E-business spurs an unprecedented demand for consulting services. But before jumping into bed with any advisor, consider these five points:
- How long has the firm been in business? Ninety percent of all consulting firms fail within five years. Though there are certainly exciting new firms to consider, longevity usually enhances credibility.
- Who is the lead consultant or project leader and what is his or her background and experience? Consultants have a reputation for pulling the infamous “bait and switch” on clients; impressive partners with impeccable credentials dazzle clients into signing contracts, then junior consultants show up for the engagement.
- What are the backgrounds of the other consulting team members? Clients should understand that consulting is a leveraged business: Junior team members will do most of the grunt work under the direction of senior partners. And knowing consulting team members builds trust and confidence for both the clients and consultants.
- Can the firm provide a detailed breakdown of fees, including all costs of team members (including clerical) as well as out-of-pocket expenses? Larger firms deal with greater overhead. So they’ll often spread expenses among all their consulting engagements. Clients should have a clear understanding of fees and how they correlate to specific services.
- Does the firm guarantee its work? Most consulting firms will work to the client’s satisfaction, but rarely do firms offer a 100 percent money-back guarantee. During the proposal phase, clients should make sure that consultants specify their deliverable as precisely as possible.
Heard on the street
Groundswell , the new I-builder with enviable press coverage, builds a rather eclectic advisory board. The founding members include: ex-NFL star Ronnie Lott, co-founder and general partner of Champion Ventures; Peggy Taylor, CEO of Venture Builders; Sabrina Horn, founder and president of The Horn Group, a Silicon PR firm; and executive recruiter, Rob Graven. What, no HBS professors?! The Advisory Board will work with Groundswell to collaborate on long-term strategy and vision. More importantly, the board will also focus on wooing top talent.
Inside Consulting is written by Tom Rodenhauser as a free weekly supplement to The Rodenhauser Report. The report informs senior advisors and business executives of consulting trends and best practices. Subscription cost is $295 per year for 10 issues. Copyright 2000, Consulting Information Services, LLC. Reproduction is prohibited. Quotation with attribution is encouraged.