Mr. Business Leader: Do You Know How to Shop For Management Consultancy?

Management consulting is, as a service, rarely well-defined or understood. It tends to be bought on faith or under unclear expectations. Many times, it falls outside the radar of Procurement, which tends to be relegated to “processing the order” after decisions have been made. 

As a consultant in operational excellence with over 25 years in the field, I’ve been brought in more than a couple times as “the second consultant” to try to fix what was left from a prior consulting engagement. In nearly all occasions, part of the problem originated in poor procurement practices for consulting services.

This lack of procurement criteria when contracting this particular type of services comes from excessive trust on the advisor, a prior positive experience with the same provider, lack of clarity on what the solution might look like (“After all, that’s why we are calling the external consultant”) or the conditions in which this solution should be delivered.

Applying procurement criteria to consultancy purchases does not imply evaluating three distinct offers and commoditizing the service you wish to receive. You may hire your trusted consultant or advisor without considering anyone else and still apply healthy procurement practices and consultancy standards on what you should expect from your management consultancy services provider (MCSP), both at the contractual stage and through the project’s delivery and closure.

I volunteer with the CMC-Global Institute –the global organization that provides a home to management consultants in all five continents– and currently have the privilege to serve as its Chairperson. One of the main objectives of the Institute is to educate not only consultants, but also buyers of consulting services about the global standards that the profession has, which clarifies greatly what you should expect from someone who is going to give you recommendations about your business.

A more educated buyer of management consulting services benefits not only the company that purchases services, but the consultant as well. A well-defined consultancy service usually delivers faster, with less risk. Plus, the criteria to compensate the provider is also more transparent. 

There are currently two global standards: one associated to the process of contracting and delivering management consultancy services; and another based on a very thorough framework that evaluates the competencies of an individual calling him or herself a management consultant.

This competency framework, which is applicable to any field of expertise the consultant may have, ensures that your provider has the professional dedication, caliber and “flight hours” considered the minimum standard for diagnosing a company and issuing recommendations on whatever field the individual is an expert on.

Implementing global standards and practices in your company’s management consulting purchasing process does not imply that you will hire someone different or that you will stop using your trusted advisor on your next contract. It means that you will refine the way in which you contractually agree what you expect to see when the project is finished and that you ensure that there is a common understanding and conceptualization of the delivered product or service between you and your provider.

There was a lot of fuss in the industry last year over a book that sought to expose poor or unethical practices in some projects. It is very hard to judge from the outside the individual conditions and agreements that led to the situations that served as a basis for that book. Nevertheless, I can assure you that a company “vaccinates itself” against these situations if good practices and standards are at the heart of its management consulting procurement processes and policies.

I hope this article will prompt you to do research of your own and to sit down with your Procurement Head to establish basic rules that will mitigate risk when investing in management consulting services. 

It is all part of good management practices and, thus, of good governance. Management consulting decisions are usually taken at the C-Level or the Board. This is an opportunity for improvement at a level where decisions are never easy and where there is usually very little guidance.