No business is entirely immune to big promises or slick advertising campaigns from top tier business consulting firms. When you work with big firms, you can expect big results, right? Not necessarily. In fact, the average consulting contract costs ~$105,000, has 6.7 assigned consultants, a duration of 11.4 months, and a 5.2 success & sustainability rating. Sobering metrics.
As a CEO or business leader, it is vitally important to educate yourself on the practicalities of aligning with a consulting firm. Sometimes you'll even have to discern reality from the fancy marketing brochures. Below are the FIVE biggest myths in business performance improvement consulting, and how to avoid these PRIOR to signing a high dollar contract.
Myth #1: Problems are solved 'for me and my business team'.
Have you ever wanted to get fit after the holidays, so you join a gym, and hire a fitness coach to help you get back into shape? If so, you know that the coach is there to motivate and inspire you, to help you design the right fitness regimen to meet your goals, and teach you to perform the exercises properly to avoid injury. However, at no time does your fitness coach offer to lift the weights or run the treadmill on your behalf. Sorry - this workout is FOR you and must be done BY you to accomplish your goals. Similarly, any business consultant that tells you (or implies) that they can improve your business without your participation isn't being realistic. Improving your business is a full contact effort, and requires you and your business team to engage fully to reap rewards. Most business teams can expect at least 30% of their time to be invested in improving their business performance.
Myth #2: The team of business consulting professionals has significant experience in the problem(s) they are solving.
Most large consultancies staff up for consultancy skills - data analysts, contract and sales specialists, client engagement managers, and tech-savvy staff. While these resources are talented, a surprisingly few have actual industry experience, and even fewer consultants - roughly 1 in 80 - have successfully led organizations in your industry or have achieved the improvement results you desire. When working with a consultancy, it is vitally important to get specific details on who will be assigned to your project and what related, successful experiences they bring to the effort. Otherwise, you are actually paying top dollar for resources to practice honing their consultancy craft or experiment on your business. Consulting expertise does not necessarily equal subject matter experience.
Myth #3: Consulting firms are fully focused on resolving my business issues.
The sad truth is that some firms are far more interested in engaging clients in multi-year contracts than resolving real business issues or sustainably improving performance for the client. The 'stickier' the client engagement, the better the margins and consultant leveraging. Test any potential firm by asking for their shortest contract terms. What are their guarantees? If contract terms of less than 12 months are discouraged or there are no hard-value commitments from the consultancy, the likelihood of your business realizing significant performance improvement - particularly within a reasonable timeframe like one year - is exceptionally low.
Myth #4: The consulting team assigned are 100% dedicated to my project.
Most large consultancies highly leverage employees across a wide array of projects. At any given time, your assigned team members are likely working on at least 5 other client projects. In fact, this burden on employees is the #1 reason for consultant stress and burn out. Leveraging across projects helps reduce costs and increases margins for the firm, but can also lower project efficiency / effectiveness while extending project duration. When aligning with a consulting firm, be sure to understand each resource's allocation to your project. Only you can determine if higher allocation costs are worth speed, lessened distraction, and quality results for your business ' improvement.
Myth #5: Consulting team travel to my site / business location is needed and helpful. Consultant travel to visit a client location can be impactful if necessary and rigorously managed. However, it is often expensive and disruptive for the client organization, particularly when weighed against the benefits. On average, consultant travel, accommodations, and meals comprise ~28% of contract overhead costs, yet deliver only roughly 3 hours of productive, results-oriented time per day of travel. Business locations that host consultants are often distracted by the consultants' presence, feeling as though they have 'chaperone duty' in addition to their regular work. With advancements in technology, any proposed consultancy travel should be highly scrutinized. To preserve your organizational effectiveness (and sanity!), consider making travel the exception, not the norm.
Knowledge is power in your business. Regardless of the consultancy path you choose, equipping yourself and your organization to proactively address and manage concerns pre- and post-contract signing is advised. We hope that this article serves you and your business - let us know your thoughts or get in touch with our team at www.alchemyperformancepartners.com
