On Hiring a Consultant

03 Apr On Hiring a Consultant

By David Allen, Development for Conservation

Thinking about hiring a consultant?   (Thinking about hiring me?)

I’ve been consulting now since 2004 and full-time since 2009. In that time, I have responded to several hundred requests for proposals, and I have formed some specific opinions about how the process should and should not work. It’s probably time that I wrote a blog about that.

There are at least two great reasons to hire a consultant – 1) they have expertise you can use and 2) they are objective. The expertise is easier to see when it involves knowledge of the law or accounting or sustainable forestry. It’s a little harder to see when it involves expertise in strategic planning, fundraising, or conflict resolution. But in each case, bringing in someone who knows how to do something (and has done it dozens of times) can help streamline the process, bring creativity to trouble spots, and deliver the your desired outcomes.

The objectivity means they are far enough removed to be neutral on the issues. They don’t have a dog in the show. We all get close enough to our work that we lose objectivity. Objectivity is more important for some things than others, and it will come for most as a judgment call, asking could we do this ourselves and save the money?

Regardless, once you decide that hiring a consultant is desirable, there are some things you should keep in mind. Here are eight tips:

Have an RFP. Use an RFP. A Request for Proposals (RFP) describes what you want done and the format in which you want information from the consultant. Using an RFP means that you will get information back from your candidates that is comparable in content and length, so you can make a decision. Distribute the Request for Proposals to at least three competitive consultants. This is not like choosing between apples or renting a car. The consultants you talk to may be wildly different, and you won’t know that until you actually interact with them.

Not every job requires an RFP, of course. Sometimes, the job is fairly straightforward, the consultant is someone you know and feel comfortable with, and the cost risk is low. Fine – consultants like it when they are hired without a bidding process.

But also consider this: Many experts recommend that you put financial auditing work out for bid every 5 to 7 years. First, because the world changes, and second, because of that objectivity thing. Familiarity may not yield contempt with consultants, but it can lead to an erosion of objectivity. And the higher the cost, the more important getting multiple bids will be. The RFP is the tool to get you there.

Describe the desired outcomes, not the process. In the RFP, describe what you want the results or outcomes to be. Allow the consultants to propose the way to get there that they could offer. If the RFP is too restrictive regarding process, you will not be taking full advantage of their expertise. I have directly responded to some RFP’s, and then said, “But I wouldn’t do it that way, and here’s why.”

Give consultants as much information as possible, including the budget. If you are constrained in terms of time or budget, tell your candidates that. It will save everyone time and “face.” It is certainly true that many consultants will “magically” propose a process that adds exactly to your budget, but isn’t that why you have a budget in the first place?

Specificity DOES change the nature of the request. Instead of saying, “This is where I’m going. Tell me how you would help me get there and how much that would cost.” You are saying, “This is how much I have. Tell me how far you can take me under those constraints.” It changes the deal, but it will help both you and your candidates get to a satisfactory proposal.

Understand that the final cost is negotiable. If you otherwise like the consultant, ask if you can work with them on the price. There are almost always variables built into the proposals. Ask the consultant to help you understand what those variables might be and how reducing them might affect the final outcome or product. For example, in strategic planning, the variables might include the number of interviews or who actually drafts the plan.

Having said that, you should also be respectful of the consultants’ time and professionalism. Understand (ask) how the consultants calculate their fees. I base my fee estimates on the number of days or half-days I think the job will take. Others charge by the hour. Some charge by the job. Some charge different amounts based on how the work is spread within their firm. Some add administrative and travel allowances.

In each case, consultants might reduce what they do for you to save you money, but they shouldn’t arbitrarily reduce their daily or hourly fee, and it would be unfair to ask them to do that.

Conduct interviews. Just like hiring an employee, you should ask a simple set of questions of each consultant you are considering for the work. Especially for larger jobs, you will want to have a certain level of comfort and trust with the consultant – and you will want them to “fit in” culturally with the organization. In an ideal sense, these interviews would be conducted in person, but more and more, organizations are using video-conferencing to conduct the interviews.

Ask who will be actually working on the project. A large part of your comfort level working with a consultant will relate to the actual person doing the work. You should ask up front who that will be and include that person in the interviews.

Ask for and call references. This seems obvious, but it may not be. Consultants and employees are the same in that they will primarily give you names of clients who will gush about their services. So first of all, expect that. If you don’t get it, it tells you something. But I also suggest randomly selecting a client or two that they did NOT give you. Call that person and ask about their experience with the consultant. In each case, ask what the clients wanted and what they got. And ask whether they would hire that consultant again.

If you’re not learning, you’re not getting full value. Part of the reason to hire a consultant is that they have expertise you don’t. Use that fact to learn. You won’t be able to increase your level of objectivity, but you may be able to do more next time because you now know how.

Can you add to this list?

Cheers, and Have a great week!

-da

Photo by Todd Cravens courtesy of Stocksnap.io.