When you start a project, you must select the appropriate consulting firm. A first glance, a global project is calling for a global consultancy. But is it always true?
On this week’s Smart consulting Sourcing podcast, I discuss whether you always need worldwide consultants for global projects.
Key Takeaway: If you need consulting services, determining how to find consultants can be a complicated task. Selecting which consultants to work with based on their quality, approach, responsiveness, and costs is not always easy. In addition, consultants’ geographical location or cultural fit could push your final decision one way or another. Before the hiring process starts, you can find the perfect consultant for your project by doing thorough research.
Hello and welcome to episode 63 of our podcast: Smart Consulting Sourcing, THE podcast about Consulting Procurement.
My name is Hélène, and I’ll be your host today.
Each week I’ll give you the keys to better use, manage and source consulting services.
In this week’s episode, I’ll discuss whether you always need worldwide consultants for global projects.
Last week, I covered how to assess the quality of a consultant.
We learned that assessing the performance of your consulting projects may provide the keys to improving the return on your investment and satisfying internal customers. Consultants will frequently argue that consulting is intangible, making it impossible to measure. It is merely a ruse to prevent change from occurring. Other domains have established effective evaluation processes for intangible outcomes.
This week, I wanted to tackle a thorny issue. When you start a project, you must select the appropriate consulting firm. If you listened to my previous episode, “How to Identify the Right Consultants,” you know that several criteria may be used to describe consultants, such as skills, industry expertise, delivery model, and so on.
One of the markers is the footprint of the consulting firm. A first glance, a global project is calling for a global consultancy. But is it always true?
I’ll make my point.
Let’s start with an anecdote.
A few years ago, I was working with a French consulting firm specialized in strategy & operations. We were working on a project to improve their client’s productivity, an industrial client with factories in Europe (mainly France and Germany) and the United States. We decided to audit one of the factories because it was having trouble performing. The decision was made to dispatch a German professional. The outcome was devastating. The customer was furious, and the project had to be terminated halfway through.
What happened exactly?
There wasn’t a cultural fit beyond the loss in translation. Every country has its managerial culture, business etiquette, communication preferences, etc. However, when executives in most global companies are exposed to cultural differences, this is not the case for employees on the factory floor.
When you work on a productivity project that often rhymes with reorganization and lay-offs, you know you will sometimes face a hostile crowd at some point. Therefore, you cannot afford to create communication problems that could easily be avoided.
But it’s easy to point the finger at only one party. The consulting firm did choose the wrong consultant for the task. But it was a small boutique with somewhat limited bandwidth. Nevertheless, they did their best to staff the project with the best experts at their disposal.
However, the client made far more severe blunders.
Working on a global project with a tiny boutique without checking the availability of the right experts in advance.
And leaving carte blanche to the project leader to staff the team without assessing the culture fit beforehand.
They might hide behind their lack of knowledge of consulting and the subject matter at hand, but this is just a deflection of responsibility. But let’s go back to outsourcing 101: the client needs to understand the elements they outsource, keep control and measure the performance…
I see you rolling your eyes. Yes, I am back to my pet peeve… But actually, let’s focus on the first part of the statement: “understand the elements they outsource”… Any outsourcing done without this condition is half done. But more importantly, you expose your business to potential risks.
So let’s go back to the initial question: “Do you always need global consultants for global projects?”
And I will use my older son’s favorite question: “Define global.”
Let me take an example: imagine working on global megatrends for your Home & Personal Care Busines Units. You want to identify the commonalities between the different regions and the particular trends in emerging markets such as China. This project is indeed global. Or is it? Maybe so, maybe no.
Let me explain. It will depend on your organization, the level of collaboration of the consultants with your teams, and the depth of knowledge you are looking for. Besides, are you interested in some bottom-up analysis?
You get it. What matters here is not the scope of the project itself. Think instead about the locations where they need to be physically present, the languages they need to speak, the cultures they need to understand, and where and how they need to communicate with the project leaders.
Let’s look at another example now. A large company based in Europe wants to define new procedures and ways of working for their marketing strategy function. The project will start with defining the targetted systems and then the implementation in the different regions. The company has strategic marketing teams in France, the US, Brazil, and Singapore.
Funny enough, there is no one-fits-all solution. Another of my pet peeves. That underlines the complexity of buying consulting. And also because I love this expression: there is no equivalent in French.
Most clients would look for one single consulting firm for the whole project. It can be relevant if you have little bandwidth or want to keep tight control on the implementation. But this solution comes with a premium. Indeed, global consultancies tend to be more expensive, up to 5 fold, than boutiques.
Besides, many large consulting firms work with regional P&Ls. Which means that they’d instead fly over their consultants rather than cooperate with their local offices. But extra costs can reach 25-30% of your project’s original budget when the consultants come from a great distance. So you can end up with a costly undertaking.
Before deciding on this option, take the time to evaluate the pros and cons, particularly the return on investment.
But there is another route. You could split your project into two phases: definition & implementation. First, work with a specialized consulting firm on the definition, based close to your headquarters, and then implement the initiative with your teams or with several local consultancies.
Of course, this option requires enough people to hire and supervise the different consulting firms and some level of decentralization. But at the end of the day, you might get a better return on investment.
But it can be done. Actually, this project is a real one. My clients decided to hire local consultancies, and the results were entirely satisfactory. They pulled it out of the bag again for an organization project a few years later, hiring a consultancy to handle the implementation process. But this company had a very decentralized culture with business units organized as stand-alone businesses. They were used to making decisions and paying for them, as long as they could justify their decision. So it perfectly fit with this project.
The thing is: the way your company is organized and the culture of your teams will impact your decision.
What do these two anecdotes teach us?
I would say two things:
First, there is no one-fits-all solution to solve your problem.
When you want to launch a project to solve an issue, you can start by evaluating the opportunity to use internal resources (or perform a make-or-buy analysis if we’re going to use big procurement words).
The analysis could lead you to go for an internal team, hire external consultants or go for a hybrid solution.
Therefore, the right solution will depend on your goals, your resources, your budget, and other things.
Second, the parameters to consider when hiring consultants go way beyond the scope of the project. Your organization, your company culture, and your availability or willingness to supervise projects, for instance, should also impact your choices.
Mistakes happen because of poor judgments. And while I am in favor of holding consultants accountable for their outcomes, I believe that procurement buyers and project sponsors should take their share of the blame as well.
Procuring consulting services is not rocket science. But it’s not easy either. I find that many buyers are unaware of the complexity of buying consulting services. That is why they often choose to work with big global consultancies instead of taking the time to find a good fit for their projects. And this can lead to major issues down the line.
Of course, there is no magic potion or single solution that fits all companies’ problems, but there is now at least one way out of hell: find the right partner!
If you need consulting services, determining how to find consultants can be a complicated task. Selecting which consultants to work with based on their quality, approach, responsiveness, and costs is not always easy. In addition, consultants’ geographical location or cultural fit could push your final decision one way or another. Before the hiring process starts, you can find the perfect consultant for your project by doing thorough research.
That’s where our episode ends. Next week, I’ll talk about how to lead a make-or-buy analysis for a consulting project
In the meantime, if you have any questions, or want to learn more about what we do at consulting quest, just send me an email at email@example.com
You can also have a look at our website smartconsultingsourcing.com to know more about our book and download free templates & guides to improve your consulting sourcing.
Bye and see you next week! Au revoir!