Why companies hire consultants
Hiring a consultant can be a hard choice. The perception for most business owners is that consultants are too costly and time-consuming. When you work with the right consultant though, that doesn’t have to be the case.
Business owners usually start thinking about hiring a consultant when one of the following situations occurs.
- After identifying specific goals that your business is working toward
- A need to bring focused skills or knowledge to your work
- To mediate a dispute or difficult situation
- You need a fresh perspective on a project or strategy
Finding the right consultant
Having a clear understanding of your specific business goals and needs for hiring a consultant can make a big difference in finding the right fit.
Here are the 5 things for business owners to consider.
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1. Communication
Communication is always important in business - what’s most important when choosing a consultant is that you are speaking the same language during your conversations. Some business owners walk away from conversations with consultants thinking ‘They said a lot about X but I’m not sure what the next steps are.’ or ‘The consultant said X so that’s what we’re doing.’
To avoid this confusion, you (and your consultant) should set clear guidelines in terms of how much communication is adequate and what information you’re looking for in progress updates, meetings etc. In many businesses, terms might mean different things or have their own industry jargon (for example, an Operations team in one business may do something drastically different than in another) so check in frequently that each side is communicating clearly to ensure you’re being efficient with your time and money.
2. Credentials & Experience
Depending on your goals, credentials and experience may mean more in some cases than others. For example, someone giving you legal advice should surely have the credentials needed to be a lawyer in the area of law you’re requesting guidance on. If you’re in the market for a technology consultant, they may not have the tech equivalent of a Juris Doctor but many years of experience or a relevant professional certificate or degree instead. In any case, business owners should take the time to consider how the consultant’s degrees or experience relate directly to their needs.
3. Time Commitment & Type of Consultant
Another important distinction to make when deciding to hire a consultant is time. Consultants typically have more than one client at a time, so discussions regarding how much time they have available to commit to your project and your own preferences for how involved you’d like the consultant to be are paramount. A good question to ask yourself to get started is: Are you looking for an extra pair of hands or more of a collaborative approach?
An extra pair of hands would be helpful when you have a specific task or project, usually short-term, that your team may not have the time or expertise for. You can hand over all the relevant information into your consultant’s capable hands and send them to work. This approach will usually cost less than a collaborative consultant, as the consultant is primarily implementing your project as opposed to a more advisory role, but may not be the right answer for longer term, larger projects or higher level needs.
A collaborative consultant generally functions as an extension of your team to accelerate your higher level goals, usually longer term, but won’t necessarily act as a surrogate manager implementing orders or a counselor solely giving guidance. They will blend their knowledge and expertise to help your team solve and prevent problems - not just give you a hasty answer to put out one fire. Many consultants will work as both an extra pair of hands and a collaborative consultant depending on the situation so knowing when you need each can helpful in breaking down and analyzing your costs.
4. Interpersonal fit
A consultant is someone you will (hopefully) be talking to often and someone that will have a lasting impact on your company. If you find that you’re not comfortable for any reason during conversations, when asking questions or they want to lead you down a path in contrast with your values, they may not be the right consultant for you. And that’s okay! Your consultant shouldn’t be another hurdle to jump over - they should be helping you knock down those hurdles so make sure you find someone whose values and experience you’re comfortable with.
5. ROI
This is likely the mostly important consideration. What are you getting out of hiring a consultant? After getting an understanding of your business and the issues that led you to seek outside help, your consultant should be able to give you a fairly decent summary of your ROI up front. If you’re looking for a capital infusion and hired a consultant to prepare your business for sale, a portion of your ROI might include a plan for adjustments to your insurance policies and HR practices which would lower your risk and make you more attractive to investors, for example.
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