Ask A Business Expert - How Do I Hire A Management Consultant

How Do I Hire A Management Consultant?

An experienced Management Consultant can add tremendous value to your business.

This is because they’ll say what needs to be said, give independent analysis, make insightful recommendations, and they can also help you to successfully manage your projects.

So, if you want to learn how to hire a Management Consultant who can help you solve problems and take advantage of opportunities, then read on.

What Is A Management Consultant?

A Management Consultant offers professional guidance to help leaders plan and manage projects, resolve problems, and improve overall performance. They get results by applying proven methodologies, drawing from related experience, and clearly communicating with clients. Management Consultants can assist a business at any stage of development, from start-up to growth to merger and acquisition. They often have formal training including university degrees and professional association designations.

Management Consultants can help improve your business in a variety of areas including:

  • New Technology Implementation
  • Human Resource Management
  • Financial Management
  • Operational Efficiency Improvement
  • Strategic Planning
  • Project Management
  • Training and Development
  • Marketing and Communications
  • Change Management and more

Working with the right Management Consultant at the right time can have a positive, long-lasting impact on your business.

If you’d like to read our full definition of what a management consultant is, then check out the Ask A Business Expert Dictionary by clicking on this link.

10 Steps For Hiring A Management Consultant

Here are 10 steps to help you to successfully hire a Management Consultant.

  1. Define Your Project
  2. Understand Why You Need To Hire A Management Consultant
  3. Understand Yourself And How You Will Work With A Management Consultant
  4. Write Down Your Expectations
  5. Understand the Cost Of Hiring A Management Consultant
  6. Where To Find A Management Consultant
  7. Important Questions To Ask At Your First Discovery Meeting
  8. What To Look For In Proposals And Contracts
  9. How To Conduct A Project Kick-Off Meeting
  10. How To Manage The Engagement And Measure Results

Click here to download your copy of the ’10 Steps For Hiring A Management Consultant Checklist’

'10 Steps For Hiring A Management Consultant' Checklist √

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Step 1: Define Your Project

Before you hire a Management Consultant you must define your project.

Here are three key questions to consider when doing this.

  1. Why should we do this project?
  2. What results do we want from this project?
  3. How much time and money should we spend on this project?

For example, let’s say your company computers are running on Windows 7, and you want to upgrade to Windows 10.

Here’s how you could answer the question ‘Why should we do this project?’

  • We want to improve data security
  • We want to improve productivity by installing faster software
  • Windows 7 is no longer being supported

Here’s how you could answer the question ‘What results do we want from this project?’

  • We want to make more money from the efficiencies we’ll gain from running faster software
  • We want less staff turnover because one of the key reasons that some employees have quit is because their computers are too slow
  • We want to reach our strategic planning goal of being a leader in adopting new technology

Here’s how you could tackle the third question which is ‘How much time and money should we spend on this project?’

  • We want our staff to spend 1 day per month over the next three months to learn how to use the software
  • We want to hire an outside contractor to install and implement the software
  • Our total budget for this change will be $250,000

Of course, this is a very basic way to get started on building a business case for whether or not you should do this project. You’ll also have to get feedback from your colleagues and do some independent research.

But once you have a basic outline, then you’ll be ready to have a productive discovery conversation with a Management Consultant to learn about how they can be of service.

Because if you aren’t prepared before you meet with a Management Consultant, then you could run into problems.

For example, it will take longer for the Management Consultant to understand what you’re looking for.

If you don’t have any idea about how much to spend on the project, then you will be completely dependent on what the Management Consultant recommends from a cost perspective. If the consultant is ethical, then everything will work out, but if not, you might get overcharged.

With that in mind it’s easy to see how valuable it is to define as much of your project as possible before you meet with a Management Consultant.

“Good luck is when opportunity meets preparation, while bad luck is when lack of preparation meets reality.”

Step 2: Understand Why You Need To Hire A Management Consultant

Do you need to hire a Management Consultant to complete your project? Or can you get it done with your own employees?

Hiring a Management Consultant requires a significant investment of time and money. So, before you get started you should make the effort to understand why it will be worthwhile (or not).

Doing a ‘plus-minus’ exercise can help you figure out why you need to hire a consultant.

The ‘Plus-Minus’ Exercise

To get started you can set up two columns with a plus sign on the left and a minus sign on the right.

+

-

Now you can list the issue on top, and then you can fill in the pros and cons.

For example, let’s say that your company manufactures windows, and you realize that the profit you make per window is going down. You know you must improve the efficiency of your manufacturing process, but you’re not sure about the best way to do this.

Here’s how you might use a ‘plus-minus’ exercise to figure out if you want to do the efficiency improvement project with your employees.

Efficiency Improvement Project – With Employees

+

-

Employees have the experience and know what’s actually happening

Our employees don’t have the specialized skills to fix the problem

It will cost less

It could cost more if they must be trained about how to fix the problem

If our employees fix the problem, they will be really proud and want to work harder on other projects

If the problem is caused by our employees not doing their jobs properly, then they may not even want to be a part of the solution

Now, do a ‘plus-minus’ exercise in which you consider bringing in a Management Consultant.

Efficiency Improvement Project – With A Management Consultant

+

-

A Management Consultant will give an outside, objective opinion

If the Management Consultant is wrong, it will be a waste of time

A Management Consultant will use their experience from other projects to help us solve our problem

Our employees don't trust outside experts

Investing in a Management Consultant will be less expensive than training one of our employees

Working with a Management Consultant will cost too much money

The ‘plus-minus’ exercise can help senior leaders start a robust conversation, so that they can decide whether or not they want to bring in a Management Consultant.

“There is only one corner of the universe you can be certain of improving, and that’s your own self.”

Step 3: Understand Yourself And How You Will Work With A Management Consultant

Have you ever been frustrated with your Housekeeper? Contractor? Auto mechanic? Bookkeeper? Accountant? Project Manager? Consultant? CEO?

Is it always their fault if a project is not going well?

If so, then skip to the next section…

But if you are willing to take a moment to consider your part of the equation, then read on.

Know Thyself

If you want your project to succeed, and you’re going to hire a Management Consultant, then clear communication is critical.

Of course, great communication starts with understanding yourself and how you interact with others.

There are many ways to get to know yourself including:

  • Taking a personality test like Myers-Briggs, Harrison Assessment, DiSC, or True Colors
  • Working with a qualified therapist
  • Getting a mentor
  • Talking to trusted colleagues, family and friends about your behaviour
  • You may also want to set aside some personal time to read and reflect on your own behaviour

You can also get started by answering questions like:

  • How do I act when I work with consultants?
  • How do I want to act when I work with consultants?
  • How am I going to take control of how I act?

It Takes Two

Once you understand yourself, then you can make the most out of any consulting engagement.

For example, how will you react if the project gets behind schedule?

Will you:

  • Yell at the Management Consultant?
  • Threaten to hold back payments?
  • Speak calmly with them about the problem and assure them that you will work together to get the project back on track?

Projects are complex. Many things won’t go as expected.

How you work with your Management Consultant when the unexpected happens could make or break your project.

Pro-Tip

Set up regular check-ins with your Management Consultant during a project so you can be supportive and always know what’s going on.

Step 4: Write Down Your Expectations

So now that you understand yourself and how you will work with a Management Consultant during an engagement, it’s time to write down your expectations.

Doing this will help to lay the groundwork for choosing the right consultant, and it will also help you get into the right frame of mind to make the project a success.

Here’s a list of suggestions to get you started.

I expect my Management Consultant to:

  • Communicate clearly and honestly with me on a regular basis
  • Treat everyone in our organization with respect
  • Deliver high quality work at a fair price

Imagine what could happen if you don’t have a list of clear expectations.

  • Your project could be delayed because you didn’t keep in touch with the Management Consultant on a regular basis and they held back important information from you
  • You and the consultant might get into a fight and not know how to resolve it, instead of working productively together
  • The consultant might agree with everything you say just to please you

By having a written list of expectations, you’ll also be in a better position when it’s time to sign the Management Consultant’s contract.

Step 5: Understand The Cost Of Hiring A Management Consultant

The two main ways that Management Consultants charge for services are typically ‘Project-Based’ and ‘Per-Hour’.

Project Based Fees

With a Project-Based approach a Management Consultant will gather as much information as possible, and then come back with an all-in price to do the entire project.

For example, let’s say that your small business wanted to build a strategic plan.

In this case the Management Consultant would estimate the number of days it would take to do interviews with senior leaders, gather industry research, facilitate brainstorming sessions, and write the strategic plan.

Depending on complexity, they might propose a total cost of $25,000.

Fixed-Fee projects can be good for the client because it helps them to control their costs when they work with a Management Consultant.

Per-Hour Fees

For many projects a Management Consultant will charge an hourly fee, especially when there are too many unknowns.

For example, let’s say that you company culture is poor, and you want to bring in a Management Consultant to help turn it around.

This type of engagement is difficult to put a fixed price on for a variety of reasons.

  • Some people may be resistant to changing the way things are, and they will take longer to deal with than expected
  • Midway through the engagement the Management Consultant may discover information or behaviours that were not known at the beginning of the project, which could end up requiring more of their time.

With this in mind, the Management Consultant could estimate the total number of hours that will be required. They would also make a note in the contract that says something like, ‘due to the unknown factors this engagement will be billed out on an hourly basis.’ Then, when it’s getting close to the original estimate of total hours, the client and the Management Consultant would discuss what happened and make a plan about how to move forward.

Depending on which type Management Consulting firm you choose to work with, here is a range of what you can expect to pay per hour.

Large FirmMid-Sized FirmIndependent
$350 - $1,000 per hour $250 - $400 per hour $100 - $200 per hour

Retainer Fees

If you want to work with a Management Consultant on a regular basis, you may consider paying them a retainer fee.

In this situation they could reserve a few days per month to be available to work with your company. Then you could work out a reasonable day-rate, which could range from $1,000 to $5,000 per day, depending on the consultant’s experience.

You could also reserve a flexible block of hours. For example, you could book 12 hours per month, and then expect to pay between $100 to $500 per hour.

Value Based Fees

Experienced Management Consultants who have a proven track record will sometimes offer value-based fees.

This means that the client will pay for both the consultant’s time as well as a premium for their combined experience, knowledge and expertise.

Paying value-based fees can be beneficial, especially when the Management Consultant can provide rapid answers to resolve an issue.

Step 6: Where To Find A Management Consultant

Now that you have set your expectations and you have some idea about the cost, it’s time to find the right Management Consultant

The best way to find a reputable Management Consultant is through a referral. To get this process started you’ll want to reach out to your network of trusted colleagues to get solid recommendations.

Another great way to find a reputable Management Consultant is through Professional Associations.

Of course, there are Professional Associations for Management Consultants only. But you should also know that Management Consultants often hold multiple designations, which means that you may want to reach out to the Professionals Associations that are related to the area in which you are seeking help.

For example, if your issue required a Management Consultant with skills in Accounting, then you could also get in contact with your national or regional Accounting Association.

In the United States you could contact:

In Canada you could contact:

Note: You’ll also find a short version of this article titled ‘5-Steps To Hiring The Right Management Consultant‘ on the Canadian Association of Management Consultants website. 

Of course, there are many large Management Consulting firms including:

There are also many mid-sized and boutique Management Consulting firms that you should be able to get in touch with locally.

Here are some links to articles and ranking sites that you may also find helpful:

You may also want to also contact your local small business government organizations including organizations like:

Finding the right Management Consultant takes time. If you need help or a referral, then send an email to info@askabusinessexpert.com

Step 7: Important Questions To Ask At Your First Discovery Meeting

Here is a list of questions you can ask when you meet a Management Consultant for the first time.

  • How would you describe your approach to consulting?
  • What methods do you use?
  • How would you handle this project?
  • How do you work with teams?
  • How do you deal with confidentiality?
  • Do you have a non-disclosure agreement?
  • Do you have professional insurance, including errors and omissions and commercial general liability insurance?
  • Can you provide relevant references?
  • What is your fee structure?
  • Will you submit a proposal?
  • Do you have a thorough contract that protects all of us?

You might also show them the list of expectations you prepared in Step 4, so you can have an open and productive conversation.

Once you have decided on which Management Consultant you want to work with, then you can invite them to send you a proposal.

Step 8: What To Look For In Proposals And Contracts

Proposals

While we can’t go into too much detail in this article, here are some key things to look out for when you get a proposal.

Does the Management Consultant understand your company?

In every proposal you should see a brief description of your company. This will let you know that the Management Consultant has taken the time to understand the big picture in this situation.

Does the Management Consultant understand the problem and how to solve it?

You should also see a description of the problem and then read a clear set of actions that the Management Consultant would take to solve it.

Is there clear pricing?

Most proposals will indicate if there is a project-based price or hourly rate. You’ll also want to read for any potential additional costs including travel, accommodation, material fees etc.

Are there clear timelines?

In every proposal there should be a clear indication of when the project will start and end (and what happens if timelines can’t be met by either party)

Biographies and resumes

The Management Consultant should also include a relevant biography, along with resumes of any related team members who will be involved in the project.

Contracts

*Please note that this article is for reference only, and you should always consult with a lawyer before entering any contract.

Here is a basic overview of what you should expect to see in a contract from a Management Consultant.

  • Contact information for everyone involved
  • Acknowledgement that both parties are entering into a contract
  • Description of the scope of services that the Management Consultant will provide
  • Clear timelines (and what happens if timelines aren’t met).
  • Clear payment schedule

Contracts should also have Terms and Conditions that may include:

  • Methods of communication
  • Dispute resolution
  • Enforceability and legal jurisdiction
  • Handling of intellectual property
  • Confidentiality procedures
  • Behaviour on client premises
  • Termination of services
  • How to handle third party contractors
  • Limitation of liabilities
  • Non-compete clause
  • How change orders will be handled

After you go through the contract with your lawyer and everything is good to go, you can sign it and get the project started!

Step 9: How To Conduct A Project Kick-Off Meeting

Your first meeting with a Management Consultant will set the tone for the entire project.

With that in mind, here’s a basic agenda outline to help you get the most out of your first meeting.

Project Kick-Off – Meeting Agenda

  1. Introductions
  2. Expectations
  3. Project Clarification
  4. Action Plan
  5. Picture of Success
  6. Celebration Plan

1. Introductions

If you want your project to succeed, then everyone has to get to know each other.

So, at your first meeting you should set aside as much time as necessary to learn about:

  • Relevant personal issues – which might include whether someone has to take care of a sick relative, or perhaps they have a once-in-a-lifetime vacation that has to be taken into consideration
  • You might also want to speak in more depth about how the Management Consultant has worked on similar projects in the past

Investing in getting to know each other will help you to build up trust, which can go a lot further than money, especially when a project isn’t going as planned.

2. Expectations

During the next part of the kick-off meeting, you should clearly lay out your expectations about how you will communicate with each other.

A great starting place for this discussion is for you to read from the list of expectations that you wrote down in Step 4.

Then, the Management Consultant can respond to each item, and you will be able to have an honest conversation about how you’re going to act with each other during the engagement.

For example, let’s say that one of the expectations is to set out ‘ground rules’ for how to handle disagreements during meetings.

The client might say ‘If we have a heated discussion let’s make sure that only one person speaks, and that we make it about the issue and not about the person’.

Then the Management Consultant could confirm that approach or make alternate suggestions about how to handle disagreements.

Setting clear expectations for how you will treat each other is a great way to make your project successful.

3. Project Clarification

After getting to know each other and deciding how you will behave, it’s time to get on the same page in terms of the project itself.

A great way to start this discussion is to read the detailed description of the project that is contained in the signed contract.

This will allow you to clearly understand each line item, confirm that everyone agrees, or work through any discrepancies.

This approach will also help set you up for the next part of the meeting.

4. Action Plan

Management Consulting contracts should lay out a timeline for when things will get done.

Now, during the kick-off meeting, you’ll have a chance to discuss what was recommended in the contract, and then build out a more detailed action plan.

  • Has anything changed since the contract was signed?
  • Can everything still be completed on time and on budget?
  • When can the Management Consultant deliver a fully detailed action plan for the client’s approval?

5. Picture Of Success

Now that you have talked about expectations and how to lay out a clear action plan, it’s time to step back and talk about the big picture.

  • If everything goes right with this project, what will the result be?
  • How will you and the Management Consultant win?
  • What will that referral letter for the Management Consultant look like if they fully deliver on all expectations?

Small details in a project can eat up too much time and energy. That is why you always want to be able to talk about the main goals of the project, so that everyone involved knows that you’re headed in the right direction.

6. Celebration Plan

What will you do when the project ends?

Projects can be intense, and then end abruptly. So, it may be worthwhile to plan a celebration early on, so that when your project is over, you’ll have a chance to talk about the shared experience.

This is valuable because:

  • It will help the Management Consultant to talk about what went well (and what didn’t)
  • It will help the client to talk in detail about how things went, so that they can improve the next time they hire a Management Consultant

Step 10: How To Manage The Engagement And Measure Results

If you’ve spent the time to understand yourself, set expectations and communicate clearly, then helping the Management Consultant to deliver the project will be straightforward.

But if the project gets off track, then you’ll be able to rely on the contingency wording in the contract itself.

As for measuring results, you should refer to the key success factors that were identified in the kick-off meeting.

For example, you could measure:

  • If the project was delivered on-time
  • If the project was delivered on-budget
  • Whether the project achieved the original expected outcomes for the end users

As you do more projects with Management Consultants, you’ll be able to create your own customized list of measurables.

Conclusion

When you hire the right Management Consultant, then your project and ultimately your entire organization will benefit.

In this article we covered 10 step to help you to successfully hire a good Management Consultant.

  1. Define Your Project
  2. Understand Why You Need To Hire A Management Consultant
  3. Understand Yourself And How You Will Work With A Management Consultant
  4. Write Down Your Expectations
  5. Understand the Cost Of Hiring A Management Consultant
  6. Where To Find A Management Consultant
  7. Important Questions To Ask At Your First Discovery Meeting
  8. What To Look For In Proposals And Contracts
  9. How To Conduct A Project Kick-Off Meeting
  10. How To Manage The Engagement And Measure Results

Investing in Steps 1-6 will help you to clearly define you project and set realistic expectations. It will also put you in a great position for your first meeting with a Management Consultant.

After you get all the answers you need in your first discovery meeting, then you’ll be able to select which Management Consultants you would like to invite to submit a proposal.

Once you have selected a consultant, then you’ll be able to review their contract with a lawyer, sign it, and get started!

Because you have taken the time to be so thorough up to this point, then you can expect your first meeting with the Management Consultant to go well.

After that it will be a matter of sticking to the plan as much as possible, continuing to manage expectations, and ultimately getting the project completed on-budget and on-time.

Finally, because you defined what success looks like, you’ll be able to measure key aspects to know how successful the project was.

By following this type of process you’ll increase your overall likelihood of success when you hire a Management Consultant.

Gordon Sheppard

Gordon Sheppard

Gordon Sheppard is a Leadership Coach, Consultant, Facilitator, Online Training Expert, Author, and Podcaster. He helps business leaders get the information, advice and inspiration they need to be successful. He is also the CEO of Business Expert Solutions Inc.

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