"Evan McFee knew what he wanted when he hired consultant Amy Smart. When Amy turned up to present her recommendations and began pulling out elaborate artwork and product prototypes (Evan was expecting rough storyboards), it became
apparent that the two parties had completely different understandings of the project's parameters. The situation eventually erupted into a nasty disagreement and, without a contract to refer back to, Amy refused to turn over any work until Evan paid
$20,000 for work completed, and also refused to return Evan's $5,000 deposit."
The story and players are fictitious, but the theme is all too common: the consulting contract gone wrong. For the small business owner, the process of hiring consultants is fraught with landmines and pitfalls. Handled properly, a
consultant who is the right fit for the organization and project can provide essential expertise needed to grow the business and meet strategic goals. On the other hand, when the process is mismanaged, results can range from delays or lost customers to
lawsuits or potentially significant costs to "fix" mistakes.
To help you plan for success, consider the following 12 common consultant hiring pitfalls and strategies to avoid the landmines ahead.
Pitfall #1: My Cousin Bob
"My cousin Bob is a marketing consultant - you should call him," cites your biggest investor. The consequences of hiring a consultant strictly for "political" reasons can range from mild problems to outright disaster. On the other
hand, a consultant that comes highly recommended can be a great asset. How do you assess the difference?
By all means, consider Bob, but do your homework. If you neglect needs assessment or fail to request a proposal, it will be impossible to evaluate fit. Do both. And ask the hard questions: What experience does Bob have in your
industry? With organizations your size? What do Bob's references say about his results? Is there another consultant who would be a better fit for this project? Most importantly, never hire a consultant that you have doubts about!
Pitfall #2: Wrong Fit for Your Environment
Your usually cooperative staff are bristling at the pinstripe suits and directive tone of the consultants you have hired for their technical expertise. After two months of billable hours, your consultant is now presenting you with
solutions that would only work in a hierarchical environment, but not with your plant's team approach. What went wrong? For the best results, consultants not only have to have the required technical expertise, but also need to be a good fit with your
environment: industry, size, and culture.
Spend time reviewing key aspects of your organization's environment with consultants during telephone screening and interviews. Contact references that highlight the consultant's experience with similar environments. If you find the
right expertise, but the fit isn't as close as you would like, consider creative alternatives, such as pairing up the consultant with an internal resource.
Pitfall #3: Short-Cut Solutions
In one's eagerness to make a problem go away, it can be tempting to go for the quick fix solution to an organizational problem. When short cuts are taken, the potential impact can run from failure to achieve long term results to a
wasted investment in consulting fees.
Define root causes before jumping to solutions. If need be, break "problem identification" and "solution implementation" into separate phases. Define results in measurable terms and check references to confirm the consultant's ability
to achieve these results. If you find yourself deep in a project before realizing you have embarked on a quick fix, consider broadening the project's scope or looking at surrounding issues. If your consultant makes follow-up recommendations, take them
Pitfall #4: Lack of Readiness
When organizational readiness is lacking, even the best consultant's work can fail. If you neglect to get your team's buy-in, you can expect some resistance - from a disinterest in change to outright thwarting of the consultant's work.
Similarly, if a single project is considered in isolation from other related organizational issues, the long-term results of the consultant's project may be at risk.
Assess organizational readiness before you contract consulting projects. Talk to stakeholders about the project, ask for their input and secure the team's commitment. If you become aware of a lack of readiness after the project begins,
step back and re-assess. Be willing to pause, change the approach, postpone or stop the project altogether. Partner with your consultant and utilize their expertise in determining the best way to proceed.
Pitfall #5: Apples to Oranges
You scratch your head as you consider the three proposals in front of you. Despite your efforts in clearly identifying the problem that you need addressed, and sourcing consultants with the right experience, each consulting firm has
recommended such a different approach that it is impossible to compare the proposals. You feel as if you are comparing apples to oranges and it is difficult to make an intelligent decision in a timely fashion.
During consultant interviews you will learn about a variety of different project approaches that could be taken. Incorporate your learnings from these interviews by identifying the most desired approach and outline specific project
deliverables in your proposal request. Ask all consultants to propose on these same deliverables (apples to apples), while also inviting them to offer alternative approaches for your consideration.
Pitfall #6: Neglecting Reference Checks
Neglecting consultant references can be a dangerous practice, as any problems with previous projects and clients will not be uncovered. When you are aware of problems, you can either take steps to avoid the problem, or choose not to
work with the consultant at all.
Make time to conduct reference checks. Design questions around your selection criteria, and target similar environments and projects. Some good questions include:
- What type of project did the consultant perform?
- How well were the project objectives achieved?
- What type of relationships did the consultant have with employees?
- What benefit and value did the consultant add?
- What problems arose?
- Were problems encountered resolved to your satisfaction?
- Would you hire the consultant again?
Pitfall #7: Unclear Deliverables
Confusion over project "deliverables" can have serious implications. Your expectations may never be met, despite significant investment in consultant fees as the project progresses. Clarity regarding deliverables prevents conflict and
ensures that the project is effectively implemented in a timely manner.
Consider all the tangible pieces you expect to be delivered upon completion of the project. For example, if a report is expected, ask yourself: What issues should be addressed? How long should the report be? What format? How many
copies? Consider similar questions for all project elements. To avoid confusion, ask consultants to provide tangible examples of deliverables. Deliverables should be agreed to and specifically laid out in the contract.
Pitfall #8: Failure to Contract
The importance of contracting is often not understood, and failure to contract is perhaps the most serious pitfall in that it carries tremendous risk. If a problem arises, the impact of a failure to contract can vary from relatively
minor (misunderstandings or heated debates) to very serious (costly delays or lawsuits). A contract ensures important details are clarified and acts as a safeguard should problems arise.
Ensure each consulting project is documented in a "letter of understanding", or a formal contract. The choice will depend upon your environment, the complexity and scope of the project, and the needs of the parties involved.
Pitfall #9: Copyright Disputes
Disagreements over copyright are all too common. While copyright problems are generally the result of genuine misunderstandings and not malicious intent (often the client and consultant each have different perceptions), these are hard
problems to resolve. Failure to clarify ownership and copyright can have serious implications, such as: work stopping on the project, an inability to use the work performed by the consultant as intended, or significant additional costs.
During consultant interviews, ask questions such as, "Can we continue to copy and use the materials when the project is done?" or "Who owns the software?" or "Is there any additional cost if we expand the scope of our implementation?"
Outline your expectations regarding copyright when requesting proposals. Discuss and agree on copyright issues during contracting discussions, then clearly document in a letter of understanding or formal contract.
Pitfall #10: Role Clarity Lacking
The best consulting interventions come about as the result of a close partnership between the consultant and client. But if external (consultant) and internal (client) roles are unclear, misunderstandings, errors, duplication or
project delays can occur. If roles have not been clarified or communicated well, internal staff may feel threatened by the consultant. The consultant may experience frustration, or may even be denied access to information or support necessary to execute
the project effectively.
Consider, in advance, where internal staff may, or may not, be able to support the project. At the time of contracting, communicate internal and external roles to all stakeholders. A great tool can be an initial project team meeting,
with both internal and external stakeholders in attendance.
Pitfall #11: Scope Creep
When a project grows beyond its original parameters this is commonly referred to as "scope creep". For those who have experienced it, it's a pitfall to be avoided at all costs. Scope creep generally arises if the original project
parameters and deliverables are unclear, and is compounded by poor communication or follow-up. As well, an unscrupulous consultant may become so focused on uncovering potential new work, that the existing project is not completed effectively.
Clarify project parameters and deliverables up front, and document them. Feel free to let consultants know that you are open to hearing recommendations for other projects - after the existing project is completed. Don't fall into the
trap of adding verbal extensions onto the original project. Contract any additional elements as separate projects, and document clearly.
Pitfall #12: Turning a Blind Eye
Your consultant's weekly report arrives a day late. You get an uncomfortable feeling in your gut during a project team meeting with your consultant. Whatever the situation, none of us likes bad news. But turning a blind eye to
consultant problems is inherently dangerous. Small problems can grow if ignored, and can be warning signs of unrelated, potentially more significant problems to come. Your failure to act promptly could also be interpreted as satisfaction with the
Keep your eyes open for warning signs, and trust your gut feeling. Deal proactively with problems as they arise, no matter how small. Have a sounding board that you can turn to for advice - a trusted colleague or legal council,
depending upon the situation.
If you are living out any of these pitfalls as you read this article (maybe Bob is already working on a project for you), take a proactive approach. Communicate regularly with your consultant and be alert for any problems. If need be, take
time out to re-clarify expectations and project deliverables. And begin planning now to use a consultant selection process (see sidebar) to avoid the landmines with your next consultant project.
THE BEST PREVENTION:
USE A CONSULTANT SELECTION PROCESS
Using a clearly defined consultant selection process can prevent most pitfalls. This not only ensures the best fit and optimum use of resources, but allows you to maintain decision-making integrity and prevail over
high-pressure sales tactics. A good process also makes it easier to compare competing proposals, allows for delegation of some steps, and provides documentation to fall back on if things go wrong.
Stage 1 - Needs Assessment
Take time up front to carefully consider your needs, including: desired end results (what do you want to achieve?), available budget, organizational readiness, project scope, desired process / approach, project
deliverables, relevant background, questions, rough timeframes, and selection criteria (what characteristics, skills and experience should potential consultants offer?). As well, identify internal stakeholders and outline the decision-making process to
Stage 2 - Sourcing & Screening
Your goal is to select the best of the best. If you fail to source multiple consultants, you risk overlooking potential qualified consultants, missing the best project approach, ending up with a poor fit, or becoming
stuck if the seemingly ideal candidate turns out to be unsuitable.
Start by sourcing multiple consultants (via networking and research, such as professional associations and trade publications), conduct telephone screening calls with your top leads, then hold face-to-face interviews to
learn more about consultant offerings, experience and possible project approaches. Then narrow the field down to a short-list of 2-5 consultants (3 is optimum) who meet your selection criteria.
Stage 3 - Requesting Proposals
Proposals may be as simple as brief written quotations, or as elaborate as formal request for proposals (RFPs) and presentations - it depends upon the project and organization. Regardless, require all consultants to
propose on the same core project deliverables (this allows for an apples-to-apples evaluation later), while still inviting alternate approach suggestions.
Stage 4 - Evaluating Proposals
Using the decision-making process you established in Stage 1, evaluate each proposal against the selection criteria. Start with independent stakeholder review, then joint evaluation.
Stage 5 - Consultant Selection
Before formalizing your decision, tie up any loose ends, such as outstanding questions, exploration of alternative approaches, or benchmarking visits with satisfied clients. Conduct reference checks that highlight the
consultants' track record with similar organizations and projects.
Stage 6 - Contracting
Contracting may take the form of a letter of understanding or a formal contract, depending upon the project and parties involved. Regardless, ensure the following are spelled out in writing: deliverables, timeframes,
fees, expenses, cancellation, confidentiality, and copyright. It can also be useful to agree in advance to a problem-solving process.
Beyond the Steps
Once the best consultant has been contracted, the real project work begins. To ensure the best results, effective project management is key. As well, proactively troubleshoot any problems that may arise during the life of
the project, and plan a process to evaluate the project's results upon completion.
Process reproduced from "The Best Fit, The Best Results:
Successfully Hiring Human Resources Consultants"
by Roberta L. Westwood
© CCH Canadian Ltd., 2000
Roberta L. Westwood, C.H.R.P. is President of Westwood Dynamics Learning & Development (www.westwood-dynamics.com) and is based in West Vancouver, B.C.
This article was first published in Your Office magazine (www.youroffice.ca), December 2000, and is copyright© Roberta Westwood. You are welcome to print a single copy of this article for your personal use, or to share the link with
others. For permission to reprint or distribute in any other manner, please contact Roberta Westwood at robertaw@westwood-dynamics. com
Roberta's book, "The Best Fit, The Best Results: Successfully Hiring Human Resources Consultants" was published in 2000 by CCH Canadian Ltd. This book can be ordered directly from the publisher, CCH Canadian (1-800-268-4522) or online from
www.amazon.com. For more information on Roberta's book - including sample chapters - please visit www.westwood-dynamics.com
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