The Corporate Checklist: Four Ways To Ascertain That Your Consultants Are Indeed Adding Value

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1. Cost-effective results


I think a good practice is to be quite focused on the results, and consider their business impact.

Has revenue improved? Has profit improved? What was the impact relative to the cost of using the external service survival?

A lot of managers tend to shy away from this kind of rigorous quantitative follow-up, but in my mind this is really the key. Just like company staff have their KPIs, external parties should have theirs. Too often I see work being done with a brand name consultant, just because the management needs "external support" for things they actually should be doing themselves, and that they should be taking personal responsibility of. The logic seems to be that "if this brand name consultant says this, then surely no one can blame us." Now, this paves the way both for poor decision making as well as lack of responsibility taking within the management. Moreover, it often leads to the consulting company "churning the client," doing a string of expensive consulting engagements that in the end do not truly build the company and thus do not deliver any real value add. While the consulting company may be happy for the money they make, the client certainly does not benefit.

2. Measure progress

Financial metrics and understanding the full cost of the service provide are key, but there are other ways to measure progress.

Can you see weekly and monthly progress in your company? Are the answers really changing way the company works? Are those changes improving the company performance? This is one aspect of the value add.

3. Assess internal improvements

Another important one is how the people working for the company are benefiting.

Are they learning new skills? Are they getting stronger as individuals? Is their skill set getting broader? Are they gaining a broader networke that can be leveraged in future problem solving situations? All these elements are signs of value add.

4. Consider sustainability

As a final thought, I also want to add sustainability into the metrics. Is the relationship with the service provider such that the company develops, without becoming dependent on the service provider? A good relationship, and true value add, also implies that the company can move away from the service provider if it so chooses. While the partnership should drive the company forward, it becomes risky if the company becomes "tied up" with the external party. My personal experience has been that partnerships work best (and last longer), if both parties know and feel that they can move on if the value add is not there. This keeps everyone honest, and makes sure both parties work hard every day for success.