Ten Questions every CEO should Ask when Hiring an External Consultant

Consultant Value – As a CEO, hiring an external consultant is a serious and necessary resourcing step, focused on desired company value and results. For you it is critical to assure success, when introducing an outside consultant to the organization. The below listed questions and observations may serve as guidance in the process.

1. What do I want to gain as a result of this consulting relationship?

Hiring a consultant must be driven by a need, a want, or a wish for better business results and must be based upon consultant value objectives you would like to accomplish. Your only justification for the financial investment will be the return on investment (ROI) through value creation for the corporation. You want to positively affect the business results through the consulting and secure its desired value. In other words, be clear on the personal and or business value you want to get out of the collaboration.

2. Do I agree on the objectives?

From experience I have seen consulting projects fail, not necessarily through ‘inadequate consulting’, but through lack of communication and substandard pre-project collaboration by the consultant with the client. This, followed by a near prescriptive solution, methodology implementation by the consultant, based upon its own independent analysis.

It is critical to collaborate with the consultant on the project definition and to require a conceptual agreement with your contribution early on in the process. This agreement needs to detail the objectives, a clear definition of the business value you would like to create and measures to evaluate progress. This is clearly not an agenda with a list of tasks to be completed.

This conceptual agreement is the basis of your project and is the main feature of your consulting agreement.

3. Do I know who the consultant will be on my project?

You are looking for lean consultancy – yet you require sufficient resources on the project to obtain the required consultant value. Has the consultancy company proposed a named consultant, will subcontractors be involved, or can just any one be allocated? The key to success will be for you and the consultant to work with your team, not necessarily on independently implementing a methodology, but by developing innovative and improved ways for you and the team to succeed. Require the consultant, the expert, to do the work and avoid subcontractors where possible. Remember, the consultant will temporarily operate within your organization and be part of your team. As a team and with your personal involvement, you will make the collaboration work and the project a success.

4. What is the type of consultant I hire?

At a senior level, it is critical to your project’s success to secure a named, senior and well versed business expert consultant. Someone with actual business, managerial and team leadership experience, not just a a consultant with ‘consulting experience’ in a certain industry segment. An experienced business leader will quickly gain trust with the team, has the right ‘learning attitude’ and is well equipped with business experience through past business and leadership successes.

5. Can I collaborate with this consultant?

You know your company strategy and your environment best. However, an external consultant who agrees with you on everything is probably the last thing you need at this time. A consultant will add consultant value by thoroughly evaluating your product and organization.

You require innovative and authoritative contribution, perhaps most importantly contrarian thinking. This ‘unbiased’ contribution is one of the main reasons for you to hire an external consultant. Your personal commitment behind the project is key. This commitment is ‘visible’ every where in the organization and is a major part of helping the consultant and thereby the project succeed.

Collaboration is key in this relationship and an intensive intervention need to be well directed and preferably short. This is about creating favorable and improved conditions for you and the team. This is not about the consultant.

6. Does the consultant act in a confidential manner?

You seek a consultant who is a communicator, a valuable resource, a team player, not someone who will go out on its own, implement his or her solutions and in doing so creating havoc in the leadership team and the rest of the organization. Occasionally, the consultant may bring up unexpected issues and might be disagreeing with you. This may include observations of wasteful spending and any form of waste, staff has become habituated to. It is critical that the consultant has addressed how these observations and disagreements will be communicated to you personally.

7. Do I feel I know enough about the character and capabilities of the consultant?

Past performance is a critical indicator of future performance and consultant value. Your personal chemistry aside, the past performance has to be confirmed by people other than the consultant. You want a consultant who delivers results and outcomes, one who is professional, who is walking the walk and one who will be ethical in all its activities. This is another reason to hire a named consultant.

8. Is the consultant focused on my desired outcome and value?

You are rightly curious about how quickly the consulting value will get positive traction in your organization. You need some “quick hits” and “quick fixes” to

gain momentum and show your team that value is being created. You require these “quick hits” and “quick fixes” to be building blocks leading to growth. However, will these be considered as such by you and your team?

Also, you have probably experience with Subject Matter Experts (SMEs), who have proposed changes to processes, procedures and perhaps even some changes to the organizational structure. However, if you review the work in fairness, you will notice that the changes and improvements are nearly always incremental. People who are entrenched in the daily activities may not ‘see’ things the way they are and what they potentially could become. Also, frequently SMEs will choose to avoid upsetting their superior and or the colleagues and team members. This behavior holds especially true when the SME has been involved and or has been at the origin of some of the very things that need to be transformed. Therefore, most frequently SMEs marginalize a potential for transformation and deliver incremental change at most. You require a consultant without any of this organizational ‘baggage’, delivering the greatest value possible.

9. Does the consultant guarantee its work?

In collaborating with the consultant, the project may potentially have minor iterations, nonetheless, you require someone who will guarantee the work they do. A well versed business expert and past leader who has codeveloped the project with you, will be happy to guarantee its work. After all a consultant who guarantees its work, walks the walk of their own delivery and consultant value. They have everything at stake and in working together, so do you. One more reason to require a named and well versed business expert consultant.

10. What is the consultant’s fee structure?

You want to secure business value through desired results and outcomes, all within a controllable budget. Recently quite a few negative stories have emerged in the press about consultancy projects which went ‘out of control’ and amounted to excessive cost with no seeming value to the client. My suggestion to you is to avoid the ethical and fiscal management challenge of managing hourly billing and search for a consultant who works fixed price. This way, the consultant’s approach is driven by the business value and desired results you both have agreed upon. The consultant will deliver the results in the shortest timeframe possible, so you can start benefitting from the value immediately.

Conclusion

Hiring an external consultant can be a very rewarding and valuable experience. In collaborating, the consultant can become an excellent resource and business partner, creating value through partnership. A collaboration with immediate and future payback. It is up to you to make it work.

This article was originally published in Leadership Matters on 30 October, 2009.