Management consultants are either sole practitioners who work with a small support staff or members of a consulting firm who work with professional colleagues and a large support staff. They may be generalists able to work with top management on a wide range of concerns or specialists.

Common consulting specialties include:

Research & Development                                                     Physical Distribution

Financial Planning & Control                                                 Sales & Marketing

Human Resources Management & Labor Relations              Administration

Manufacturing                                                                       Information Technology

Wage & Salary Administration                                               Incentive Compensation

Organizational Planning & Development                               Strategic & Business Planning

At times, you will be able to specify the issue, such as a puzzling increase in workplace injuries. Often, however, this will not be possible. In such cases, listing symptoms or desired goals will usually indicate the type of consultant you need.

Be aware, though, that often a consultant’s largest contribution is to help clients define problems or opportunities. Your initial conversation with a consultant should tell you if your problem has been properly defined.

A management consultant’s fee will be influenced by a number of factors, including the client’s need for special knowledge and experience; how much competition for clients there is; the consultant’s reputation; and, if known, the benefit to the client of a successful outcome.

In a typical engagement a consultant may charge a portion of the total fee when the project begins and throughout the project (including any adjustment) until acceptance of the final report. Management consultants who have previously engaged in projects that resemble yours will generally quote a flat fee. Occasionally this fee is payable in advance, but more commonly it is paid according to a benchmark-related schedule.

When the management consultant serves in a purely advisory or coaching capacity, it is traditional to charge a flat fee for each advisory session, board of directors meeting, or private session.

Sometimes the consulting arrangement will involve a not-to-exceed figure or a figure that when reached triggers a joint evaluation of results-to-date and an estimate of the time needed to reach a satisfactory conclusion.

Occasionally, management consultants encounter a prospective client who wants fees to be on a contingency basis; for example, a certain amount when sales exceed a target figure or when cost reductions exceed a specified figure. Contingency arrangements may work, but this depends ultimately on the parties’ integrity. By avoiding pure contingency arrangements you can help assure the consultant’s objectivity.

Management consultants generally bill separately for expenses (travel, entertainment, communications, and special services) as they accumulate, often at monthly intervals.

Select for interviews the two or three consultants whose experience comes closest to matching the situation you have defined. It is very important to determine that each consultant, not just his or her firm, displays a thorough familiarity with the situation. The references each candidate provides should confirm the consultant’s previous success in a similar context. You will want to learn the outcomes of relevant consulting engagements, whether the consultant used honesty and tact when making recommendations, and how well he or she worked with an organization’s people.

In addition, you will want the following information: the consultant’s experience in handling similar situations, what her references say about her ability to make things happen, and whether she has established personal rapport with management during her initial interviews. Experience is important but not to the exclusion of the other considerations.

All reputable consultants consider the detailed knowledge they gain of a client’s operations and personnel to be confidential. Such information is not to be discussed with, or disclosed to, a third party without the client’s expressed permission. Further, no ethical consultant will work with two competing firms without the permission of both. These are requirements of the codes of ethics to which all reputable consultants subscribe. See IMC Code of Ethics.

The process of making certain that a consultant is on the same page with you resembles hiring a top-level executive: you must find a set of values, competencies, and approaches that will take you and your organization where you want to go.   

 

The following questions are designed to help you identify consultants who fit your needs and are compatible with your organization. They help you to prepare for and subsequently evaluate your meeting with prospective management consultants.

What would be the same? What characteristics of your organization are highly valued? For example: Our first-to-market approach has helped us gain the largest market share. We have a collaborative environment, which has been key to our success.

Did the consultant ask questions that helped you clarify or think differently about your situation?