Evaluating Consulting Firms
In my last post, I discussed why hiring a consultant is often the most effective way to address a business challenge or opportunity. But once you have made the decision to engage a consulting firm – how do you know which one is the right one to meet your business needs? Consulting companies typically provide very specific expertise; not all consulting firms are right for every company or every engagement. Not even Caiman!
Businesses commonly approach this by soliciting bids from several competing firms. They use this information to make a decision based on two primary factors: price and relevant experience of the consultant pitched to perform the work (Sometimes, clients ask us to submit a resume with the name of our company removed so that they can make a “blind pick” based solely on the consultant’s skills and experience).
This approach ignores some critical factors that can contribute to the success of a project. The price of the work and the experience level of the consultant are certainly important, but they are not the only things that matter in deciding on a consulting firm. Let’s examine the major important success factors.
The profile and experience of the consultants in the organization.
When you hire a consultant, you are not just getting the abilities of one person, depending on the structure and working style of the company, you may benefit from the organizational knowledge as a whole. Collaboration is one of our core values at Caiman. Our consultants work together and leverage each other’s knowledge and skills. We retain experts in specific technologies or industries and encourage them to share their expertise across the organization for others to draw upon. When we interview with clients, we like to talk not just about the primary consultant that will be doing the work, but our overall expertise as an organization.
The background and skill set of the firm’s leadership team.
This is a corollary of the first point but it’s worth breaking out because the leadership of a consulting firm makes a direct, tangible impact on hiring and thus a project’s success. Often this matters most when first scoping the project and figuring out the structure and budget. Our senior leadership team has decades of experience in consulting and industry which they can bring to bear in strategically mapping out a successful plan with our clients. We are also looking for the right type of individual both from a skill set but also a personality and core values perspective that we know will best match our clients.
The cost structure of the consulting firm’s fees.
This is an important point for clients and the consulting firm to discuss together. Projects with a clearly defined scope often benefit from a fixed-fee model where the price is based on specific deliverables. Projects with less defined scope are more often billed on a monthly or hourly basis. A good consulting firm will provide transparent pricing options and have an honest discussion that leads to an equitable arrangement for both sides.
The ability of the consulting firm to respond to issues and risks.
Consulting engagements can go awry in all kinds of ways once the engagement has kicked off - resources, timeline, and budget can all be affected by negative risk events. The best consulting firms help their consultants identify those risks ahead of time, plan to avoid them, mitigate them when they occur, and communicate status to the client early and often. Our clients sleep well at night because they know that our consultants have senior managers that can step in to help bring things back on track if something goes wrong and a team behind them to assist as needed. They also know that we won’t hide issues from them and will always keep them up to date on the true severity of problems along with our plan to solve them.
Some firms operate as what we like to call “body shops” – they match people with projects and then forget about them, similar to traditional temp agencies. We choose to offer a greater value and level of service by keeping the leadership engaged throughout the project, and while Caiman isn’t the right firm for every consulting engagement, I encourage everyone hiring a consultant to consider the factors discussed when selecting a firm.