14 Nov Avoiding Common Mistakes when Selecting a Strategy Consulting Firm
This article is adapted from “Seven mistakes clients make when choosing a consulting firm”, developed by Christopher Burke (CEO: Brickendon Consulting – http://www.brickendon.com/) and published by Consultancy.uk.
Selecting the right consultancy to advise in navigating and/or driving change programmes in this ‘new world’ that companies face is a major challenge, particularly when considering the choice of thousands of large, mid-sized as well as boutique firms. Executives and their teams spend over $150 billion on management consultants globally.
These views on seven common mistakes that clients can make when choosing a consultancy may provide some direction.
- Take advice not linked to implementation expertise:
Many strategy consulting firms don’t offer implementation and only advise on what a company should do, but not on how to do it. There are not many facets of life where you would accept advice from people who didn’t have experience in the chosen field.
- Ascertain the consulting firm’s pedigree in implementing a solution!
- Pay a large premium purely for brand:
Bringing in a recognised brand seems sensible when faced with a significant challenge. However, some premium brands can charge two to three times more than specialist niche consultancies, who often have deeper domain expertise.
- Don’t get hoodwinked into spending a fortune just to engage a label;
- Get a series of quotes to ensure you don’t overspend and that you look for specific niche players who may better suit the engagement.
- Consolidate into a single or few providers thinking this will drive efficiencies:
Many large corporations have made the costly mistake of consolidating their suppliers’ list down to one or two global providers, believing that this will improve service and value for money. If you think about your own home, you might use a large building company for an extension, but would they offer the best value if you just needed a few light switches changed? In this instance, you would call an electrician as this is his area of expertise and he will offer the best service at the right price.
- Niche suppliers often provide the greatest value proposition.
- Outsourcing resources based on cost without assessing the knock-on effects:
Over the past few decades, many functions have been outsourced to, among others, lower-cost locations and in many cases firms have reaped large cost benefits. However, outsourcing brings with it its own, often much bigger, issues. Outsourcing places larger demands on head offices to manage the lower-cost teams and teams that are split between head offices and low-cost locations require extra time from the management team – a team of eight offshore resources has been known to require one-and-a-half days per week of extra management time compared to those located in the head office.
- Consider the potential transfer of expertise from the client to the outsourcer;
- Consider the reduction in output from the client / head office resulting from extra management time required when assessing the outsourced team.
- Not forcing succession and training plans on consultancies as part of the engagement:
Failing to include a plan to ensure the transfer of expert knowledge from the consultancy to the client is like sleeping through an expensive career-enhancing training session. In order to ensure that the in-house team fully benefits from the consultancy’s expertise, it is essential to include detailed succession and training programmes. If implemented correctly, the team should have the skills and experience, post the engagement, to tackle the next challenge faced with similar parameters.
- Include detailed succession and training programmes as key deliverables on the engagement.
- Not fully utilising the Intellectual Property (IP) of the chosen consultancy:
Part of the reason for engaging an external firm is to take advantage of their specialist knowledge in a given area. This IP could be far-reaching, and failing to reap the benefits of this expertise is an opportunity missed by many client firms. Consultancies spend considerable time and effort in developing solutions, including solutions for potential problems that the client might not have thought of yet, which should be an added benefit of any consultancy engagement
- When engaging a consultancy, ensure that IP – including solutions for potential problems – is made use of in enhancing the business.
- Not making the consultancy own the deliverables and deliver real answers:
As part of an engagement, good consultancies like to be on the hook to deliver tangible benefits to the client and real answers to challenges faced. Asking consultancies to advise without defining specific deliverables makes it harder for a client to get real tangible value from the engagement.
- List consultant deliverables, which helps the consultancy to define what they need to deliver and also provides a list of tangible benefits for the client.
Consultancy services, when applied correctly, turbo charge a client’s business and deliver real and lasting benefits. Clients should ensure that they maximise value for every dollar spent by choosing the best firm for their specific needs. This includes extracting IP during the process, participating in appropriate training at the end of the engagement and ensuring that the consultancy has the expertise to implement, as well as advise on, the topic in hand.
Go to: http://www.consultancy.uk/news/14031/seven-mistakes-clients-make-when-choosing-a-consulting-firm to read the original article.
 IP… is the “ownership of ideas”. Unlike tangible assets to your business such as computers or your office, IP is a collection of ideas and concepts. Ways to protect IP include the use patents, trademarks or copyrights. (https://www.entrepreneur.com/encyclopedia/intellectual-property)