How to get better value from consultants

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I’ve seen another half thought through proposal published in the Mandarin on how to avoid the costs of consultants.I’m a bit rude about it actually, because its providing the wrong answer to the wrong problem – the stuff that consultants do far too often.

You can see my commentary below.

While I agree that we often don’t get good value from consultants – the answer isn’t avoidance.

Consultants are here to stay – the answer is to get better value out of them.

So rather than just poke I am going to put my head above the parapet and give some insight in how consulting companies work, and how to unlock their value.

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Next event is 10th February 9.30 AM AEDT

 


A copy of my article as published in The Mandarin:

 

Thought bubble or brain f*#t?. The recent article published here proposing that, like Defence, the public sector establish a reserve of public servants that can be drawn upon to fill roles quickly and cheaply just doesn’t stand scrutiny.

It’s the wrong answer to the wrong question. Let’s pull the idea apart.

 

Is using Defence Reservists a good idea?

The use of Reservists to access skills of which there is a shortfall in Defence -support to exercises, contemporary requirements and skills, fighting bushfires, floods, rapid mobilisation and response, and using Army chainsaws – is the intended purpose and clearly a sound idea.

Writing reams of paper for government submissions, project management and business-like activity? Not only are those skills readily available in the market, they are not core military skills. Other people do them better.

If the complaint is about officer one day and back through the revolving door as a high paid consultant the next, then this thought bubble is the epitome of the revolving door. No new ideas, no new experiences, or new ways of doing business.  Worse, these proposed reservists no longer have a career, no performance management and no skin in the game.  Typically, they are now in semi-retirement with their focus elsewhere – reasonably and with good cause. I would have thought you want people focussed on your task.

There are those who have not transitioned to an easier life. They are working for someone else. Defence is making a mistake of creating an alternate workforce in the wrong roles, perpetuating the past. Let’s not expand it.

There is a place for reservists, but it is not as an alternative contractor workforce.

Avoids the administrative overhead of tendering and lower costs

It does, but should it? Competition is there for a reason and selecting individuals from a pool who have “moved on” isn’t competition.

Competition is about value for money – selecting reservists is about cost. Defence Reserve funding comes out of a different “bucket” so the business owner doesn’t see the cost of the project or bear the real cost. They are finding ways to do business the way they always have and hiding the cost outside of the project funding.

If you want to lower the cost of tendering and its overhead – address that process. Don’t substitute a suboptimal approach because of cost – it’s a drive to mediocrity and avoids the real issue.

I’m getting the same person back who left

No you are not, IF they have joined the commercial world. That person no longer has tenure. They now carry a personal risk that no Defence or Public servant carries. If they do a poor job, they get fired. If the client doesn’t want them, they get fired. If the job dries up, they get fired. They are held to a higher standard than an employee – the work should be exemplary, available, timely, insightful. They now think differently – and so behave differently.

They should know more. Companies come with process, experience and learning. As an individual they should be educated in the art of consulting and the corporate know-how, which should be channelled to you. You should not be buying the expertise of an individual.

You should be getting oversight, quality assurance, peer review, IP, value added insight. If you are not getting those things you hired the wrong company. Make a different choice.

They would prefer to work for the Commonwealth than as private contractors

But they were working for the Commonwealth, so why aren’t they still there?

Only two reasons I can think of: they don’t want to be, or the Commonwealth didn’t want them. If the Commonwealth wanted them, then keep them. If they weren’t wanted, why would they want them back, at any price?

It saves $1,500 a day

It might, but at what cost? I couldn’t agree more that a $1,500 a day contractor who offers no more value than what they provided inside the organisation is overpaid.

There are better ways to procure surrogate resources than the panel models used by Defence and government.  The RFTs too often request warm bodies working under the direction of the Commonwealth, rather than delivering outcome to the Commonwealth.  Its too hard to write a proper requirement, to think about how to do it differently – so a simple RFQ asking for someone to do the things they are told results. Its quick, its easy, its poor practice.

The problem isn’t price, it’s how consultants are procured and managed, and what they are allowed to get away with in delivery. Buy better, demand more.

The answer to poor consulting is to demand better consulting
If you are not getting more for the $1,500 a day than you get for $350 then hire, don’t buy.

Using a Reservist or casual hire for doing things industry can’t do – the domain specific issues of Defence or the public sector is a sound choice. Using them to do administrative and management tasks should be poor value for money.

But neither the Defence nor the public service can manage performance. If you don’t bring people from outside then you don’t get new ideas. If you do it the way you always have, with the people you have always had, then you will always be the same.

The answer to poor consulting is to demand better consulting.

Good consulting starts by asking for outcomes, not surrogate resources. It means buying better and then managing better.  It means being comfortable with allowing the delivery process to unfold differently, because consultants have seen it done differently, rather than doing it the only way you know how.

Demand that it be done sharper, smarter, to a better quality with faster turnaround. Demand oversight, insight, and execution. If you get poor outcomes, then change your supplier. Don’t hire consultants to do your business, that is a waste of money. But if they can’t deliver on their business, if they can’t provide value: change. Try a new one.

Ideas on how to save money without thinking about creating value – brain f%#t.

 

 

How to get better value from consultants

Change the Equation

Want to know how to get better value from your consultants?

Putting his money where his mouth is, John is offering an Insight session with actionable tips on how to unlock that value.

Give me 30 minutes to reshape your perspective on how to engage consultants

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