When To Hire A Consultant ...And How

Scripps Howard News Service
Judy Olian
(Judy Olian is Dean of Penn State's Smeal College of Business and is a leading expert on strategic human resources management.)

There are times in the course of business when it makes sense to hire a consultant. Reasons vary. You might have a need for a temporary or permanent outsourcing solution, particular expertise or analysis lacking inside the company, impartial analysis of the pros and cons of a strategic position, third party review of the strengths of a key manager or department, confidential advice that's too sensitive to be sought internally, or the formulation and management of change or restructuring strategies. Sometimes, you need a credible third party to help validate and shoulder a controversial or contentious decision. When things click, consultants can be extremely cost-effective, creative problem solvers, or the source of magnificent insights and business advances. When they don't, they can be a royal waste of money, or worse yet, unsettle, divide, or derail important aspects of a business. How can you maximize the positive returns from a consulting assignment, and avoid the potential negatives?

Check out consultants in advance to make sure they have a respected track record in the area of need, and that they understand the idiosyncrasies of your culture. Address confidentiality of information and protection of intellectual property up front with the consultants. At a more fine-grained level, make sure their behavioral style fits the culture. Solicit referrals and references by drawing on your network of associates who know your business and culture. As examples, are these consultants analytically oriented preparing detailed reports, or do they deliver their recommendations more informally? Do they reach out to insiders for expertise and information, or develop their recommendations through their own lens somewhat divorced from the company's operations? Consultants' operating modes need to fit the organization so that their value contribution is not derailed by incompatibilities in style.

Know what you're asking for , and agree on explicit project objectives. There can be easy misunderstanding or redirection of the essential focus or scope of a project. In many instances, once consultants get going they discover unanticipated issues that can divert them from their original purpose. Clear agreements on project objectives and expected outcomes provide both sides with a consistent map of the expected goals and rules of engagement, and require consultants to come back to the drawing board to re-negotiate any changes to the assignment, if indicated.

Set the boundaries of engagement in advance . Consider the range of ideas that might result and if certain recommendations are definitely off limits no matter how compelling the rationale, take them off the table in advance. The consultants might not agree to these parameters, but at least you've saved yourself wasted engagement fees. To get the full return on your investment, encourage consultants to push the system beyond its natural mode of operating, but set limits. Some radical ideas, even if they're interesting, are so far outside the realm of doable or feasible that they immediately render the consultants' recommendations irrelevant.

Position the consulting team to earn the trust of insiders . The most effective consultants come in with an open mind to the data and conditions. Their language should appear unbiased and not pre-disposed toward one solution or another. Prepare them with the requisite background information to steer them clear of political quagmires and old wounds that might unnecessarily ignite conflict or derail their project.

Involve senior leadership of the division or function in the consultation process or better still, have them drive the consulting project. Consultant recommendations have little impact unless they benefit from senior executive backing who buy in to the project from the get-go, and broker the internal follow through.

Make sure that your organization is ready and able to support consultants' information and access needs. Except in rare situations, consultants cannot function effectively in a vacuum. They need to draw on organizational insiders as sources of input, data, and reactions. Employees might need to work along side the consultants, serve as survey or interview participants, or collect significant materials on behalf of the consultants. It's amazing how many consultant projects fail because the organization allocates no time or people to support the consulting team.

Identify insiders to serve as the consultants' point of contact . Consultants must have natural bridges into the core of the business, especially if the proposed ideas are somewhat radical. These linkages into credible and knowledgeable insiders are critical to test the viability of the ideas, and lend credibility to the consultants' proposals.

Consultants can be very expensive. When a client is disappointed, it's often not the fault of the consultant. Responsibility for failure can lie with the business client who fails to help consultants gain access to the right people and information, understand the viability of proposed solutions, or create readiness to accept and implement change.

Ultimately, consultants only propose. Leaders adopt or modify these ideas, and lead their execution. If senior management isn't willing to play that role, at best the outcome will be changes at the margin that are not adopted as the organization's own. The more likely outcome will be that the consultants come and go, leaving nothing in their tracks except the cynicism of seasoned insiders who have observed yet another expensive, failed project. Why waste the time and money? Make it work by hiring the right consultant into the right conditions.

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REPORTERS & EDITORS: For more information, please contact Wyatt DuBois in the Smeal College of Business Media Relations Office at 814-863-3798 or wed112@psu.edu .

Penn State's Smeal College of Business offers highly ranked undergraduate, MBA, executive MBA, Ph.D., and executive education opportunities to more than 5,500 students at all levels. Featuring academic departments of accounting, finance, marketing, insurance and real estate, management, and supply chain and information systems, the college is also home to major research centers such as the Center for Supply Chain Research, the Institute for the Study of Business Markets, the eBusiness Research Center, the Farrell Center for Corporate Innovation and Entrepreneurship, the Center for Global Business Studies, and the Center for the Management of Technological and Organizational Change.

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