USING MANAGEMENT CONSULTANTS

Management consultants act as service providers in such fields as recruitment, executive search and training. They also provide outside help and guidance to their clients by advising on the introduction of new systems or procedures or by going through processes of analysis and diagnosis in order to produce recommendations or to assist generally in the improvement of organizational performance. Their role is to provide expertise and resources to assist in development and change.

The steps required to select and use consultants effectively are:

1. Define the business need – what added value consultants will provide. 

2. Justify their use in terms of their expertise, objectivity and ability to bring resources to bear that might otherwise be unavailable. If the need has been established in cost/benefit terms, the use of external consultants rather than internal resources has to be justified. 

3. Define clearly the objectives of the exercise in terms of the end-results and deliverables.

4. Invite three or four firms or independent consultants to submit proposals. 

5. Select the preferred consultants on the basis of their proposal and an interview (a ‘beauty contest’) – the criteria should be the degree to which the consultants understand the need, the relevance and acceptability of their proposed deliverables and programme of work, the capacity of the firm and the particular consultants to deliver, whether the consultants will be able to adopt to the culture and management style of the organization, the extent to which they are likely to be acceptable to the people with whom they will work, and the cost (a consideration but, as for service providers, not the ultimate consideration). 

6. Take up references before confirming the appointment. 

7. Agree and sign a contract – this should always be in writing and should set out deliverables, timing and costs, methods of payment and arrangements for termination. 

8. Agree detailed project programme. 9. Monitor the progress of the assignment carefully without unduly interfering in the day-to-day work of the consultants, and evaluate the outcomes.

Legal Implications 

If there is a serious problem, a consultancy assignment can be cancelled if either party has clearly failed to meet the terms of the contract (whether this is a formal contract or simply an exchange of letters). Clients can also sue consultants for professional negligence if they believe that their advice or actions have caused financial or some other form of measurable loss. Professional negligence is, however, not always easy to prove, especially in HR assignments. Consultants can always claim that their advice was perfectly good but that it has been used incorrectly by the client (this may also be difficult to prove). Suing consultants can be a messy business and should only be undertaken when it is felt that they (or their insurers) should pay for their mistakes and thus help to recoup the client’s losses. It should also be remembered that independent consultants and even some small firms might not have taken out professional liability insurance. If that is the case, all the aggrieved client who sues would do is to bankrupt them, which may give the client some satisfaction but could be a somewhat pointless exercise. The latter problem can be overcome if the client selects only consultants who are insured.