Consultants? No thanks (or yes please)!
Written by Chris Barling
Tuesday, 03 May 2011 00:00
In business, sometimes it feels like I’m over-run with people trying to sell me things. Nowadays this includes increasing numbers of professionals. It’s not just accountants and lawyers, there’s sales and PR advisers, IT companies, marketing and strategy consultants. Name the business function and there are the guns touting for hire.
In my experience, the consultancy you receive is as good or as bad as the individual consultant. Each individual can only work with a limited number of clients as capacity is finite. Nor is it easy to get a valid recommendation as personal chemistry comes into it, in contrast with buying a piece of equipment or software where making a good choice is much easier.
I once asked my accountants to recommend a lawyer and they named a specific individual. I approached the firm but unfortunately the actual professional I got was different. The recommendation was meaningless.
The good news is that professionals can provide great value when used the right way. I’ve used consultants for Health and Safety and HR and got immense value, saving me lots of hassle for little outlay. Once I drafted my own contract, but it turned out that if I had used a lawyer it would probably have netted us a couple of hundred thousand pounds extra. Hindsight is of course a great thing!
Used the wrong way, consultants are an enormous waste of time and money. They can also use the assignment for on-the-job learning, then move on to educate your competition. And your own people can lose heart when they see all of the interesting work going to outsiders.
Consultants can provide great benefit, but they should come with a health warning. Here’s my quick guide to getting the most from them:
- Can you do it yourself? If so, why are you thinking about consultants or professionals?
- Do the professionals/consultants actually know more than you? If not, don’t be the one that educates them
- Is the work something that’s important, involving expertise you will need in the future? If so, make sure you end up with the knowledge in house
- Is the work simply better done by outsiders? I’ve been using a particular PR company for a while and it excels at keeping up contacts and relationships with journalists because it does this across several clients. In a similar way a creative agency may benefit from having a critical mass of creative types working together
- Would consultants be cheaper? Not everyone can afford to have an in-house legal adviser or qualified accountant. So if you are small, paying someone to only work the days you need usually works out cheaper than trying to do it yourself. Once experience and liability insurance is taken into account, it can be lower risk to boot.
This is an important topic and managing critical skills is vital in a modern economy. In my opinion, knowing the right time to look outside and knowing how to manage external resources is one of the key skills for business success. Good luck with cracking the code.
Chris Barling, chief executive officer, co-founded ecommerce and EPOS systems vendor, Actinic in 1996. Originally published on Business Matters.
