“The value of an idea lies in the use of it.” – Thomas A. Edison
As an executive, you are continually searching for ways to add value to your product. You are curious about new ways to improve your processes, your productivity, and your revenue to name a few of your concerns. Facing a growing demand, the services industry continues to specialize and segment to be able to fulfill the various needs of its clients. Yet many companies struggle without consultants. So what is the value created by consultants that some clients see, but others are oblivious to?
Too many companies are thinking about consulting as additional resources or through the lens of the project they are working on. Very few executives have indeed a clear view of the value they provide. Indeed, the added value brought by consultants can be classified into two categories: Technical and Political. Most projects will have benefits for both families.
When you decide to work with a Consultant, one of the main goals is to generate the most value. But measuring value can be a tricky task.
So let’s talk about the value consultants bring to their clients :
1. Why work with a Consultant?
In today’s dynamic and uncertain market conditions, your business should strive to get every competitive edge, increase revenues and sales, position the brand to stand out even more among the competition. Finding and selecting the best Consultant suited to your specific needs is half the battle in the successful completion of your project. The biggest benefit Consultants can provide to your company is temporary expertise, on a per-project basis usually, so there is no further obligation to you, as Client, unless you like to use their services on a repeat basis. The bulk of the consulting providers are very small boutiques with less than 10 employees. In the US, for example, they represent 87% of all Consulting firms. The remaining 13% of Consulting firms with over 10 employees, however, generate more than 90% of the total revenues in the industry.
2. The benefits of working with Consultants:
There are plenty of benefits and solid reasons you might like to hire a Consultant for your next project. Here are the most common ones.
- Lower cost when hired only per-project basis compared to a full-time employee
- Contract work can be extended as needed
- High level of expertise and professional experience
- Objective and independent perspective on the issues
- Easy to terminate the services when no further needed
3. What value do Consultants bring to clients?
The diversity of the Consulting providers in terms of size, and offerings is quite complex, and this makes buying Consulting services so tricky. However, we can identify and agree there are two dimensions of value created. Most consulting projects will create value along these two dimensions:
- Technical Value
The technical value is brought through in-depth expertise. Most operational projects fall in this category, whether the consultants provide outside knowledge, help diagnose a problem and its solution or assist in the implementation of the said solutions.
- Political Value
The political value is more difficult to appreciate. But anyone that has been around for a bit knows the importance of company politics. In troubled times, Executives can look for support to legitimate a decision, enforce unpopular changes or be the scapegoat. It can also take the shape of facilitating the convergence between the stakeholders or acting as a sounding board. The bigger question is –
- How to measure this value?
All projects should bring value to your company. But how do you measure this value? When a service is intangible like consulting, you cannot physically measure the results. The technical value is usually easier to measure since it often comes with tangible results such as cost reduction or income increase. The political value, however, is more complicated. How do you appreciate the impact of a culture and diversity project or process and system optimization? Other fields have succeeded in measuring the intangible such as client satisfaction or employee performance. There is to date, no standard in measuring the value created through Consulting. It sounds particularly ironic when we know that Consulting stemmed from the need precisely to measure performance.
4. Value Perception & Client Retention
In a recently published Forbes Insight Study on the topic of “What Value Do Consultants Bring to Clients?” the results were pretty impressive. According to it, 92% of executives reported projects’ success; 62% agreed that the benefits of the project correspond to the desired outcome; and also, 30% of clients stated that the benefits exceeded their expectations. But despite these favorable statistics, seemingly illustrating the success rate of Consulting, only half of the 92% who indicated the Consulting projects were successfully rehired the same Consultants on a new project. This brings us to another important aspect of value created, the Value perception. If clients are overall satisfied working with a particular Consultancy, why would they take their business elsewhere?
Consulting is very much a people’s business, and building and maintaining relationships is a big part of its success. Attracting new clients and retaining old ones is never an easy task. It is hard to generalize all relationships, but from the survey mentioned above, it becomes clear that Consultants need to put more effort into optimizing available opportunities with old clients and try to engage new ones holistically. Long-term business success requires wise strategizing but is more rewarding to both Clients and Consultants than random one-time projects.