NOTE: This article originally appeared
in the October 2008 issue of Flawless Compliance, under the "Hello
Rubber, Meet the Road" section. The link to the actual issue is
at the bottom of this article.
How do you find a good consultant in bad times?
September 2008 showed the steepest US payroll cuts in over 5.5 years,
according to a recent Reuter’s
Report:
“U.S. employers cut payrolls at the steepest rate
in 5-1/2 years in September, slashing an unexpectedly large 159,000
jobs as employment contracted for a ninth straight month, suggesting
the economy may be in recession.”
This is alarming, but anybody who lived in the Silicon Valley during
the late 1990s knows a little something about downsizing. Times like
this put companies in very challenging positions. Seeing your human
resources leave in mass quantity is a scary situation. Your productivity
will sink, and there’s a good possibility that you will permanently
lose precious intellectual property. The people who remain will be forced
to pick up the slack, and their morale will be very low because of it.
The answer for most companies is to turn to consultants for help, and
of course it makes a lot of sense. Consultants are a very good option
for maintaining business continuity during difficult times. Your situation
is temporary, and so is their engagement. Once you get back on your
feet, you and your consultant can part ways amicably.
As nice as this sounds, it can also be a disastrous time to hire a
consultant. Consultants can be two to three times more expensive than
employees (or more). If you make a move with the wrong consultant, it
could cost you a fortune before you figure out it’s not a good
match. To add, you’re back to square one, and you’ve lost
a lot of precious time.
I’ve been a consultant now for about 20 years, and I’ve
had the great privilege to work with some great companies. Throughout
my engagements, I’ve been asked on several occasions to hire other
consultants to help staff a project, and I’m going to be perfectly
honest with you. Most consultants over-promise and under-deliver –
and it starts with their resume. I’ve had supposed Oracle “experts”
get stuck on simple questions like, “How do you log into Oracle?”
This is no joke.
So how do you make sure you get the most out of your consultants? Let
me share with you my key tips for finding and engaging a consultant.
Tip #1: Make Sure to Hire a Consultant, and Not and Employee
in Transition
Hiring a consultant and hiring an employee are two completely different
things. That’s why I never understood “contract to hire”
offerings. You have to be clear on what you want, because the two
think and act very differently. A consultant is an entrepreneur with
a high degree of skill and professionalism. They are independent and
responsible – perfect for assigning jobs where you’re
only concerned about the outcome.
Employee minded people are task oriented, and will need to be managed.
Their skills won’t be as well-rounded, and they won’t
have as much perspective because they’re accustomed to learning
only their job at their company.
Determining the difference is easy. Employees in disguise will have
been employed somewhere for most of their career, possibly with some
short breaks between jobs as a consultant. There’s nothing wrong
with a long employment career followed by a consulting career, as
long as the break is clean and it’s clear that a purposeful
transition was made. You can also ask the potential consultant directly,
“How would you feel about working here as a permanent employee?”
I real consultant will respectfully decline. It’s just not what
they want.
Tip # 2: Concentrate on Results, Not Resumes
Forget about resumes, they’re a waste of time. Even if they’re
accurate (which is not likely), they are largely irrelevant. What
you really want to know, is if they can help your situation. If they’ve
been able to attain tangible results with other people like you, they
can probably help you as well. Be diligent about checking their references
and testimonials. You should objectively validate both the results
that they’re claiming and other soft skills, like their work
ethic and the personality.
Also, don’t be concerned if they don’t have specific
experience with your tools or processes. Real consultants are professional
problem solvers, and quick studies. The clients that have the best
results from me are the ones who trusted me to work on subject areas
I’ve never worked on before. I’ve also had clients insist
that I know a certain skill only to find that when I looked at their
problem, my experience had no contribution at all to their situation
because configurations were different.
Tip # 3: Limit your Risk with a Fixed Bid Project
This comes from project management 101, as any Project Management
Professional (PMP) will tell you. There are basically two different
ways to engage a consultant; fixed bid or time and materials. For
some reason, it has become a convention to pay consultants on a time
and materials basis. Of the two, time and materials is the riskiest
way to engage. Personally I think it’s unethical to charge by
the hour, and puts you and the consultant at opposing interests (the
consultant is incentivized by working slow).
To control costs, it’s much better to construct a fixed-bid
arrangement with your consultant. And don’t get caught up on
cost – cheap consultants are a waste of time and money. Instead,
view your consulting engagement as an investment, and focus on your
return on investment (ROI). Understand clearly, in both quantitative
and qualitative terms, what value you will extract by having the consultant
engaged, and make sure you get a good return on your money.
Using a consultant is a smart move in turbulent times, but if you’re
not careful, the chances are it will backfire on you. Be intelligent
in your engagements by making sure to hire a true consultant. Also,
focus on results and avoid paying your contractor by the hour. Keep
these tips in mind for your next consulting arrangement, and you’ll
probably come out ahead.
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