Hiring Consulting Services – How to Optimize the Impact
At times, many businesses find themselves in situations which call for hiring external consulting services to help the management find solution to a given problem. Unfortunately, sometimes the executive leadership of the client organization finds that the results of such an intervention are not exactly what they were looking for. Here we will examine how to optimize the impact and draw maximum value out of an interaction with a consulting firm.
When to Hire a Consulting Service?
A company may need external help to deal with a problem in a variety of circumstances. The term ‘problem’ here is broader than the literal meaning of the word. A problem may refer to a gap between the desired and actual performance or to a total absence of clue what is wrong with a process; to the desire to seek advice on refinement of long-term vision or to business development prospects for a new product line. In short, it is the quest to solve a given problem that drives an organization to hire the services of a consulting firm. Following are a few examples that rightfully warrant the need for hiring a consultant.
A Function is Non-Existent in the Client Organization
An organization might need the help of a consulting firm if the function it needs help with does not exist within the client organization. For example, a company would need a legal advice from an external consultant if it does not have a legal department within its structure. Or, an organization may need to hire services of a Lean Six Sigma / process improvement consultant if it does not have a specialized LSS team of its own.
An Organization Lacks Expertise in an Area
A company might be in need of the services of an external consultant if it lacks expertise in a given function. For example, if a transportation / logistics company may have an in-house IT specialist but if it decides to upgrade its computer infrastructure across multiple locations and needs to ensure implementation of IT security systems and protocols, it will need to hire services of an IT implementation & consultation firm.
External Perspective is Needed
At times an organization may want to pursue a course of action (such as expansion into a new geographical market) and may have a fair amount of experience in the area but it may still hire a consultant’s services to gain an external perspective. It may seem to be an unnecessary investment on the face of it, but in fact it is a wise practice to do so. The reason being that many decades of experience of a management team within a single organization might lead to a tunnel-vision or a parochial understanding of the situation. In such cases it is always better to have an external, unbiased review by a consulting firm, as a consultant, by virtue of their exposure to a variety of industries and business lines, would be able to offer insights that the managers within the company may not be able to discover.
Need for a Cultural Overhauling
This is a complex situation that inevitably needs an intervention by external experts. The complexity arises from the need for a shift in organizational culture which results from mergers, acquisitions, or any other radical change. The reason is similar to the one in the above example, all management tiers right from the executive leadership down to the line supervisors are accustomed to an established culture that they have thrived in over a long period. With the need for a sudden change, even the experienced managers can become blindsided by the tunnel-vision and invariably need help from external change agents in order to smoothly transition into the new normal.
When NOT to Hire a Consulting Service?
Just like there are conditions which justifiably necessitate the services of an external consulting firm, there are ones which strictly require the issue to be addressed internally. It is imperative that the executive leadership / key decision-makers be aware of these situations because hiring the services of a consulting company will not only result in loss of time and money for the client but will also waste the efforts of the consultants. Remember, a consulting partner wants to help a client succeed, not to get entangled in its organizational politics, rivalries and blame games. Some of these scenarios are as follows:
A Culture Intolerant to Mistakes
Errors and omissions are a natural part of every process. No matter how qualitative a process is, there is no way it is completely immune to errors; even a truly six sigma process has 3.4 defects in one million opportunities. Such errors made during a constructive effort should be celebrated as a learning opportunity (the readers who have enrolled in any of Naburva’s Lean Six Sigma certification programs would notice that the last segment titled ‘Bloopers & Stuff and a Final Message’ conveys the importance of this very idea). There are organizations out there which have a culture of strict adherence to set procedures and policies to such a degree that they have zero tolerance for risks and honest mistakes that are an inherent part of an improvement initiative. Within such a culture, nobody would like to suggest a new idea or propose a solution, no matter how dire the situation is. Eventually, the higher management would want to hire the services of the external firm which is not a very prudent thing to do before having exhausted the internal resources.
A Culture Ridden with Destructive Organizational Politics
This situation probably needs no further explanation. In companies where dirty politics are the rule of the game, a consultant’s services are typically sought only to pass the buck. Without a sincere and dedicated commitment to an objective, it is pointless for the management to hire a consultant’s services.
A Culture of Air-Tight Compartmentalization
If different departments / functions within an organization are siloed to an extreme degree and there is virtually no cross-collaboration between them, chances are that the functional managers are strongly accustomed to running the show the way they seem fit. With this kind of mindset within middle and lower management, an executive decision to hire an external consultant will most likely result in a lack of cooperation by the relevant stakeholders, and in extreme cases, may even be met with active resistance aimed for the intervention to fail.
Finally, moving on from context to the objective of this blog, here are some recommendations that can help an organization make the most value out of its decision to hire services of a consulting partner.
Have a clear objective in mind regarding which you need help from a consultant. Not having a clearly defined objective will result in unclear project scope and neither you nor the consultant will have an idea of what constitutes ‘success’ within the given situation.
Make sure that you have done the groundwork internally before you bring in a consultant. If you haven’t done so, the consulting company (like us) will happily do it for you, but you know that the hours that we are putting in are billed, right?
Have a transparent discussion within your team regarding the need for hiring the services of a consulting company. All relevant stakeholders must be on board regarding this decision. Make them a partner in the effort and help them understand that the intervention is being considered to help them achieve their professional objectives. If you don’t do it, your managers will be taken by surprise when consultant team walks in. It would not be unexpected if your functional stakeholders attempt to thwart the consultants’ intervention, as from their perspective, a success of the consultant in finding a solution to the problem will make them look bad in the eyes of the higher management.
If your organization has a culture of intolerance towards mistakes, your executive leadership will most probably have to do some hard work in order to change this culture. You need to build some tolerance to risk and develop an acceptance to errors before embarking on a journey towards change. And by errors we don’t mean missing a few zeros in receivable invoices or adding a couple in payables. Rather what we mean is that some errors are inevitable when we are trying to build something new (after all, a consultant’s intervention results in some degree of change). There are countless failed attempts behind any successful invention. The inventor looks at them as learning opportunities, and so should you.
Even if the nature of the operations within your organization warrants strict compartmentalization (although silos generally don’t tend to benefit an organization as compared to cross-functional collaboration, but for the sake of the argument, let’s say they do in your case), allow some collaboration between functions that are a stakeholder in a given process which requires intervention. Things will turn out way smoother if all the relevant stakeholders are on board, look at the issue from a common lens, and are converged on the same objective.
Offer a strong executive support towards the initiative. The support should be accompanied by unequivocal communication with the stakeholders regarding the objective, the importance and the urgency of the intervention as well as the expectations from the internal stakeholders.
So, here was a quick and broad overview of the context followed by some recommendations for the executive leaders regarding how to make the consulting assignments most meaningful to their organizations. If you have any unique circumstances that you would like to talk to us about and have some questions answered, please feel free to write to us. Don’t worry, we don’t charge anything for responding to emails 😊.