Don’t DIY: Expert Advice on When Small Businesses Should Ask for Help
March 25, 2016
Maximize your ROI with advice from top consultants on how a small business can make the most of a consulting budget.
Small businesses face an array of challenges that stress their budgetary constraints. Although consultants can offer many benefits, small businesses often hesitate to hire them because they’re not sure when to call for help—and how to optimize their return on investment when they do. To gain deeper insight into the issue, we reached out to some of Consulting magazine’s Top 25 Consultants and asked, “For small businesses with limited funds, when should you prioritize bringing in a consultant?” They stepped up to the plate and gave us some great small-business advice about when consultants can do the best work and how companies can make the most of it. Most of what we heard fell into 3 categories; if you want to make the most out of your consultant you have to know what you need, who you need and if you’re ready. Here’s some advice on how to find the answers to those questions from those who excel in the industry.
Know What You Need
Several of our respondents emphasized the importance of understanding your company’s needs prior to bringing in a consultant. Carol Beaumier, Executive Vice President of Global Strategic Planning at Protiviti, says those needs typically fall into two categories: capacity and expertise. “In the first instance, the company knows what needs to be done and how to do it, but simply does not have enough internal resources to accomplish it. In the second instance, the company does not have the expertise in house to solve a problem.”
CAROL BEAUMIER Proviti
“Companies typically hire consultants for one of two reasons: they have a capacity issue or they need expertise… For companies of any size, there can be merit in using consultants in either of these circumstances.”
Kevin Christ, Senior Director at Alvarez & Marsal, agrees and says hiring consultants to fill a temporary need can be a good idea. “You must also ask yourself whether the value of the consultant exceeds the cost. Is the ROI positive?”
KEVIN CHRIST Alvarez & Marsal
“Consider consultants when the needed expertise or capacity is not permanent, or as interim leaders when assistance is required more urgently than can be hired.”
In addition to the need for unique expertise, Steve Chase, Partner and U.S. Management Consulting Leader at KPMG, says that companies should also consider bringing in a consulting firm when they need to solve complex problems and accomplish their objectives quickly—aligning prioritized needs with budgetary constraints. “Consultants are adept at identifying and solving large, complex problems and then mapping out a solution and process to address or solve the problem,” he says. “Consultants can deploy teams of people in a timely manner to help a business develop an execution plan that accomplishes its objectives efficiently and effectively.”
STEVE CHASE KPMG
“Availability of funds is always an issue, so companies need to prioritize which skills to bring in and where to deploy them. It is always a cost/benefit analysis the company needs to look at before allocating the funds.”
Ellen Hives, Partner at Ernst & Young, says that prior to bringing in a consultant, having clear communication and well-defined objectives is essential. She notes the importance of being clear in the problem you’re trying to solve, being prepared with all related details prior to the first meeting, and identifying the key players who need to be involved.
ELLEN HIVES EY
“It’s important to make sure everyone is clear on what you as a leader are trying to accomplish. If the team on the field is not clear on where you’re trying to go, you won’t get there.”
Know Who You Need
After you’ve determined the “what,” it’s essential to determine the “who” in terms of both the type of firm and individual consultants your company needs. Mark Finlan, Director at Censeo Consulting Group, says that maximizing efficiency and expertise is key. “I often tell my clients that I probably don’t understand their business or potentially even their industry as well as they do, but I have supported dozens of organization-wide transformations and strategic planning projects in the last 10 years, and that diversification and depth of experience is where I can be helpful.”
MARK FINLAN Censeo Consulting Group
“To me, hiring consultants is not much different than why I hire someone to help me fix my car or do construction on my house – because they do that all day every day, and they are likely better and more efficient at it than I am.”
Thomas Mataconis, Senior Vice President at NTT DATA Consulting, Inc., agrees with the importance of being specific about your needs and ensuring that you’re getting the right expertise. “You can get a lot of insight out of someone that’s been in the industry or area that you’re looking to address, but have they addressed the area you’re specifically looking to solve?”
THOMAS MATACONIS NTT DATA Consulting, Inc.
“Prior to the contract being signed however, make sure the challenge or problem is well defined and the consultant you chose has deep experience in addressing that area for your type of company and for your culture.”
Scott McIntyre, U.S. Public Sector Managing Partner at PricewaterhouseCoopers, also says that aligning company needs with what a consultant can offer is essential. “Specifically, when a consultant can help solve a problem or deliver a solution faster and more economically than can be done in house, they should be considered.”
SCOTT MCINTYRE PwC
“The real trick is qualifying a consultant and gaining an understanding of how their expertise, experience and methods translate into a more efficient approach for the company.”
In addition, Alex Qatsha, General Manager at Slalom Consulting, says that expertise in a specific discipline may be needed. “First determine whether the need is tactical or strategic in nature. Meaning, if the business needs project management or business analysis or technical expertise it can, with a little work, find excellent independent contractors who will be more price competitive.”
ALEX QATSHA Slalom Consulting
“If the business problem is more nebulous, for example, “how do I decrease customer churn?” then there is a good business case to bring in a consultant specializing in that discipline.”
Mary Tinebra, Senior Partner and U.S. East Market Leader at Mercer, also emphasizes the need to find the right person and firm, especially since employers have a lot of rules to follow. “There’s a lot of regulation behind some of the issues you might face as an employer, even with a smaller business, such as compensation and health care, or retirement and employee engagement.”
MARY TINEBRA Mercer
“Find someone that you can trust, with the right expertise. Consulting advice doesn’t have to cost a lot, but it could cost you if you don’t get the right advice.”
In addition to finding the right fit in terms of expertise and trust, Stefan Larsson, Senior Partner and Managing Director at The Boston Consulting Group, notes that solving problems and then making your company independent should be the goal.
STEFAN LARSSON BCG
“Make sure you buy services from someone keen on enabling you to learn and develop as an organization and not someone who may rather make you dependent on their future services.”
Additionally, he emphasizes the need for commitment and passion from the consultant. “Ultimately you buy time from someone who will get very close to your team—therefore they should be as committed and passionate about what you do as the best of your own people,” Larsson says.
Tom Hulsebosch, Managing Director at West Monroe Partners, agrees with the need to achieve independence by creating sustainable results. “For a smaller company I would recommend that they choose a consulting firm that will help them not only facilitate the strategy creation, but also lay out the roadmap to execute the strategy.”
TOM HULSEBOSCH West Monroe Partners
“The smaller the business, the more important it is that the business is involved with implementing the strategic plan to insure that they can sustain the results when the consultants go home.”
Know If You’re Ready
Unfortunately, companies often spend a great deal of time, money, and effort bringing in consultants when they’re not ready to fully engage and commit to the changes that may be necessary for progress to occur. Steve King, Practice Director at Point B, says it’s key to embrace the big picture to assess your readiness. “It’s critical, especially in a business with constrained resources, to realize that a consultant’s recommendations will require time, resources, and often additional funding to implement and drive results to the bottom line.”
STEVE KING Point B
“Thinking through the likely next steps and related investment before engaging a consultant can save time, money, and frustration, and ensure maximum value is derived from limited investment dollars.”
Gregg Schoppman, Principal at FMI Consulting, says that getting everyone on board can be difficult at times. “The biggest challenge is always ensuring the buy-in—no consultant is a miracle worker and it takes the client and the consultant, with 100 percent dedication to achieve results.”
GREGG SCHOPPMAN FMI Consulting
“Sometimes there is the view that ‘Uh-oh, the business is going bad, let’s call the doctor.’… In some cases, our best engagements are not when there is an issue or deep rooted problem but when the business is FULLY committed to making positive and meaningful change.”
Nathan Brewer, Vice President at Sapient, says that an outside perspective can be quite valuable, if you’re ready to make the most of it. “Most importantly, overall a small business should only bring in a consultant when it is ready to listen and take action.”
NATHAN BREWER Sapient
“Growing small businesses tend to be hyper-focused… In this environment, perspective on the business as a whole can be hard to find. This is where a consultant’s point of view can be invaluable.”
Brewer emphasizes that good consulting is a two-way street: “Too many businesses of all sizes hire consultants with hopes their involvement will immediately solve a difficult challenge. Sadly, this is not the case. Good consulting is a partnership between the business and the consultant. ”
Before hiring a consultant, it is important for businesses of any size to prepare. Consulting is a two-way street that relies not just on the expertise of the consultant, but also on the experience of the business. Before calling in help, make sure you’re prepared to dive in. Making the most of your investment requires your full commitment to the task at hand.