Consult Magazine – What Clients [...]]]> This article appeared in the Canadian Consulting Industry’s magazine. Although the advice on “What Clients Really Want” was directed at consultants, users of consultants would do well to hold the profession to these recommendations.

Consult Magazine – What Clients Really Want

In this final, summary report, we compare the [...]]]> Earlier this year we conducted two short surveys, both with similar content, but one from consultant’s perspectives, and the other collected input from users of consulting services.

In this final, summary report, we compare the perspectives of clients and management consultants on which factors have the greatest impact on generating overall satisfaction when working with management consultants. These factors include those that are under the control of the consultants, as well as, those that clients control.

The survey showed that less than 30% of clients consider that the management consultants they engaged either met or exceeded their expectations. In contrast, more than 70% of management consultants believe that they have met or exceeded their client expectations.

It seems that there is a big gap between actual and perceived overall satisfaction, and that consultants do not have a clear understanding of how either factors under their control, or under the client’s control, impact overall satisfaction. Whether you are a client or a consultant, we hope that you find this short report useful in narrowing the gap between actual and perceived satisfaction from consultants, thus enabling overall satisfaction levels to be raised.

Click on the report cover to view or download it.

“But increasingly, says Jenny Sutton of the Hong Kong-based RFP Company, clients are refusing to pay for junior staff’s on-the-job training. Instead, [...]]]> In this article on the state of the consulting industry, The Economist contacted Jenny for her thoughts!

“But increasingly, says Jenny Sutton of the Hong Kong-based RFP Company, clients are refusing to pay for junior staff’s on-the-job training. Instead, they are asking for fewer and better consultants and setting them to work alongside their own staff.”

We recognized several other comments in the article – in particular the reference to Eden MacCallum and Point B “In short, consulting is looking less like a licence to print money and more like temporary labour. Clients can bypass the big names and hire consultancies such as Eden McCallum, a British firm that packages teams of experienced independent consultants, or Point B, an American firm that provides only a project manager, letting the client select the team. Big consulting firms (with their big brands) can probably coexist with smaller operators.”

Nuuko is one of the new generation consulting firms – organized as a loose association of c-level advisors, focused on [...]]]> Recently I had the opportunity to talk to George Norsig, the driving force behind Nuuko.

Nuuko is one of the new generation consulting firms – organized as a loose association of c-level advisors, focused on key issues in selected industries. Clients get to pick their dream team, and tap into their brainpower and deep industry experience on whatever basis suits them.  Nuuko describes itself as a “a web-based marketplace where enterprises needing innovative solutions on a narrow or wide issue can find the people with the appropriate expertise and credentials to help them. NuuKo provides all the tools, resources, processes and services necessary to make that relationship successful for all involved.”

This type of clearing house for talent is the ideal platform for buyers of consulting firms excercise their right, so often disdained by traditional firms, to cherry pick from the best of the best. The talent pool includes seasoned individuals, drawn from management consulting firms and industry, as well as niche management consulting firms.

And if, as a client, you are not sure how to pick a consultant that will deliver – having always previously simply hired the well known brands – you can read George’s excellent post on “Top 7 things to look for in a consultant.”

While it is often helpful to ask the consultants for their perspectives, buyers should [...]]]> Too often clients give consultants a blank canvass to define the project approach as well as team structure and composition.

While it is often helpful to ask the consultants for their perspectives, buyers should always remember that consulting firms will want to staff as many of the roles on the project as they can.

Therefore, once you understand, and agree on the proposed approach (see “Consulting Projects Should Be Based on Your Pace, not the Consultants“) , and the proposed team structure, you should have a detailed discussion with each firm you are considering in on the project team structure, what the responsibilities and required skills are for each role, to determine which roles you can staff  with an internal person (or a resource from another source).

A healthy balance of consulting and client resources on the project team can make a significant difference not only to the costs, but to the overall outcome of the project. A combined team will be more effective at influencing your organization, identifying sources of data, noticing anomalies in information gathered, determining where resistance might come from, and positioning messages effectively.

Of course this means that you must have people available to assign to work with the consultants, and they must be your best people otherwise you are handicapping the team, rather than strengthening it.

Consultants may accuse you of cherry picking – because they will perceive that you are selecting on their best, and most experienced people, preventing them from adequate leveraging the more senior consultants deployed by assigning junior/less experienced people to work with them. But why should you pay for resources who are filler or who are going to be learning on the job? If anyone is going to be learning on the job, it should be your people, not the consultants’.

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“Ultimately lawyering is becoming more of a business than a [...]]]> Another gem from The Economist – this one about the legal business/profession “A less gilded future” which has some interesting parallels to the consulting industry.

“Ultimately lawyering is becoming more of a business than a profession” claims The Economist, citing three major trends:

• clients’ determination to keep their fees down and to opt for fixed fees or caps, rather than paying hourly rates particularly for routine work done my first- and second-year associates
• moving routine work off-shore to be undertaken by cheaper contractors
• using technology for repetitive work like e-discovery

Sound familiar?

Like lawyers, consultants like to consider that they belong to a profession. But with evolution of many consulting firms from partnerships to other ownership structures, the management approach of consulting firms has been driven more by earnings than client results.

And like legal clients, consulting clients should start analyzing their bills more closely and insisting on:

• fixed, capped or success fees
• work that does not require a consulting being outsourced to admin or other lower cost resources
• work that can be performed off-site (research, data analysis, presentation cleanup etc) being moved off-shore to lower cost resources
• client resources being used where ever possible rather than high-priced consultants

The biggest challenge is figuring out where technology can be used to minimize consulting fees – to date it has seemed that the more technology there is associated with a project, the higher the fees and the higher the probabilities of significant overruns!

But you would think that consulting firms could take some their own advice and determine how to work smarter not harder, by utilizing technology to minimize headcount required on projects, without waiting for clients to insist on this.

This article on “What do [...]]]> As I caught up on the last three editions of The Economist on Saturday afternoon, I came across several articles that got me thinking some more about the consulting industry.

This article on “What do bosses do all day?” highlighted research conducted by Oriana Bandiera, Luigi Guiso, Andrea Prat and Raffaella Sadun and published by Harvard Business School “What do CEOs do” that concluded that CEO’s only spend 3-4% of their day thinking about long term strategy. But The Economist’s punchline is that ‘not every boss thinks he needs more time for thinking. “You can hire McKinsey to do that for you,” says one [CEO]‘.

But the study concluded that time spent with insiders is positively correlated with several measures of firm performance, while time spent with outsiders (of which consultants consume the most time) only is not. The view of the authors being that time spent with outsiders is more often than not intended to further the personal interests of the CEO (connections for future job opportunities) than the interests of the firm as a whole.

So maybe it is not thinking that CEOs are hiring McKinsey for, but for their connections and network so that he (women would never do this!) can land his next job!

As I read this post from Source for Consulting, which compared consulting firms to cars, I thought of a slide I created for a recent presentation on “What Clients Really Want.” This presentation was [...]]]>  

As I read this post from Source for Consulting, which compared consulting firms to cars, I thought of a slide I created for a recent presentation on “What Clients Really Want.” This presentation was a bit of a departure from our usual perspective, as we tend to focus on providing advise on the buying side of the equation, rather than the selling. So we decided to have a little fun with it.

In this slide, we talk about the behavior associated with buying consulting services, with the key point being that buyers’ motivations and requirements vary depending (among other things) on seniority or career stage.

Buyers of consulting services at the most senior level can be likened to buyers of luxury cars. The purchase represents status, prestige and membership of an exclusive club – it has nothing to do with transportation. It is also discretionary, and represents a relatively immaterial cost to the buyer. They do not depend on the car for commuting, they drive it for pure pleasure, and leave the chores of maintenance and cleaning to someone else. When they get tired of the color, or the ashtray is full, they simply trade it in for the latest model. Similarly when senior executives buy consulting services, they buy based on brand, expecting to get a very exclusive service and the intellectual horsepower of the consultants. Price is usually not a criteria, and the expected outcome is often more conceptual than tangible. Consultants selling at this level have to be sophisticated, personable and entertaining, at the same time as providing intelligent insights into the client’s business.

Buyers at the senior management level usually engage consultants to accomplish a major transformation in the the organization – they are not only looking for ideas, but for business results. They want a consulting firm that is a reliable workhorse – they are staking the business on the result. We liken them to the buyer of a family sedan – the car provide the essential transportation that underpins the family’s activities – commuting to work, fetching and carrying kids, shopping and recreation. This is usually not a discretionary purchase, and performance and reliability are of paramount importance. The buyer refers to consumer reports and other buyers guides before making a decision, and looking for an all round combination of performance, reliability, capacity and total cost of ownership. They will work closely with the consulting firm to jointly deliver a result – sharing the driving and maintenance responsibilities, while the buyer juggles many other interests and responsibilities. Warranties, availability of replacement parts and ease of use are also important considerations.

For junior buyers, often at the departmental level in the organization, consulting expenditure is usually associated with a project that they are dedicated to full-time and which represents a significant portion of the budget that they control. Therefore they tend to be closely involved in the purchase decision, focusing on absolute price, detailed specifications, certainty about delivery, with price being a key consideration in the purchasing decision. Often their expectations exceed their budget. Their careers depend on the consultant delivering a successful outcome, but they will be willing to give up important requirements based on budget constraints, haggling endlessly over the price. These are often the most difficult buyers to satisfy, and they tend to be very hands on in their management style. Consultants selling at this level need to focus on finding the most cost-effective way to achieve the result that the client is looking for, even if it involves significant scaling back of expectations and scope. At this level, although the buyer may have gone shopping for a car, sometimes they end up with something a little less functional!

For consultants, the lesson is to understand what your client is trying to buy, and to make sure that is what you are actually selling, otherwise you will be wasting both your and the client’s time and money.

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