Three Golden Questions to Ask Consultants

Posted by Graham Hill on May 20, 2008

7 comments | 7830 reads

I recently swapped my usual consultant's hat for that of Interim Head of CRM for a bank and ran the bank's CRM operations for a year. It was a great reminder to me how practical consultants' (and vendors') proposals need to be if they are to have any hope of ever being implemented. And of creating economic value.

As the Head of CRM, I received many requests by other consultants for 15 minutes (more like an hour) of my time. I would respond with a simple challenge. They could have an hour of my time, if and only if, their presentation would address three questions:

Do they really understand my business? - Do they really understand my business as well as I do, particularly the problems and opportunities that provide me with leverage? If they don't really understand my business, they simply haven't bothered to do their homework. They are there to help themselves, not to help the bank. Who wants to work with lazy, self-centred consultants.
Do they have something unique to offer? - Do they have something unique to offer that could make a real difference to my business. I know what all the other consultants can do. I am a consultant! Unless they have something unique to offer that others don't and that isn't being offered to all my competitors, then I can get their services from my current consultants. Who wants to work with 'me-too' consultants?
Can they show how they can deliver value quickly, simply and at low cost? - Do they really know how to make their suggestions deliver economic value? I don't want to invest in anything unless it will create economic value quickly, simply and for as little money as possible. Even the most strategic of programmes can be broken down into a series of aggressive 100-day projects. If a consultant can't show exactly how they will do that, they are selling a dream rather than a guaranteed outcome. Who wants to work with dreamy consultants?

For every 100 consultants who contacted me, only ten responded with the promise that they would answer my three questions. The rest just didn't come back to me. And only two or three of these really did have answers for all three questions. These are the consultants that were eventually hired to build the bank's future CRM business. Sometimes they even replaced long-term consultants who had become complacent and had stopped having new idaes to improve the bank's business.

All consultants are not created equal. The more you ask of your consultants and vendors, the better the responses you get from them. That includes existing consultants too.

What do you think? Should you challenge consultants to prove themselves up-front? Or should you go with the consultants you always use?

Post a comment and get the conversation going.

Graham Hill
Independent CRM Consultant
Interim CRM Manager

Graham Hill

I work in innovation, service design, value co-creation and private equity with DesignThinkers, Optima Partners, Loyalty Factory, and Nyras Capital
If you have a question, feel free to tweet me @grahamhill
[Blog: Customer Insider]

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7 comments »

Andrew Rudin

May 20, 2008

Can you understand my business?

Graham: you've offered a great set of questions that get to the core issues. One question that might work better in place of #1 is "[i]Can[/i] you understand my business?" instead of "[i]Do[/i] you understand my business?"

Of course, we all want to be understood. Sometimes the consultants who bring the most value are the ones who have the capacity and the means to understand something that's not familiar to them. After all, for most of us in marketing, that's a killer skill since often our job is to sell to people who don't necessarily know anything about us. Who better to engage on a project than someone who must walk in those very shoes?

Those who purport to understand a business sometimes bring the myopia that goes along with it.

Graham Hill

May 20, 2008

Rumsfeld's Paradox

Andrew

I don't think your suggestion goes anywhere near far enough.

Business is not fundamentally difficult and most structural information is freely available in the public domain or from having worked in the business. Myopia is not something I have generally found to be a problem in consultants.

I don't want a consultant who 'could' understand my business, I want one who 'does' know my business. One with the foresight to get to know it in detail, in particular the issues driving success in my business, before they contact me. I don't expect them to know details of my marketing spend, but I do expect them to know how I go to market in detail, to show what unique insights they have and how they can help me deliver incremental value quickly. If they aren't committed to winning my business enough to really do their homework, to really understand my business, then I don't want to waste my time with them.

Let's put it this way. If I asked McKinsey or IBM to spend an hour with me, I know that I would learn a great deal of new insights about my business from them. I can't quite afford McKinsey or IBM, but I still want the best. The two or three consultancies who I worked with were the best. Why should I settle for less? Why should anyone?

Graham Hill
Independent CRM Consultant
Interim CRM Manager

Andrew Rudin

May 21, 2008

It depends on whether you want innovation or stability

Although IBM's Lou Gerstner isn't a consultant, the fact that he was hired from outside IBM's core industries (he came from financial services) illustrates my point. Some companies value innovation more than the status quo. Although I wasn't in the board room when the decision to hire Lou Gerstner was made, I assume that the IT experience competing candidates had presented more of a liability than an asset. Why? Because forces often cause businesses to redirect their strategies toward possessing new competencies. The risk of hiring consultants and executives with a strong industry knowledge is receiving the often-ossified thinking that can accompany that experience.

Case in point: a VP/CTO of a Fortune 100 technology company I spoke to recently told me that the more valuable product developers he seeks to hire for his group have a breadth of experience across several industries. He said "I can hire an engineer with 20 years of experience designing printers, but he's going to view problems narrowly. The others will bring in new ideas that are important for innovation."

That experienced engineer could pass the "understands my industry" test with flying colors. For the same reason, if your company requires agility and innovation to survive, I'm not sure the 20-year industry veteran could take you where you need to go. The same is true for consultants possessing strong "industry knowledge." Unless my overarching need is for something tried-and-true, I value a person who can bring a fresh perspective from the outside and apply it to my business.

Graham Hill

May 21, 2008

Understanding Not Experience

Andrew

I think we a talking at crossed-purposes. The point of the 'Do you understand my business' question is to help select 'management' consultants who have gone to the bother to try and understand my business from as many angles as possible (the word 'homework' was the key one in the question), rather than the more typical 'sales' consultants who just want to sell me whatever mousetrap they happen to have in their bag. Like lawyers, we have far too many sales-consultants.

IBM hiring Lou Gerstner to do a turnaround or a Fortune 100 technology company hiring a product developer to, well, develop a product, are clearly not comparable situations.

What is more troubling is your apparent suggestion that experienced hands are incapable of innovation ("if your company requires agility and innovation to survive, I'm not sure the 20-year industry veteran could take you where you need to go"). That is certainly not the case in my experience across different product and service industries. Experienced hands can be enormously powerful in driving forward innovation in truly innovative organisations.

Graham Hill
Independent CRM Consultant
Interim CRM Manager

360view4u

May 29, 2008

Three Golden Questions to Ask Consultants

I've been in this industry from the last 8 years and realistically as consultant you cant offer anything unique - what can you do is collect the facts and the best practices to help management to decide about the future strategy .

Graham Hill

May 30, 2008

Innovate, Innovate, Innovate

I am not sure that I agree that there isn't anything 'unique'. In a Gaussian world of professional services, most consultants make their money by helping clients implement what has become common-practice. Their competitors are implementing, e.g. marketing resource management (MRM), and they don't want to be left behind. Or perhaps they want to gain a headstart over their competitors so they lead by implementing best-practice MRM themselves.

But some clients want more than common-practice, or even best-practice. They want help in innovating, in doing something unique in their industry, so that they can develop a temporary competitive advantage.

I have worked at the leading edge of CRM thinking for over 20 years. That meant pushing the envelope with CEM almost 10 years ago, long before it became popular. And the same with social marketing five years ago. And customer co-creation three years ago. And multi-side markets two years ago. And customer peer-production today. All of these things will likely become common practice over the next three to five years.

The vast majority of consultants are not talking about these things much, if at all today. Helping clients to engage with customers through providing platform that support multi-sided markets, like Amazon or Zopa does, or peer-production, like Linux or Lego does, is still pretty unusual, if not actually unique.

This is what I meant by having something unique to offer. It really does exist. Even in consulting.

Graham Hill
Independent CRM Consultant
Interim CRM Manager

Pri

June 12, 2008

Unique service

Graham, can we show how to the our customer that we have something unique to ofter to them? And that service it isn't cheap but has a high ROI?

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