#BlackHole?: Consultancy outputs and why the vendor should care
It’s a classic working for a big company. There is a challenge at hand and neither the right know how nor enough time at hand to solve it. With a business environment becoming ever more complex with corresponding evolving skills needs, bringing in a consultancy is a good way to access that external know how. Consultants also have the benefit of working for various clients, in the same or different industries and they are therefore able to bring a breadth of external insights to the table.
A scope is then agreed on and work started. A really clear scope with defined outcomes that help the client then drive the problem to conclusion. Ideally, that is. In reality, the scope is often not quite clear, nor are expected deliverables. That may be because it’s an exploratory project where the outcomes should not be boxed in. Often though, it’s because the client has not taken the time to think through what they want out of the project. Pushed to do something, they have resorted to “throwing a consultancy” at the problem, so to speak. The consultancy is engaged with a loose area to tackle.
Now, especially if the commercial model is time and material, meaning you as the consultancy supplier are paid for however much time and resource you spend on the project, you may not initially care. It’s a project, it may be a prestigious client and you get paid. Good enough? Well, there are reasons that it’s not:
1. Tangible results
For a consultancy project to be a shining reference and case study, it’s not good enough to have produced a great power point. The project needs to have translated into real world results that have had tangible impact on the client’s business. Without that, it’s a shallow reference and any future clients smart enough to press for concrete results (and reference check) will not be dazzled.
2. Follow on projects
Landing a client is hard. So you want to build a relationship that leads to follow on projects. The client will only be able to justify that if you have helped them deliver towards their targets. Now, the fact that the output did not lead to concrete results may be entirely the client’s fault. They will rarely take the blame though and point towards the “ivory tower recommendations” produced by the consultant as the cause
3. Cross-sell internal
Similarly, projects can lead to business in other divisions/functions at the client, especially if you operate in a space transferable to different areas. Again, the internal recommendation will only come if you have both enabled the client to deliver on the recommendations and they have actually implemented it.
4. Scope creep
If you have agreed a fixed price project or a cost cap, a woozy project scope can quickly become a commercial risk as well. The client might steadily feed new ideas what needs to be produced and you exceed the allocated budget. Stuck between a rock and a hard place, you have then to ask for money, possibly before you have been able to deliver anything tangible or eat into your margin, at worst end up with a loss.
Having a meaningful project that is produces real result is also important for the motivation of your consultants. A profession often accused of being in love with business school slang and power-point, most professionals do actually want to see their ideas come to life to feel meaning in what they do. So working with clients who have you produce power points for the drawer is not motivational in the long run.
So bottom line is, you should care and while you don’t always have the luxury of being able to turn down client business, it’s important to clarify expectations up front, have a fair commercial model in place and ensure the client is committed to contributing during the process, which is crucial.
In afuture post, we'll talk more about what steps to take, to help clients realize what they really need out of the engagement, how to phrase outcomes, get them to provide the right inputs and talent during the project and how you can support them in translating the project into real life impact.