Consultants Can Be Scary

 


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Utilize the Discovery Analysis to Ease Your Fear of Using a Consultant

Consultants can provide real value on many occasions but they can also be your worst nightmare. Some clichés include;

“A consultant will ask you for the time and then steal your watch. ”

“Two things you don’t want to watch - Sausage being made & a group of consultants trying to solve a problem. ”

Worst Nightmare

The Hanging-on Strategy - Consultants can become your worst nightmare in many ways. Some consultants have perfected hanging-on and use it as a proactive growth strategy. When a project starts nearing its end, new problems seem to mysteriously get identified. It may start as a training issue; the training issue grows into a management issue, a technology issue, a channel issue. Each issue can turn into another consultant project or an extension of the original project. Before you know it your costs for the consultant’s advice and assistance becomes a major factor on the expense side of your profit and loss statement.

Unclear expectations- Some consultants are so skilled at presentations and proposal writing that deliverables become very intangible and they are not measurable. If they are not measurable, accountability goes out the window. This alone can turn your consulting experience into a nightmare. The scope of the project may have a continuous creep that costs you more and more money. Deliverables should be clearly defined and documented. However, even if you have done your homework and feel you have clear expectations things can go wrong.

Employee involvement -Your risk of failure is exponentially higher if you have not involved your key employees in the decision making process of hiring a consultant. It is essential that you have employee buy in when you decide you need a consultant.

Accountability -Consultants like to say they can lead a horse to water but they can’t make them drink. In other words, consultants can’t execute the plan for the company. As a result, it is very difficult to hold consultants accountable for the results. Often times the consultants make a fantastic presentation and sell their firm based on expertise they don’t really possess. They are skilled at quick research and can be convincing in demonstrating their breadth of knowledge about your business based on this quick research. On many occasions the impressive partners of the firm may seal the deal and then send in a bunch of MBA kids to do the work. It’s a fantastic learning process for the MBA’s that you end up paying for.

Who is in control - Hiring the wrong consultant can be dangerous, it can cost you sales, profits and even employees if you are not careful. Don’t turn your business over to a consultant. Don’t make the mistake of thinking they know your business better than you. There isn’t any consultant out there that knows your business better than you and your employees know your business. If you do hire a consultant, stay involved and manage the process.

A variety of flavors - Consultants come in a variety of flavors. They consist of former sales people, former vice presidents, MBA graduates, former CEO’s, former accountants, and even former waiters. There are many professional career based consultants that have developed impeccable reputations. There are also a lot of consultants that are consultants because they are between jobs or retired and bored. Most consultants can be very convincing of their expertise and many can back it up with performance. But, there are those that sound impressive simply because they are exceptional speakers and presenters. Some quote problems similar to what you may be experiencing from work with prior clients. That in itself does not guarantee that they can help solve your problems. Some can, some can’t. Some may do an excellent job for you but some may not.

Walk the Walk - The problem with some consultants is the fact that they haven’t really walked the walk. They haven’t walked in your shoes. Most have some business experience but many have never owned their own business. Many lack the entrepreneurial experience of starting a business from scratch and growing a substantial revenue stream. Some have never owned or sold their own business prior to becoming consultants. Many lack the experience of running a family owned business, meeting payroll or managing cash flow. Some are well educated, some are not.

The Value of an Experienced Consultant

The right consultant can provide tremendous value to your firm. Just having an unbiased, outside pair of eyes look at your firm can reveal things that you as president and your executive staff can’t see. This is not uncommon because you’re caught up in the day to day operation of your business. Additionally, a consultant does not have the emotional, compassionate attachment to people and processes that you and your management team have developed. As a result, the consultant can help you identify and resolve issues that have gone unnoticed or ignored.

Consultants provide value not because they can do things you don’t know how to do but they often provide value because you and your team may not have the bandwidth to devote the time necessary to address many issues your company may face. This is especially true if those issues involve market or channel research. Research projects and technology projects are often the types of engagements that fall into this category. Training and employee development support are two other area’s where consultants provide exceptional value. The consulting industry is a huge and growing industry that is fast approaching the $100 Billion Dollar mark. A market of this size attracts many players. There are many professional, competent and trust worthy consultants out there but there are also some that may not be able to live up to your expectations. Sales & Marketing Management Magazine Surveys have indicated that over 75% of business executives responded that consultants are necessary for business success. These same survey results concluded that over 50% of the firms utilizing consultants were dissatisfied or only somewhat satisfied. Companies with less than $10 million in revenue reported a much higher confidence level in consultants than companies with over $10 million in revenue

So What Do You Do if You Think You Need a Consultant?

Start by utilizing the creativity and initiative of your own staff to identify the extent of your internal issues. The perfect vehicle to do this is called a “Discovery Analysis”. The discovery analysis utilizes a questionnaire that stimulates a thought-provoking process designed to identify issues and challenges that impact company profitability. The following sales discovery analysis is an example of this process. It will identify issues and challenges within the sales functions of the company. Being sales specific means that you must involve key sales personnel in the process. The independent answers to the questions posed should direct you to very focus-specific areas within your organization that need attention. The Owner/President, Vice President of Sales, Sales Managers and both inside and outside sales representatives should complete this discovery analysis.

A discovery team meeting should be held to review the results of this process. Each team member should prepare an independent S. W. O. T. (Strengths, Weaknesses, Opportunities and Threats) analysis based on their responses after completing this questionnaire. Only the three most critical areas in each category should be recorded:

Strengths: The three biggest strengths the company has that create competitive advantage.

Weaknesses: The three most critical weaknesses that must be addressed to maintain or create new competitive advantages or at a minimum put you on a level playing field with the competition.

Opportunities: The three biggest opportunities for your company to create competitive advantage, improve market share, increase revenues or create cost reduction through process improvement.

Threats: The three biggest threats created by either the internal or external environment. This may include government regulations, internal politics, competition activity or other external influences.

All responses should be collated from each group. Common areas of concern should be highlighted. A minimum of a one-day retreat attended by all management and key personnel is encouraged to ensure that proper attention and discussion is given to every area of concern that is identified through this discovery analysis. The following ten questions are examples of the 75 questions on the sales discovery analysis questionnaire.

Sample Sales Questions:

1. Do you record and monitor customer complaints?

2. Do you maintain a customer complaint database to track patterns and identify recurring problems?

3. Do you use this information to improve performance and increase customer satisfaction?

4. Do you solicit customer feedback?

5. Do you provide customers with a single point of contact?

6. Do you track customer satisfaction with internal operating statistic fill rates?

7. Can you identify waste in operating costs, such as the high cost of errors?

8. Do you receive phone system statistics to analyze calling behavior?

9. How do you measure customer satisfaction? Do you have a formal system? Such as a report card?

10. Does your sales force involve suppliers in the selling process?

You may find that by using this process you have identified the issues clearly enough that you can address them without the help of a consultant or you may just need to hire a “Team Coach” to help you and your team find solutions and act on them. (See team coaching www.ceostrategist.com) At the very least you will have identified the problems clearly enough to set specific deliverables, deliverables that are measurable, for discussion with potential consultants. If you decide to go forward, seeking the assistance of a consultant, interview several. Check references and ask for a reference from the consultant from a client where the project failed to meet expectations. Don’t accept the answer that none of their projects ever failed. Every consultant has had projects that did not meet expectations. Find out why from their clients.

Armed with your information from the discovery analysis process, you are now in a better position to define the results expected from the consultants. Ask for a proposal that has clearly defined deliverables. Don’t be afraid to put a portion of their fee at risk based on results. Make sure that you and the consultants agree on a specific timeline. (Important - Ask for a fixed price proposal)

There are some highly qualified, highly effective consultants specializing in wholesale distribution. The more you are able to define your expectations, the better your chances of being pleased with the results. Do your homework.

Dr. Rick Johnson (rick@ceostrategist.com) is founder of CEO Strategist LLC. an experienced based firm specializing in strategic leadership . CEO Strategist works in an advisory capacity with company executives in board representation, executive coaching, education and training to make the changes necessary to create competitive advantage. You can contact them by calling 352-750-0868, or visit http://www.ceostrategist.com for more information. Rick received an MBA from Keller Graduate School in Chicago, Illinois, a Bachelor's degree from Capital University and his PhD in strategic leadership. E-mail rick@ceostrategist.com for a complete list of sales questions or copies of the discovery analyses for human resource issues, planning, inventory management, operations management, and profit and margin management.

(1946)

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