Choosing between consulting firms

Just about every book on consulting proposals is written from the consultants’ perspective. Typically, it focuses on how consultants sell work, not how clients buy it; it works on the assumption that consultants have a pre-defined service they’re trying to sell, rather than that clients have a problem they’re trying to fix; its ultimate aim is to help the consultant win more work, not to help the client buy better consulting.

Much of what has happened in the consulting industry over the last decade challenges that approach. Clients have become considerably savvier, and less willing to be palmed off with a standard approach that takes little account of their particular circumstances: their attention has shifted from buying a service to buying a solution. The selling of consultancy has changed too. The days of the professional consultant doubling as an amateur sales person have gone in all but the smallest consulting firms, often to be replaced by dedicated account managers and trained sales people, backed up by sizeable marketing campaigns. Twenty years ago, a client might have expected a proposal from a consulting firm to focus on the technical issues of a project and the individual qualifications of those involved. Today, proposals have become polarized between hard issues (such as value for money and tangible outcomes) and soft issues (such as cultural fit between the client and consultants, and communications).

The role of the proposal has changed as well, from being a dry summary of what a firm can do, to something that provides demonstrable proof of a firm’s capabilities: what, 20 years ago might have been a simple factual description of the background to a project, has now become an opportunity for a consulting firm to showcase its expert knowledge and analytical skills by providing the client with new insights. ‘Look’, the document says, ‘if we can give you these ideas simply on the basis of a few conversations with you, think what we’ll be able to do when we’re working with you.’ Moreover, proposals are rarely allowed to stand alone these days: to reinforce the message, they’re accompanied by presentations, meetings, iterations around the project, its content and scope.

At the heart of all of this is the fact that the distinction between the periods before and after a sale has become blurred. Increased competition, certainly where the largest clients and the biggest projects are concerned, means that consulting firms have to make a significant investment in building relationships, researching clients, co-ordinating global business development plans, if they’re to stand any chance of seeing off their rivals. This, in turn, creates a level of expectation from clients which all consulting firms have to meet.

But a greater investment in selling doesn’t necessarily help clients buy. Indeed, you could argue that it does precisely the opposite. As discussed in the previous chapter, it’s notoriously difficult to achieve, let alone sustain, differentiation in the consulting industry, and the more consultants try and match what their competitors are doing in terms of the sales process, the less easy it is to find areas in which any one firm is truly distinctive.

So how should clients interpret proposals and sales pitches? How should they evaluate them?

A good sell, not a hard sell

Good consultants never have to sell themselves: they let you – the client – do that for them by providing you with the information you require to make a decision and the confidence to feel that that decision is the right one. Those closing pages headed ‘Why choose us?’, inserted in so many proposals, should be useful only in so far as they are a summary of the conclusions you, the client, has already reached. If you learn something new or unexpected in these last moments, then the proposal or presentation which preceded them has failed to do its job properly.

So what should you look for? It’s tempting to evaluate proposals as proposals, and presentations as presentations, and to assume that someone who can write a good proposal is necessarily a good consultant. In fact, the skills invovled in writing a proposal or making a presentation can be quite distinct from those required in consulting. What you’re really after is evidence from the sales material that a particular company will be the most capable of resolving your issue. Such evidence falls into three categories:

First, there are issues related to your particular circumstances and the extent to which the consultancy is both sensitive to, and knowledgeable of, these.
The second category of issues relate to the consulting process.
The third to the expected interaction between client and consultant.

Intellectual capital

One of the main problems with the consulting industry is that people – clients and consultants alike – don’t tend to think in terms of pure intellectual capital. The traditional unit in which you buy consultancy is people, and it’s therefore hard to separate people from ideas.

It’s obvious – but it’s important: whether you’re buying the highest level of strategic consulting, or an in-depth expertise in a specific area, it’s crucial that you evaluate the quality of intellectual capital on offer. A good sales pitch will demonstrate the calibre of the consulting firm by showing that they have a body of expertise they can leverage on a client’s behalf, plus – and this is crucial – the ability to demonstrate just how this knowledge can be applied. If nothing else, the boom of the e-business years has rightly taught clients to be very suspicious of management ideas not grounded in practical reality, and the lessons of this should be apparent in any proposal. After all, if a consultant can’t demonstrate this now, in the comparatively controllable circumstances of a sales pitch, what confidence can a client have that he or she will be able to do so during an actual project?

A ‘good’ sell will demonstrate some or all of the following:

Eexternal information about how your issue has affected other, similar organisations
Analysis of the factors that either helped or hindered the ability of these analogous organisations to resolve the issue
Interpretation of the extent to which these factors apply to your organisation
Aan ability to communicate the conclusions in a way in which your organisation will listen.

A track record

One of the problematic things about buying professional services more broadly is that so much of the decision is based on what people say (the doing only happens once you have hired them). For this reason, it’s immensely important to ask consulting firms for case studies of the previous work. Ideally, these should be of named clients: sometimes consulting firms say they can’t reveal exactly which organisation was involved for confidentiality reasons, but you do need to be able to check their credentials. A good case study will also tell you about the benefits delivered and what happened after the consultants had completed their work.

Rationale for process

There should be a direct and consistent link between the intellectual context to a consulting project – as the consulting firm sees it – and the methodology and resources it requires to complete it. Too many proposals and presentations are compartmentalised: there’s no causal link between the nature of the problem faced by a client and the means by which a consulting firm plans to resolve it; brilliant analysis is followed by a humdrum approach and a generic project plan. A sales presentation or proposal should give a clear message: ‘This is your issue, and these are the attributes of the issue which are specific to you. In order to resolve this issue, and taking account of its unique characteristics, we will approach the project in a specific way. This specific approach requires, in turn, specific resources.’ If you find yourself asking ‘why are they suggesting this?’ ‘what value does this add?’ then that message is not clear enough.

And the best proposals / presentations not only make this message very clear, but they ensure that every aspect of the material, down to the itemisation of fees and skills, fits into this single, consistent framework. Every word makes a difference.

Ability to make a difference

But organisations cannot live on intellectual capital alone. Every client and consultant has heard of projects that have failed despite brilliant, insightful analysis, despite proven technical skills – failed because they resulted in no lasting change in the client’s organisation. Behavioural theorists describe consulting as an ‘intervention’, but in what way have consultants intervened if a client can see no difference between the organisation the consultants walked into, and the one they walk out of? Of course, gauging this from written or presented material can be extremely difficult. To supplement this, you should consider asking:

Does any of the material provided make you think differently? It may be that the consulting firm has provided you with new information about the external or internal context to the project; they may have commissioned special research, even on a small scale, to tell you something you didn’t know. Alternatively, they may be providing you with a structured approach which contains steps you hadn’t considered and which will have an impact on your thinking now.

In terms of the work carried out by the consulting firm, what have the outcomes been, not just immediately afterwards, but a year or two post-completion? To what extent did the consulting firm contribute directly or indirectly to those outcomes, or is it the client who really deserves the credit?

What will happen if you don’t hire a particular firm?

Transparency and communication

There’s still a lot of talk about open book accounting, in which each side demonstrates to the other the costs it incurs. Of course, the issue is not so much about finances as about trust and control: trust – in the sense that each side can feel more confident that it is not being exploited by the other; control – in the sense that openness reduces the potentially opaque machinations of consultancy, making consultants more accountable to their clients.

People tend to think of project control in terms of steering committees and reporting structures. These are fine in theory, but in practice even the most accountable system will fail if there’s insufficient will on the part of the consulting firm or the client to make it work. If accountability is genuinely important to you, then you should be looking for evidence of a consulting firm’s willingness to be transparent, even during the sales cycle. Does a firm’s proposal / presentation:

Provide you with a sufficient level of concrete detail about what the consulting process will involve, that you feel you know what you’re buying?
Tells you what the consultants will be doing on the first day, the first week, the first month of the project?
Make an effort to render the intangibility of much consulting as tangible as possible?
Includes some ideas on how the firm’s contribution can be measured?
Have given serious thought to how the progress and outputs of the consulting project will be communicated to your organisation?

Effective leverage of all available resources

A complaint clients habitually make about consultants is that they’re arrogant and exhibit little recognition that clients themselves may have something to contribute to the consulting process. For consultants it seems, far more than for clients, a consulting project seems to be a black and white, all or nothing affair in which, once the decision has been taken to hire consultants, consultants are what is required. In some cases, this assumption may be entirely appropriate: there may be areas where a client organisation either lacks the resources to do something or has no long-term interest in building up its own skills, in which case it makes good sense to use a consulting team. But it’s much more common for clients to know something about aspects of a problem and to require help from consultants in other areas – specific skills, a structured approach to the issue, additional information not available internally.

You therefore need a consulting firm to demonstrate, not just they have the intellectual capital required and can apply it, but that they can help you do something that you would not otherwise be able to do for yourself (this is another aspect of demonstrating they can make a difference).

Try dividing up the project into its component elements and working out what intellectual capital will be required for each component. What do you bring to the party? What do you want the consultants to bring?

Analyse the extent to which the consultants you are evaluating can provide this intellectual capital. This may mean that you end up ‘cherry-picking’ as consultants often derisively describe it – but it does mean that you’ll get a precise match with your needs.

Compare your overall aims (both as you see them and as the consultants re-play them to you) with those of the consultants in the project (as they define it). If they achieve their aims, will you achieve yours?

Recognition of constraints

‘Scope-creep’ is rightly one of clients’ biggest concerns. It’s when a consulting firm, hired to do one piece of work, gradually pushes back the boundaries of their area of focus, increasing the number of consultants on their team, charging fees over and above what had been originally agreed. Although money is frequently the motivation behind this, it’s often also a consultant’s perception that the root cause of a client’s problem lies somewhere else, and needs fixing if the consultant is to do his or her job properly – that, for example, a product isn’t selling well, not because the sales force lacks the skills to sell it effectively, but because it’s a poorly designed product aimed at the wrong market. Scope-creep works in two directions: either laterally – consultants see that some other function within the client’s organisation is the source of the problem – or in time –consultants challenge a previous decision (the selection of a particular software package perhaps) and wants to wind the clock back to correct it.

But whatever its motivation or form, scope-creep implies an unwillingness to accept the constraints of a particular situation. A client has asked the consultant to do one thing, but the consultant, for selfish or unselfish reasons, wants to do something else. From a client’s point of view, this is at best frustrating and at worst insulting. If there are constraints, they’re probably ones that you’re already aware of and are not of your making. The remit you give a consulting firm is not so much to solve this problem in sterile laboratory conditions, where the perfect solution can be found, but to solve this problem as far as is practicably possible given imperfect circumstances. And if the consultants don’t think they can solve it within these given limitations, then they should be saying so.

If scope-creep is something you want to avoid, then you should be looking through the proposals and presentations you receive from consulting firms in order to identify signs that the consultants intend to respect the boundaries that you have had to draw.

Does the proposal clearly state your objectives?
To what extent have the aims of the project, and the consultants’ role within it, been presented in such a way so as to dovetail with your own aims?
Is the consulting process to be undertaken sufficiently clearly defined and well-focused?
Does the proposal contain a clear definition of the outputs from each stage of the project?
Have the costs and timescales for the project been clearly defined and detailed?