Social Media. I find you either love it or hate it. In our case, we love it. With that said, it does come with its set of challenges.
Social Media gives many a voice that without it they never would have had; thereby creating amazing opportunities for others that otherwise would never have had them.
With that said, it also can create a lot of confusion. Most specifically in the consulting and coaching industry. You see, coaching and consulting is one of the few businesses that does not "require" accreditation. There are of course accreditation opportunities available for coaches and consultants to differentiate themselves from others, but truth be told the barrier to entry is lower than almost any other industry. If you have a phone and an opinion you can consider yourself a consultant.
Coupled with the fact that on a dollar per hour basis consulting is one of the highest paying professions out there, it is no wonder that there is a tremendous increase of additional consultants entering the market. Due to that, it is very important that you do your due diligence and hire the right consultant for your organization.
Identifying the Need
There are some core reasons why organizations typically hire consultants:
- They don't have the specific skill set required to accomplish the task required
- They have a short term need for assistance on a specific task or requirement
- They "cannot see the forest through the trees" and need to bring someone in from the outside to help them see their business from a different angle
The need that organizations have will greatly determine the type of consultant they should hire for their organization. Many consultants are individuals rather than organizations. Just like anything it is very difficult to be great at everything. Therefore if an organization is hiring an individual, ensuring that specific individual can assist with the specific need will ensure a better fit for the organization.
Questions to Ask
Below you will find a list of core questions we recommend asking a consultant before engaging to ensure they are the right fit.
1. How long have you been in business? How long have you been a consultant?
a. Due to the low barrier to entry, there is a tremendous amount of relatively "new" consultants in the marketplace. Dependent on your need the time that they have been in business may or may not be a priority for you. If you are looking for someone to complete a tactical task or project for you, and their experience prior to developing their own consulting firm aligns with your need tenure may not be important. However, if someone is newer and their model and process are not yet proven and their resume does not support the work they are doing now, tenure may be more important to you. Tenure will also impact what the consultant is doing on a day to day basis. This leads to question #2.
2. How many clients will you manage at any given time?
a. Although consulting is a highly compensated $/HR position, the reality is that it is also very difficult and typically is not incorporated with a company credit card and car. Therefore consultants often find themselves balancing their business with their prospecting to build their book of business. If your consultant can tell you exactly how many clients he/she will manage and it does not seem exorbitant this would not be a concern of mine. With that said understanding where their focus is at is important.
3. What is your process?
a. Just like an organization oftentimes consultants rely upon their experience and expertise rather than a documented process. Although a consultant may be credible based upon that allow, that does not mean he/she will be able to transfer that knowledge in a clear and concise fashion to other people and other organizations. Having a documented process is the foundation of being a consultant.
4. What results can I expect?
a. If a consultant is working on a specific project or task this is an easy question to answer. If, however, the consultant is working on a more strategic project for your organization this can be a tougher question to address. With that said, having some way to measure the impact of the consulting work, is important for you as a business owner to evaluate the impact of such work. Good consultants typically have ways to evaluate their work, even if they tend to be influenced by other factors of the business.
5. Who is on your team?
a. As the saying goes, "a jack of all trades a master of none". The cost of client acquisition is the largest cost for consultants in their business. Many consultants do not make it in consulting not because they are not good at consulting, but rather because they are not good at selling. Due to this, it can lead to consultants "signing up" for projects that they are not adequately qualified for, just to maintain the relationship with a customer. This may be ok for you and your organization dependent on need, as onboarding new consultants is a job in it of itself. However, if it is not ok for you, take the time to treat your consultant like you would an employee. There are specific roles and responsibilities in companies and having one person fill too many roles and responsibilities increase the organization's risk. However, if your consultant has a team of experts and you are able to tap into that team of experts with their own unique skillsets you may be achieving the best of both worlds.
6. What is your experience in our industry?
a. Industry experience should not always be a requirement for a consultant. Sometimes it can be a good thing, other times it can be a bad thing. Not having industry experience can be a benefit, as just as you can, consultants that are too ingrained in specific industries over a long period of time, can also have blinders on to unique and different ways to approach business challenges. That said, having expertise can also be a tremendous benefit if there is a unique skill set, job or "business language" that is required for your needs. Take time to consider if the experience is important for needs or not.
7. How will you get up to speed in our practice?
a. Experience in an industry can help tremendously in getting up to speed with a practice. There are other ways, however, in which consultants can shorten their learning curve as well. It is often expected that organizations invest their money to bring consultants up to speed with their organization. This is no different than hiring a new employee. There is an on-boarding period of which the employee is not a fully productive member of the team, but is still paid to the employee. The key is to shorten that period of time as much as possible for the consultant. Consultants often shorten their learning curve through bursts of intense engagement through processes such as current state analysis, assessments, and evaluations. We would not encourage you to move forward with a consultant who does not have an onboarding procedure and dives right into providing you advice. There is a reason why in the US we are "innocent until proven guilty" as we know as more information is provided, the story can change. For that reason be cautious of consultants that are too quick to diagnose and prescribe a solution. Remember prescription without diagnosis is malpractice.
8. Where would we meet?
a. Almost everyone loves a good coffee shop, but not everyone feels comfortable pouring their heart and soul out at a coffee shop. Due to the low barrier of entry and shift to remote working cultures, many consultants do just this. They operate out of a coffee shop. While you may be completely comfortable with this, and is so, that is ok. Not all people are. Depending on the type of consulting you are looking for, it can become very personal and very intimate, in some cases emotional. In many cases getting to that deep layer of emotion is necessary to have the breakthroughs required with consulting. This can be difficult to do if the consultant does not have a private location for you to meet.
9. Are you certified?
a. Although not always required it can be for specific projects or tasks. Verifying this so that you are not putting your organization at risk is important. It also tells you something about the consultant. Every level of certification increases his/her commitment to consulting and providing value for their clients. In lieu of being part of a larger organization certification can be a great substitution or addition.
10. Do you have references?
a. This one is challenging as depending on the work the consultant does, much of the work can be of private nature and obtaining references and or testimonials is directly conflicted with the privacy expectations associated with the consulting work. That said, asking is always a good best practice.
11. How do you bill?
a. There are four typical billing practices for consultants: 1) Project-Based 2) Hourly 3) Contingency Based 4) Retainer based. Understanding how and why your consultants bill the way they do is important. Each billing type comes with its own benefits and disadvantages. Project Based can save you money in the long run if the consultant under assesses the scope of the project. If you are concerned about the results and not the $/hr rate this can be a great way to hire a consultant if you are pleased with the results. Hourly billing can be easier to determine exactly what you are getting for your time on a $/HR rate, it can, however, cost you more in the long haul (potentially) than an on-going retainer. It also can be stressful and hinder the progress if you are concerned about getting a bill for every call, email or meeting you have with your consultant. Contingency Based can be great as you only have to pay if the consultant is successful. It can, however, cost more in the long run than a $/HR basis or Project Basis. If you are happy with the result, many people are ok with paying the premium. It can also be low risk if you don't achieve the desired result. One thing to be wary of is if your project/work will get the attention required to achieve a successful outcome if your consultant is not getting paid while the work is being done. Retainer based agreements can be great arrangements, especially when in a high touch/high frequency consulting relationship. They are a way to get the service you require without having to be concerned about receiving a different unique bill every time you work with your consultant. Just like anything, however, it can have its disadvantages as well. Some consultants who bill on a retainer basis have a hard time letting go when a relationship has reached its endpoint as they count on that money as an annuity. Building routine checkups into your consulting relationship with your consultant can be an important step to minimize your risk with this.
These are just a few of the many questions you should be or can be asking your consultant or the next consultant you look to hire. If it has four wheels and drives and stops and meets all requirements of the DMV it's a car but there is a clear difference between a Ford Taurus and a Bentley. Knowing the right questions to ask before hiring your next consultant can be key to determining the next "car" you drive.
If you are looking for a consultant for your practice, please contact us for a free consultation and we'll be happy to address the questions above as it relates to our practice. As this article indicates, we are not the best fit for everyone, but we are happy to help you determine if we are, and if we are not, we will gladly point you in the right direction.
