Seven mistakes clients make when choosing a consulting firm

28 September 2017 Consultancy.uk

Executives and their teams spend over $150 billion on management consultants globally, as they seek advice to navigate the new world which is being thrust upon them or support with driving their change programmes. Selecting the right consultancy is, however, no easy task – in a landscape with thousands of large and mid-sized firms, as well as boutiques, separating the wheat from the chaff is considered a major challenge. Christopher Burke, CEO of challenger consultancy Brickendon provides his view on seven common mistakes that clients can make when choosing a consultancy.

1. Take advice not linked to implementation expertise

Many strategy consulting firms don’t offer implementation. They advise on what a company should do, but stop short of advising 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. Failing to ascertain the consulting firm’s pedigree in implementing a solution is as ludicrous as taking driving advice from someone who has never sat behind the wheel of a car or the army engaging bomb disposal experts who have never actually defused a bomb.

2. Pay a large premium purely for brand

Faced with a significant challenge, bringing in a recognised brand seems sensible. However, it is important not to get hoodwinked into spending a fortune just to engage a label. Some premium brands can charge two- or three-times more than specialist niche consultancies, who often have deeper domain expertise. It is advisable to 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.

Seven mistakes that a client makes when choosing a consultancy

3. Consolidate into a single or few providers thinking this will drive efficiencies

Many large corporations have consolidated their list of suppliers down to either one or two global providers, believing that this will improve service and value for money. This is a very costly mistake. 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. The same is true for consulting firms, where the niche suppliers often provide the greatest value proposition.

4. 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. Even ignoring the potential transfer of expertise from the client to the outsourcer, outsourcing places larger demands on head offices to manage the lower-cost teams. In my experience, 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. This reduction in output from head office is rarely taken into consideration when assessing the performance of the outsourced team.

5. 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 akin to sleeping your way through an expensive career-enhancing training session. In order to ensure the in-house team fully benefit from the consultancy’s expertise, it is essential to include detailed succession and training programmes. These should be listed as key deliverables on the engagement. If implemented correctly, your internal team should have the skills and experience to tackle the next challenge your team faces with similar parameters, post the engagement.

Quote Christopher Burke, CEO of Brickendon

6. Not fully utilising the 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. At Brickendon Consulting we spend an enormous amount of time and effort developing solutions to problems that clients haven’t yet thought of. Many of these solutions are award-winning when matched against our peers. I find it perplexing that some clients will engage us and not make use of this IP to enhance their business which should be an added benefit of any consultancy engagement.

7. Not making the consultancy own the deliverables and deliver real answers

As part of a client engagement, good consultancies like to be on the hook to deliver tangible benefits to the client and real answers to the challenges the that client is facing. Asking consultancies to advise without defining specific deliverables makes it harder for a client to get real tangible value from the engagement. Listing out consultant deliverables helps the consultancy by defining what they need to deliver, but 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 the consultancy has the expertise to implement, as well as advise on, the topic in hand. 

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