Our friends at Revitalization Partners help companies make better decisions about business operations. This blog from their newsletter looks the importance of managing expectations when hiring a consultant for your company. At Juniper Capital, we are committed to sharing business advice that helps you achieve success. We offer hard money loans in Washington, Oregon, and Idaho, and real estate loans in Seattle and cities across the Pacific Northwest:
Although hiring an outside consultant can be beneficial to a company, for every success story, there are many other clients whose projects have failed because they bring in the wrong consulting group, or a consultant with a mismatched set of expectations.
So, how does a company avoid this problem? The first step is making sure the size of the consulting group is matched to the company. Many of the top-tier national firms focus most of their practice on large companies both public and private. Their methodologies and experience, and, in many cases, fees, would not typically be a good match for a privately owned smaller or mid-market firm. If your company is backed by a larger venture capital or private equity firm, your investors or board members may have experience with the brand name firms. Regardless of the referral, make sure that the firm has the experience and appropriate expertise to meet the needs of your company.
Consulting firms are sometimes accused of making empty promises, stating the obvious, or even lacking the relevant experience on which to base their recommendations. And often, the plans lack sufficient detail to be executed by the client’s organization and, thus, lack sustainability.
This can be avoided by matching the expected deliverables with the expectations of the client.
There are many types of management consultants, but the most common are strategic and operational.
A strategic consultant focuses on one or more strategic problems facing a client and develops plans to address them. The expectations of the client are to get a viable plan for the organization to execute and have the organization be in a position to execute that plan. In dealing with an operational consultant, the company may understand its strategic issues, but does not know how to take advantage of the knowledge.
As a client, what should you expect from any consulting group that you might retain?
- Impartial Advice: As an outside party, a consultant is not conflicted by organizational or financial issues within the company. They bring experience in multiple situations and strategies and know what has worked and what has not. And, above all, they may be the only people connected to the organization that will tell you what you don’t want to hear. These often harsh, but accurate, views that will make the difference between success or failure of your company.
- Dedication to Solving the Problem: A very focused individual or team that is dedicated to solving an identified problem can be very valuable. They are not caught up in company politics, getting a raise, or advancement. They come in, use their expertise, and leave when the problem is resolved.
- Access to More Information: As in the case of the company needing a bank, after a number of years working with banks, Revitalization Partners was able to identify and contact the ones whose lending criteria matched the company in a much shorter time than if the company had gone through the learning process.
- Fresh Perspective: Companies experiencing challenges often need a fresh viewpoint. The right consultant can add a new perspective and identify underlying problems. Often, employees of a company become busy with their daily jobs, and/or, in some companies, hide problems due to fear of criticism.
- A Plan, Including Deliverables: The project should include a concrete plan that outlines what needs to be done, who is responsible, the time frame in which the tasks will be accomplished and what tangible benefits (either strategy and/or operational change) will be delivered when the tasks are complete.
When thinking about working with a consultant, be sure to match your expectations with that of the consulting group you are considering. And while references and reputation are certainly helpful, a conversation regarding the “war stories” of how the consultant has helped companies like yours is often the best criteria.
Revitalization Partners is a Northwest business advisory and restructuring management firm with a demonstrated track record of achieving the best possible outcomes for our clients. They specialize in improving the operational and financial results of companies and providing hands-on expertise in virtually every circumstance, with a focus on small and mid-market organizations.