How To Choose A Consultant
In my 35 years working as a consultant to small businesses, I've been struck by how many people hire us for the wrong reasons. Let's say you've got a marketing problem that has you stumped. I'll bet that you ask around, get the names of a few experts, and then try to figure out which one to hire. And, since your expertise isn't in marketing, you don't feel qualified to choose among them.
The fact is, you shouldn't be looking for a consultant to solve your specific problem. What you need is someone who can work with you on marketing, so that the next time problems come up, you can deal with them yourself. A good general consultant is, or should be, a teacher. So when you choose one, look for the sort of person who would make the best teacher -- someone who is articulate, patient, clear, and supportive. You'll want a consultant who is willing to take you through the process, answer your questions, and ultimately let you make the final decisions.
Chief executive officers who understand this never pay us twice for the same service. Instead, they pick up all they need the first time around. A good example is the experience of a CEO I know who owns a meat company in New England. He wanted to explore the possibilities and benefits of an addition to his main building, so he brought in an industrial engineer. The consulting engineer made a complete product flow study at various volume levels and proposed several expansion plans to handle the work. Throughout the project, the CEO had paid close attention to what the engineer was doing. When he didn't understand a particular scheme, he asked questions. Or if the engineering jargon got in his way, he kept after the consultant until he understood the concepts. He saved copies of layout diagrams, product flow charts, and other instructive materials.
In the end, none of the consultant's plans felt right to the CEO, so he didn't accept them. But over a period of time, he designed an additional series of layouts, using techniques he'd learned from the consulting engineer. Eventually, he came upon the right combination of dollars and space. In the process, he'd saved himself thousands of dollars in consulting fees and had considered many more options than a consultant might normally suggest. And he now is his own layout man for modest projects. Even for ambitious projects he needs less help from professionals than most of his peers.
Sometimes CEOs can't take the time to get so deeply involved in a single project. That was true in one of the companies I worked with. The owner wanted to see if the company, a supplier to the shoe industry, could use its space more efficiently, and to help in the decision, he needed to know the profitability of each of his six product lines. He didn't have the time to spend on the study, and his accountant didn't have the background to execute it. So they hired me to do a profitability study on one product, with the accountant tagging along, learning the method. Every other day I also met with the CEO. When that single study was done, my job was done. The accountant had learned enough to prepare the other five studies on his own. This CEO not only had saved a bundle of money by thinking through how best to use me; he also can get future jobs done in-house. And the accountant was tickled to have added a new bit of knowledge to his repertoire.
A useful attitude to develop when dealing with outside consultants is a healthy cynicism about the alleged complexities of all professions. Every trade has its vocabulary, used by practitioners to dazzle laypeople. (Why not, when there is such a beneficial relationship between confusion and fee size!) While realizing that mastery of any discipline requires considerable effort and study, the truth is that the pieces of each profession that apply to you as a CEO are usually not that difficult to learn. It often is useful and profitable to push through the other person's gobbledygook, even in very specialized fields.
One CEO I know found that some of the tasks of labor lawyers were not beyond him. He had taken over as head of a New Jersey precooked-foods company that had a very aggressive union. If he was going to solve problems of production efficiency and company control, he knew he would have to buck the powerfully entrenched union position. Since he couldn't stiffen company policies without a fight, he hired a labor lawyer to help out with the ensuing arbitration hearings.
The CEO carefully studied how the attorney put cases together. After the second of 26 arbitrations, he took on the job himself, using the lawyer as the final editor of material. He learned that much of what had to be done didn't require a law degree, and that arbitration hearings are more like business meetings than formal trials. In short, he learned he could personally handle a good deal of the procedural work and save the lawyer for the more heavyweight matters.
Behind the jargon of the labor lawyer lies a process, much of which can be understood and performed by an intelligent person willing to make the effort. Similarly, it can be demonstrated that products or functions that seem to be mysterious and abstruse are quite obvious and simple when the smoke screens of professional language are blown away. The CEO who understands this is slow to pay a long price for an overpromoted service.
For example, take my own field, accounting. Except in very unusual circumstances, the formation of financial statements from a company's trial balance is a simple process requiring more time than brains. Yet companies often hire certified public accountants to do this sort of work. A better use of the company's money would be to hire a CPA for just the amount of time it takes to teach the company's bookkeeper how to make up the monthly statements. The head of a small leather company who wanted more up-to-date information, but not at CPA prices, came up with that idea.
Until your own company is big enough to hire the specialists you need, chances are you, too, will continue to be forced to come up with solutions to problems in fields in which you claim no expertise. You'll be an administrative handyman who can fix 100% of your problems about 60% as well as the experts can. And if you're smart, when you need that other 40%, you'll rent it -- on your terms.