I have two types of clients. Those that think I am too expensive and those that think I am too cheap. Both are suspicious.
I feel sorry for the former and very happy for the latter. Yet how does this conundrum come about?
The engagement of a consultant begins in a number of ways for a number of reasons. The major scenarios are;
1. You have a non-specific problem which requires some creative thinking and possible innovation (you are buying a creative process);
2. You have a specific problem which requires an efficient and predictable outcome (you are buying a solution);
3. You need to brainstorm 1 to be able to reach 2.
So are you sure why you are engaging a consultant? Do you want Brains work, innovative fresh ideas, or do you just want a pair of hands to help out? There is a big difference in both approach and outcomes. The first is consulting, the latter is really contracting. In fact David Maister (Managing the Professional Services Firm) divides consulting work into three major styles defined by the outcome you need:
Expert - Brains work solving unique problems. Time is irrelevant here but results are critical. Strategic, organisational change and new design work falls into this category. This is defined by a partnering model and the client relationship. Good relationships with a creative team should yield ongoing results and competitive advantage.
Experience - Hiring a firm who has done this sort of work before and can therefore save you a lot of time and money by utilising their expertise and processes. Many law or market research firms fall into this category. This is about product and quality of service.
Efficiency - This is straight out commodity work. Repeatable processes you require done at a standard quality and price. This is the sort of work now being outsourced to India by the banks, software developers and even some accounting and legal firms. This is primarily about price and time.
Many consultants, when offered, will jump at all three styles of work. They argue they are efficient, have a solution and that they can help you solve problems. In fact these are highly specialised areas of service which require completely different approaches and business structures. Yes small generalist, and large multi-division, firms do exist, but even within these you should still look for individualised approaches to feel confident they can deliver. Yet surprisingly most consultants use the same fee structure regardless of the style of work (this is an indication that they are fee centric, not customer centric - beware! )
Hence an experienced consultant doing efficiency work will always look expensive. Conversely a good process consultant who helps your organisation to solve problems and create unique opportunities will always look cheap since the ‘value’ they can bring should be many times greater than their fee. Good consultants will often charge a value-based fee. The result may be nothing. This is the risk. Yet the process should always provide a rich learning experience for all involved. You can ask the consultant to separate process and performance fees. This will lower your risk and provide some incentive to the consultant for a tangible outcome, not just another report.
A good consultant always brings an enquiring mind and modicum of cynicism to any task. I suggest these ‘fresh eyes’ are what you are really buying otherwise they are just a pair-of-hands and will always look expensive.
In summary then, your first step to a successful consulting engagement is to understand your needs sufficiently to define which style of service you require. One way to test this is to ask your prospective consultants which category they consider they fall into and why. This will expose their capability and allow you to evaluate if they will fit your needs and budget. Otherwise you will always remain suspicious.
