the consultancy sales process; in our experience, not-for-profit organisations should usually expect a principal to be providing 10% to 25% of the consultancy effort involved; last minute team changes are an occasional fact of life, even from the best practices – your organisation should nevertheless have a right to vet and veto rather than have team changes imposed upon you; working with sole practitioner consultants is often appropriate for not-for-profit organisations, but do bear in mind the risks inherent in relying on just one person |
| 6. Ask for references from the chosen consultant(s) and follow them up. | ask the firm or individual chosen for names or written references from former clients in order to verify the consultants' suitability for the assignment | the not-for-profit world is a fairly close-knit community and reference taking often takes place informally – nevertheless it does make sense as a courtesy and to help your evaluation to agree referees formally with the chosen consultant to ensure that you are taking references on appropriate assignments and consultancy staff |
| 7. Review and agree a written contract before the assignment starts. | (there are no notes appended to this golden rule) |
in fact, be more than a little wary of working with a consultant or consultancy that seems indifferent to this golden rule work at the document - each word means something |
| 8. Be involved and in touch during the assignment. |
using consultants effectively demands a commitment of time as well as money by clients; remember that you must keep in touch with the progress of the assignment if you are to get the most from it. Consultants are likely to be most cost-effective when working to an agreed programme and timescale. Make sure there are regular progress meetings and that the consultant keeps you fully briefed on progress against the programme; to implement the recommendations it is often most cost effective to involve the consultant(s) together with your management; if you and your staff need to provide input, make sure that you do it within the agreed timescale. Extra costs may be incurred if you hold up the progress of the assignment. Consultancy requires an investment not only in fees but also in client time; assignments are usually most effective when the work is done on the client's premises. Make sure you can provide suitable office space and administrative support for the consultants; you should aim to involve your staff in the assignment as early as possible so that they partly "own" the recommendations and have an interest in the results; assignments are often most effective when run by a joint team of consultants and staff and when the contents of the consultant's report are agreed with the staff at a progress meeting |
mercifully, in our experience not-for-profit organisations rarely try to “throw money at problems” by “chucking projects over a fence for consultants to deal with”; a relationship between a not-for-profit organisation and a consultancy should be a partnership-style “two way street” rather than an antagonistic customer-supplier showdown – in our experience not-for-profit organisations tend to be good at working this way as long as the consultancy is appropriately equipped to work co-operatively |
| 9. Ensure that the consultant does not save surprises for the final report. |
the consultant's report is often his or her most tangible 'deliverable'; but it must be in a format which is beneficial to you. If necessary, ask the consultant to produce a draft report so that you can discuss findings and recommendations with some of your colleagues before the final report is produced; the final report should contain no surprises. If there are very confidential or contentious issues, ask for these to be put into a private letter rather than in the report itself. Make sure the report is written in a way you and your staff can understand and use. Tell the consultant if you are not happy with it; ask the consultant to make a presentation to you and your colleagues, if this will help discussion on its conclusions; you should note, however, that some assignments will not result in a written report. If this is the case, make sure you understand what the deliverable will be before the assignment starts |
not-for-profit organisations probably more than most sectors benefit from an “iterative” approach to producing reports as described in these notes; it is often appropriate to agree a report outline with the consultants before they produce a draft report, to ensure that the report is fit for your purpose – such a report outline sometimes forms part of the consultants proposal to you; not-for-profit organisations usually need and seek pragmatic help from consultants, so do make sure that final reports contain a significant amount of “action plan”, “next steps” and “way forward” material to help you implement the recommendations – such material is often sensibly withheld from early drafts so that action plans are only produced once recommendations are agreed |
| 10. Implement the recommendations and involve your management as well as the consultant. | you may need to make arrangements for the management consultant to help with the implementation. This can be done cost-effectively by involving the consultant in regular progress meetings. Get a written fee quotation and proposal for any implementation work, even if it follows directly from an assignment |
not-for-profit organisations sometimes skimp in this area to their cost, as often you will find that a little help will go a long way to ensure that the vision and key recommendations are implemented sensibly; however you decide to resource the implementation of recommendations, you should always at least have a good deep think to ensure that you are applying appropriate resources to get things done |
| © Institute of Management Consultancy 1996 |
Summary
- make sure that objectives, scope and terms of the consultancy are appropriate, clear and in writing;
- ensure that you like and have confidence in the individuals you will be working with on the consultancy project;
- try to maximise the long term benefits from the use of consultants to your organisation through skills transfer and hand-over planning.