Consultants are a great way for companies to innovate, mitigate high risk situations, or solve difficult organizational problems; however, the wrong consultant can put you in a worse situation than when you started. I’ve been a consultant now for about 30 years, and I’ve had the great privilege to work with some great companies. Throughout my engagements, I’ve been asked on several occasions to recommend and/or screen other consultants, and I’m going to be perfectly honest with you. Most consultants over-promise and under-deliver. With steep fees and an unchartered working relationship, how do you go about selecting the right consultant? Here are some tips.
Tip #1: Make Sure to Hire a Consultant, and Not and Employee in Transition
Hiring a consultant and hiring an employee are two completely different things. That’s why I never understood “contract to hire” offerings. You have to be clear on what you want, because the two think and act very differently. A consultant is an entrepreneur with a high degree of skill and professionalism. They are independent and responsible—perfect for assigning jobs where your only concern is the outcome.
Employees are task oriented and need to be managed. Their skills are not as well-rounded and they do not have as much perspective as consultants, because they are accustomed to learning only their job at their company.
Determining the difference is easy. Employees in disguise will have been employed somewhere for most of their career, possibly with some short breaks between jobs as a consultant. There’s nothing wrong with a long employment career followed by a consulting career, as long as the break is clean and it is clear that a purposeful transition was made. You can also ask the potential consultant directly, “How would you feel about working here as a permanent employee?” A real consultant will respectfully decline. It is just not what they want.
Tip # 2: Concentrate on Results, Not Resumes
Forget about resumes, they are a waste of time. Even if they are accurate (which is not likely), they are largely irrelevant. What you really want to know is if they can help your situation. If they have been able to attain tangible results with other people like you, they can probably help you as well. Make sure they have credible references and testimonials of the work they have performed in the past. You should objectively validate both the results that they are claiming and other soft skills, like their work ethic and personality.
Also, don’t be concerned if they do not have specific experience with your tools or processes. Real consultants are professional problem solvers and quick studies. The clients that have the best results from me are the ones who trusted me to work in subject areas I have never worked in before. I have also had clients insist that I know a certain skill, only to discover it irrelevant to the results we obtained.
Tip # 3: Limit your Risk with a Fixed Bid Project
This is contract management 101. There are basically two different ways to engage a consultant: fixed bid or time and materials. For some reason, it has become a convention to pay consultants on a time and materials basis. Of the two, time and materials is the riskiest way to engage. Personally, I think it’s unethical to charge by the hour, and puts you and the consultant at opposing interests (the consultant is incentivized by working slow).
To control costs, it is much better to construct a fixed-bid arrangement with your consultant. Don’t get caught up purely on cost – cheap consultants are a waste of time and money. Instead, view your consulting engagement as an investment, and focus on your return on investment (ROI). Understand clearly, in both quantitative and qualitative terms, what value you will extract by having the consultant engaged, and make sure you get a good return on your money.
Using a consultant is a smart move, but if you are not careful, it will backfire on you. Be intelligent in your engagements by making sure to hire a true consultant. Also, focus on results and avoid paying your contractor by the hour. Keep these tips in mind for your next consulting arrangement and you will come out ahead.