The New Way to Optimize Consulting for Maximum Impact – Key Points to Apply to Your Next Project ( Five Wrong Approach Scenarios and How to Avoid Them?)
Consulting can create great value for companies who can use it strategically and are able to leverage the advantages it offers. But there are smart ways to do it, and some not so smart.
So how is your company spending on Consulting? And what projects are best to focus on? You probably have seen an internal project not delivering fast and strong enough because the team players were too busy in their daily operations. And were petrified at the idea of jeopardizing their careers.
Consulting can be a powerful lever for Companies to accelerate value creation and avoid some pitfalls. It addresses two main challenges: focus and independence. Projects supported by the right consultant can achieve higher value than the same projects done internally.
But Clients do not always optimize the way they use Consulting. Based on years of experience in helping companies like yours, we have seen the most common issues play over and over again.
Know the Consulting industry
How to add extra value to my project? How can a Consultant help me expand the possibilities beyond solving the main issues?
The first step in optimizing your use of Consulting is to make sure you are spending your money on the right projects.
What this means is aiming for alignment of projects with your strategy, and decide which projects are best to spend money on. Your strategy reflects your vision, and your Consulting projects should be fully synchronized with it.
There is no one-fits-all strategy that will magically produce a competitive edge for your Company. But most executives would recognize that, besides an ambitious strategy, success cannot happen without the alignment of all the elements of the business, including the spend and the organization, to the overall strategy.
There are two Main Categories of Consulting projects, and it’s important to distinguish them.
Among the consulting projects done during the last 12 months, how many were supporting your strategy? Or at least considered strategic at the time they were launched?
The two types of strategic projects:
- Core Strategy Projects – These are projects that support a core strategic workstream, and directly advance the long-term vision of the company. Projects enabling strategic projects fall in this category as well. For instance, your company has decided to implement a customer-centric organization. The consulting project supporting the transformation will be considered a core strategy project.
- Strategic Adaptation Projects – These are projects that are needed to adapt an issue or a new regulation. For instance, when the French government decided to regulate Gas Distribution in 2000, all gas operators in France had two years to get compliant with the new regulation. The project supporting the adaptation of internal rules and organizations was a strategic adaptation project.
It’s really easy to view and sort your projects in these two categories. You can have a limited number of non-strategic projects, in particular, small projects under the demand management threshold.
– Underutilizing Consulting:This situation is quite frequent in traditional industries, such as chemicals or manufacturing and applies to small to mid-sized Companies. Executives tend to think that consulting is expensive, or that Consultants do not really create value. Using Consulting is seen as a sign of weakness and a waste of money.
– Overutilizing Consulting: In some Companies, Executives cannot move a finger without the help of a consultant. A Large European bank noticed during a budget exercise supported by a large Consulting firm that all the different functions of the group had prepared the meeting with their “private” consultant. Another Change management consultant realized that all participants in the team-building workshop he was facilitating for his manufacturing client, were, in fact, coming from various consulting firms.
– When Consultants are utilized on the wrong projects: This mistake is the most common one. Companies don’t always anticipate and prioritize their needs for Consulting and draw their consultant anytime they are stuck or need to accelerate. The first one to use the budget gets the resources. But was implementing a brand new ERP on a division that is about to be divested, a smart move?
– Getting lost between internal and external resources: This is a tricky situation. These companies have identified the priorities of their projects, but they underestimated the challenges of handling them internally or the benefits of third-party intervention.
– Applying the wrong compensation models: There are many ways to compensate consultants, and each one of them has a range of applications when it benefits both sides. Few companies have mastered this subject and apply optimized compensation models. Should you compensate for time or impact? How to handle a project that is late by one year? You need to be very clear on these questions.
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Hélène Laffitte is the CEO of Consulting Quest, a Global Performance-Driven Consulting Platform and author of “Smart Consulting Sourcing”, a step by step guide to getting the best ROI from your consulting. With a blend of experience in Procurement and Consulting, Hélène is passionate about helping Companies create more value through Consulting.