Nothing says brilliant execution like a Request for Proposals (RFP) that sings to its potential...
Among many professionals, the temptation to work alone, without the support of peers, is high. Innovative business people understand the need for connections with peers, with consultants, with journalists, and with the public at large. Great professionals need to build a network of peers, learn from experience of others, reach collective critical mass, get sparring partners, cherry pick best practices, and stay current on the latest trends.
The situation of procurement professionals and particularly the one of those in charge of procuring consulting services falls into this category. Procuring consulting services is quite different from procuring goods. Consulting is a complex industry often described as a matrix of capabilities and industries. Just add a layer a hard and soft skills. A zest of fee structure. And you have got yourself in the shoes of many Consulting Procurement leaders. They need to connect with peers to be able to exchange about their daily challenges with people who can actually understand what they are facing.
The easiest solution is to look into your pool of existing providers, and choose pick from them. However, the best consultant for one project is not necessary the best for the next one.
1. Build a Network of Peers
Even though Companies can have a significant budget for Consulting Projects, most Consulting Procurement executives handle a limited number of project in relative isolation. Many of them have been trained with core-business procurement, or indirect procurement. So, when facing consulting projects, they are very tempted to reinvent the wheel each time, or to just apply the sound principles that they have learned in their previous jobs. Just like this procurement leader, working in a railway company, who insisted in adding a 10-year guarantee clause in a consulting agreement, “because that is the company policy”.
Rather than just seeking consulting procurement information through only books and online material, find ways to connect with peers in your industry. Trade shows, a community of practice, professional organizations, and firms who specialize in networking consultants with clients are all important tools to connect with peers.
2. Learn from the experience of others
Exchanges with peers from diverse backgrounds, culture and activities give professionals the ability to discover new perspectives on consulting procurement, and learn about cases that you haven’t face yet. Increasing your surface of exchange will increase your exposure to the variety of situations faced by your peers.
And who knows. Someone in your network may have faced the same challenge…
This increased surface area multiplies the opportunities for growing as procurement leader by learning from practical cases, sharing challenges and identifying best practices. You can learn from peers, academics, journalists, as well as consultants. This community of learning empowers you to not only increase learning, but facilitates the reach of critical mass.
3. Reach Critical Mass Collectively
Many rare skills, such as consulting procurement, are acquired and maintained on the field through facing again and again the same issues. As a business professional, your services are limited by your ability to access enough information to identify trends and best practices in your field. It is hard to reach that critical mass of information to allows you to master your skill.
With more peers around the table, you accelerate the building process and guarantee that you are able to reach that critical mass collectively. Through your peers, you each gain momentum and reach the critical mass necessary to succeed faster.
4. Get Yourself Sparring Partners
Not only does collaboration increase learning about specific situations and projects, it helps you improve your internal processes at a faster rate as well. Two heads are better than one, and two sets of hands go faster. Although it feels risky for business leaders to open themselves up to even one peer, let alone a network of peers, the open source revolution in software and computing shows the power of collaboration in a field which was driven by secrets and control for many years.
Sharing about Consulting Procurement does not mean you risk to lose your competitive advantage or breach confidentiality, because you can just decide what you share. Good networking merely takes others’ work and integrates it with your own business so that everyone is empowered to grow more. Networking defines relationships based upon the level of connectedness you have with your peers: the more connected you become, the more meaningful the interactions become.
5. Cherry Pick best practices
A key part of building a network of peers and increasing your collaborative processes is to be able to identify the best practices as a group. Before integrating in your own processes, think about how it would fit with your strategy, your organization and your existing policies and what impact it would have on other processes.
Let’s say you have heard that Wenowatwedoo, a leader in your industry, is using independent consultants for their needs for marketing excellence. You immediately think you should do the same. But what you don’t know is that Wenowatwedoo has a dedicated team in charge of Marketing Excellence made of former consultants. So for that specific needs, they merely need arms and legs to complement their team, where your company would need the whole team of marketing excellence. Excellent best practice, but not for you.
Cherry picking on what consulting other companies have used might be the most difficult exercise as it requires a fit with your context and strategy but there are many other process elements that can garner tremendous value without presenting the same challenge. But on managing confidentiality, scoping projects, sourcing, selecting consultants, negotiating fees, using creative fee structures or measuring consultants’ performance, there are many levers that can help you to professionalize your own practices.
6. Stay current on the latest trends
Your needs for consulting are changing every year to adapt to new strategic context, to new opportunities opened by new technologies, etc. You have to stay current on the latest trend and be connected with academics and thought leaders. This will give you the ability to spots threats and opportunities early on, and anticipate the impact on your field.
Besides, keeping up-to-date with your industry is key for building expert power and earn the trust and respect of the other executives in your company.
Connecting with peers is part of your development as a professional, it will help you in getting better at your job, become the go-to partner for the executives of your company, and provide you with sparring partners to call when you are facing a tough challenge. It will give you the keys to enable deliver quality procurement services for your business, to get more value of your consulting spend and to create more value for your company. On a personal level, you will have the opportunity to develop meaningful relationships with your peers.
So now the question is … what are you waiting for?
Having emerged in the 1930s and grown rapidly since the 1960s, strategy consulting has progressively shifted its focus from defining strategy to executing it. As a result, strategy consulting has become increasingly specialized at the crossroads of function and industry.
Companies, constrained by limited operations budgets (where consulting expenses are allocated), must carefully prioritize and efficiently organize their projects, which may include external consulting services. As they do so, successful companies apply a sound financial management principle: hiring external consultants has to bring more value than leading the project internally.
Use Consulting Strategically
Attention executives: if you are considering outsourcing a project to a consulting firm, (…), we have great news—there’s a new way to view the value of the right consultant.
Considerations when hiring consultants:
Assigning an independent external task force can bring focus, speed, and pressure to the table, which is sometimes enough for the success of a project. Moreover, because the leaders of internal projects are often high-potentials on the leadership fast track they often find it difficult to push boundaries and confront the more established leaders and influencers who hold the key to their careers.
External consultants also offer other advantages. Because they are familiar with the problem they can often solve it more efficiently and at less cost than internal resources. They can also make up for a lack of internal resources and for a lack of flexibility that prevents internal personnel from being diverted from their regular jobs.
Companies may also want to use consultants for larger purposes than the project itself. These could include training of executives on new skills, introducing external change agents, learning best practices in the industry or in a capability, exposing the organization to a fresh perspective, or relying on the stamp of a recognized consulting brand to reassure board members or investors.
But even under those conditions, hiring external consultants is not always the best solution. For example, consulting services that meet your needs may not be available in your industry or your country.
Confidentiality can also act as a restraint on looking for external help who may ask for sensitive operating or other data for purposes of benchmarking your company’s performance
On the other hand, leading an internal project can be tricky. The internal team may be unaware of the latest trends in the industry or capability. They may waste time reinventing already well established improvement methodologies, resulting in longer projects and greater overall costs. Again, the fact that the team members are part of the company can make it difficult to disrupt the established order.
How to crack the make or buy dilemma?
Most companies and their procurement function work to optimize their external spend and their pool of suppliers in order to better support the overall strategy. They have developed methods for answering a variety of difficult questions: What are the key activities that can be outsourced? What does the pool of potential suppliers look like? How mature is the market for suppliers? What providers are appropriate for us? Is it worth it to outsource a particular activity for the long term?
The same questions apply to consulting procurement. Unfortunately, most companies have neither the experience nor the methods for answering them. Yet, today, all leaders throughout an organization, from the head of procurement to senior executives responsible for signing off on major consulting projects, are expected to align their activities with the overall strategy of the enterprise. But when it comes to making decisions about consultants, they fall back on word of mouth, on perceptions of the reputations of various providers, and on the sometimes outsized claims of the consultants themselves. Or they take the line of least resistance and simply hire the consultants they have used in the past, regardless of whether those consultants are the most appropriate for a particular project or for furthering the larger strategy of the company. These leaders have no reliable way to determine whether a particular consultant precisely meets the company’s needs, no way to gauge a consultant’s likely level of performance, and no benchmarks against which to compare providers. And until they avail themselves of an independent, credible means of assessing providers and matching them to their company’s needs, they are likely to lag their competitors who have.
Some companies have responded to what is essentially a ‘make-or-buy’ dilemma by centralizing consulting procurement. The aim is to have a more global vision of consulting efforts, better understanding of the costs, and more powerful levers for negotiating volume discounts and creating synergies across functions and business units. Recognizing that consulting is an accelerator of change, these companies make consulting management the responsibility of the head of strategy or a transformation leader. But they still struggle with a stubborn fact. The increasing need for highly specialized consulting makes it far more difficult for buyers to have experienced the volume of consulting projects that would enable them to develop portfolios of reliable and high-performing consulting providers. By working with companies specialized in this field, those companies will be able to analyze their consulting spend, refresh their make or buy strategy, identify robust suppliers and areas where new blood is needed. In a way they will be able to develop a consulting strategy for their strategy consulting.
Executives often wonder how to approach the decision to hire a consultant who specializes in one aspect of their industry, or a consultant who has proven results in most areas, but who doesn’t have any specific niche experience. After all, the population of consultants has exponentially increased in response to corporate belt-tightening in the area of permanent staffing.
If you’re looking for the right consultant, there are several factors that will help you decide whether a specialist or a generalist is right for your needs. First of those considerations are the pros of both types. But there are also some important decisions you’ll need to make before you start searching.
So, if you’re wondering how to find a consultant who can provide the outcome you’re looking for, here are a few tips
Before you begin your search for the consultant who best fits your needs and your company’s needs, there are two important things you must do:
Be clear about the problem you are trying to solve by hiring a consultant.
The more clearly you understand the problem you’re facing, and the better you can articulate it, the better equipped you’ll be to make the decision between a generalist and a specialist.
Balance your resource allocation.
You want to procure the right consultant to create new solutions—not to create new financial problems. And obviously, correctly identifying the problem helps balance your resource allocation. Misidentifying your problem can be costly: remember that old saying, “We cut it three times and it’s still too short?”
Consultants—whether generalists or specialists—essentially have one strategic function: optimizing your ROI or expanding your customer base. The consultant you select must understand that she is fulfilling that function, and bring to the table the skillset and experience that will address one of those strategic functions.
Which projects are generalists best for? Which projects are specialists right for? Here’s a rundown of the pros and cons of each:
Generalists, broadly speaking, tend to work in smaller, boutique consulting firms, but also play strong roles in large, global consulting firms. They may be new to consulting or new to the business world, but not necessarily. Typically they have broad-based knowledge and a willingness to adapt flexibly to an enterprise’s needs. Here are the main characteristics of generalist consultants:
They work well in teams, especially with other generalists, as they tend to have strengths in seeing both the forest and the trees, and the interrelationships between the two. In other words, they can connect the dots between the problem you are trying to solve and how potential solutions may affect the rest of your enterprise.
They tend to be a good fit for broader, larger-scale consulting projects for that reason: their types of experiences lead directly to their ability to connect all the dots and offer the most fitting solution.
Generalists excel at analysis, whether the presented problem is the “real” one to be solved or whether it is masking an underlying issue that needs to be solved first.
On the solutions side, generalists may have experience with a range of types of solutions. They tend not to offer cookie-cutter fixes. Instead, they custom tailor a solution for your enterprise. As a bonus, they may be able to draw upon former experience and apply it to current your problem in a way that is innovative.
Generalists may want to solve by themselves issues that could be better addressed by specialist consultants, and thus lack the right knowledge and/or expertise.
They might prove to be a costly solution if their contribution is limited to managing other consultants on your behalf
To sum up, generalists are effective in teams and ideal at tailoring solutions, especially for management-level issues or larger-scale, complex projects. Note, too, that if you think a longer-term partnership with a consultant is on the horizon, go with a generalist who can always find a specialist when needed.
Specialists typically have chosen to concentrate their efforts and abilities in a more narrow arena such as energy, IT, or finance, or in a particular industry, such as healthcare or pharmaceuticals. Many specialists have jumped from years of employment in their field of expertise to the world of consulting.
Major consulting firms usually have a range of specialists who are highly trained and deeply experienced in their chosen fields, but boutique firms also may specialize in a given industry or knowledge field. Here are some of the key benefits that specialists can bring to the table:
Specialists are passionate about their field or industry. They keep current on new findings and industry news. They understand the competitive pressures within their specialized industry.
They also provide solutions for enterprises. With their high levels of training and experience, specialists may be able to zoom in on and implement solutions quickly, which may conserve resources for the company.
Specialists love to transfer their knowledge, and will immediately be recognized by your teams on a dimension they comprehend.
They can see all problems through their area of expertise. As popularized by Abraham Maslow, “if all you have is a hammer, everything looks like a nail”.
Specialists will bring to you the state of the industry but might reuse at least for statistic purposes some of your data. That is the unsaid rule of the game.
The key to successfully using a specialist is the executive’s ability to correctly identify and articulate the problem that needs a resolution. If the scope of the problem is limited to the rapid advancement of IT changes, for instance, a specialist is the natural place to turn. If the problem at hand is limited to circuit board assembly supply chains, turning to an industry specialist makes great sense in terms of both outcomes and resources.
Ultimately, there is a role for both generalists and specialists in the world of consulting. Each type of consultant successfully helps executives find solutions, given the right situation.
Take heart if you find yourself at a crossroads and need to turn to a consultant. There is great news: a consulting brokerage firm has already done all the heavy lifting of assessing a wide range of high-quality consulting firms globally to fit every type of enterprise, budget, and project. They can be a savior in assisting you to select the right type of consulting firm.
Executives who initially turn to a global consulting brokerage company may find they assistance they need to identify which type of consultant will be most likely to optimize ROI or expand their customer base.
Consulting Quest specializes in identifying consulting solutions that boost your competitive edge. Let us know how we can assist you.
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