Introduction

Organizations from large government agencies to small NGOs commonly hire consultants to solve a myriad of issues. But many organizations are not getting the best value from their consultants. It could be because they didn’t plan ahead of hiring a consultant, they didn’t hire the right consultant, or they didn’t develop the right working relationship with their consultant. This primer is intended to help organizations understand the consulting landscape: what the right consultant can do, how to nd that consultant, and why developing a partnership with the right consultant can make a world of dierence. Each chapter in this eBook has tools to help you in the process – from worksheets and checklists, to important questions to ask of stakeholders, teams, and potential consultants. We hope this eBook is a useful resource to help you and your team work in partnership with consultants to achieve your goals. The relevant question is not simply what shall we do tomorrow, but rather what shall we do today in order to get ready for tomorrow. Peter Drucker “

Understanding Consulting Trends Organizations are increasingly looking to consultants to help them drive innovation and impact. As business thinking evolves from traditional to “disruptive,” consultants with senior strategic experience and deep industry insights are in greater demand to help leaders position their organizations and projects to be models for a new way forward.

Growing Industry Focuses:

Creative Partnerships Talent Management Multi Source Consulting Models

Performance Based Pricing Value Added Services Deep Industry & Client Insights Agile Mentality

Crowd Sourced Consulting Delivery

Understanding Social Sector Consulting Social sector consulting is a newer arm of consulting. The “big 5” consulting rms have established targeted social sector arms and there are a growing number of sector specic rms, agencies, and independent consultants. This puts organization leaders in the driver’s seat in terms of being able to hone in on their specic needs and hand-pick consultants that will best support them.

With social sector funding transitioning from government to private (i.e. Bill and Melinda Gates Foundation) and social enterprise (for prot social interventions funded by venture capitalists) becoming more common , there is a growing emphasis on strong strategic planning and robust evaluation. Organizations that are able to position themselves as leaders on these fronts will be best positioned to capitalize on changes in funding streams. This is a key area where consultants are extremely well positioned to support social sector organizations.

Finally, consultants are being asked to expand their support to help organizations be more ecient and eective with increasingly limited resources. The value adds that are important in today’s environment are: improving organizational eectiveness, facilitating client training, and building commitment and consensus. Hierarchy of Consulting Purposes

Traditional Purposes Additional Goals Improve Organizational Effectiveness Facilitate Client Learning Build Consensus & Commitment Assist Implementation Provide Recommendations Conduct Diagnosis that may Redefine the Problem

Provide Solution to Given Problem

Source: Harvard Business Review Provide Requested Information

Why Hire a Consultant

Organizations use consultants in different ways for different projects. But it always boils down to one thing: solving a problem. Consultants are masters at solving problems, whether the solution is more hands or more expertise. The right consultant for the right project can help your organization reach its goals while increasing effectiveness and saving money. Common issues consultants are brought in to address include the following.

We’ve all been there. We’re sitting in planning meetings and phrases like “that’s the way we’ve always done it…” or “let’s not rock the boat” start creeping into the conversation with growing frequency. That may be a clue that’s it is time to hire a consultant. A consultant can bring a fresh perspective and may be able to encourage teams to lean into new ideas in ways that may be difficult for established members of the team. Providing an Outside Perspective

Any consultants worth their salt should be up to speed on the trends and research in their given area of expertise. It’s this constantly evolving knowledge base that helps consultants help your team from being staid and stale in its thinking.

Often times an organization will have a short-term project that’s going to be a heavy lift for a finite period of time. Cue the consultant. They are ideal for staffing “bandwidth” issues – consultants can be dedicated 100% of the time a specific project, focusing on its success. They will save you time and money. You don’t need to invest in their professional development like you should for an employee, nor do you need to spend time mentoring or managing them. Lending Extra Horsepower

While their hourly rate may seem high at first glance, remember that you are not paying for their benefits, which can amount to about a third of an employee’s total compensation. As an example, let’s assume you have a project that will require one full time person for six months. If you hire an employee at $50 an hour, your actual cost will be about $124,000 a year since the employee will still be on your payroll after the project unless you lay them off. And then you should factor in the financial impact layoffs could have on your organization’s contributions into your state’s unemployment trust fund. Conversely, if you hire a consultant at $100 an hour, your cost for the project will be $96,000. While the

Offering Specialized Skills or Expertise In today’s business environment, most organizations do not have the luxury of having comprehensive teams. This means that a research team may have need for specialized communication skills, or a programmatic team may benefit from high level strategic expertise. Most consultants have specialized skills sets that can make them a highly beneficial short-term member of your team.

In addition to specialized skills, consultants are very often experts in their fields. For instance, a consultant may have specialized skills in strategic planning, and expertise in a particular field such as public health.

What Consultants Can’t Do

It’s important to understand the full scope of what consultants can bring to the table in order to get the most of your partnership with your consultant.

It’s just as important to have realistic expectations and understand what a consultant cannot do. There are two big buckets that are important limitations to understand:

Consultants can’t drive change alone. They can identify opportunities for change, make the case for change, build the strategy, and help facilitate the process. But it’s the organization’s leaders that make decisions and set the tone, and the staff that implement change.

Consultants can’t work in a vacuum. Unless you’ve hired a consultant for a stand-alone/ independent project, you’ll need to partner with them. A consultant needs your insight and guidance to produce relevant recommendations and solutions. Consultants may provide training and oversight to guide the success, but again you and your staff will need to implement.

These consultants can bring evidence-based solutions based on years of experience. Although, keep in mind that many skills translate across sectors. For instance, strategic planning is similar regardless of the sector.

Being a Catalyst for Change Change is hard and very few organizations, teams, or individuals enjoy the process. But it is a necessary part of success.

A consultant can be the ideal person to help facilitate the process. Consultants are ideally positioned to provide recommendations that, because of corporate culture or politics, are difficult for internal stakeholders to make.

Additionally, many consultants who specialize in this type of work are highly skilled in participatory processes that make necessary changes more collaboratively driven, and can help garner the buy-in needed to make changes sustainable and successful.

Because many consultants have senior level skills and expertise, they are great for building the capacity within your team. Organizations leverage consultants differently to develop their teams but training is probably the easiest way. It’s very easy and cost effective to hire consultants to conduct trainings and workshops, facilitate round tables, etc. This transfer of knowledge is one of the fastest ways to grow your staff’s skill set. Building Capacity within an Organization

Debunking the Myths

1. We can’t afford consultants, they’re too expensive. Different consultants have different rates and you generally get what you pay for. If your project needs senior level expertise to ensure success, you do need to be prepared to pay for that expertise. But the “extra horsepower” example in this chapter illustrates how consultants can often actually save you money. It’s up to you to determine your budget and find the right fit based on your needs.

2. Consultants do essentially what we can do ourselves. While you may want to hire a consultant who is familiar with your field, it doesn’t mean they do what you do. Consultants, because they work with diverse clients, are well positioned to provide insights into how others are successfully navigating similar issues, emerging trends that your organization should be prepared to embrace, and opportunities for growth.

3. Consultants just create pretty presentations and “shelf ware.” If all you get out of a consultant’s work is a gorgeous Power Point and some shelf ware (polished binders that just sit on a shelf), that signals that the partnership between you and your consultant wasn’t strong and deliverables missed the mark. Or it could signal that, while the work was good, the desire or ability to implement was lacking. It’s crucial to build the relationship between you and your consultant, and make sure the time is right to bring in a consultant in order to ensure you end up with more than shelf ware.

4. Contractors and consultants are the same things. Actually, they are very different. A contractor more closely fills an “employee” role in that they are usually brought in for a specified period of time to provide a specific service. They are there to do the work but generally not to strategize on how to grow or improve the organization.

Consultants are senior experts brought in to assess, advise, and solve problems. They can also implement their recommendations for clients, but their primary role is as an advisor.

How Consultants Can Help You Meet Your Needs

• Facilitate strategic planning process • Offer a fresh perspective on an organization’s strengths and opportunities • Share expertise for program development and evaluation Help your organization reach its goals

Help save you money

Help your staff be more effective

• Develop new systems for managing operations or providing services • Identify inefficiencies and help solve them • Offer creative, innovative solutions for cost savings • Complete short-term project without having to hire new staff • Take on project that take staff away from their core respons- bilities • Provide training and support • Improve communication and conflict resolution to hire new staff

Understanding Your Needs

In order to get the right consultant for your project, you need to spend a little time figuring out your project. Many times an organization doesn’t take the time to design the project, assuming that is the consultant’s job. While it’s true many consultants can develop strategies and work plans, they need a place to start.

Use our 5 D’s to think through your project:

What’s the issue? Be as specific as possible, while acknowledging that a greater understanding of the issue will evolve through formative research and as the project get under way. Large sweeping statements like, “our structure isn’t working” are probably too general to be helpful. Instead try something like, “employee surveys indicate frustration with team structure and effectiveness.” Diagnose the Problem

Don’t worry about making them SMART at this point in time, that’s something your consultant can, and should, help you with. But do get down the broad strokes of what you want to accomplish. Using the same example, high level goals and objectives could be as simple as “understand root causes of frustration and implement a reorganization to improve effectiveness.” Define Your Goals and Objectives

Decide if the Time is Right Timing is everything. The best intentions and the best consultant cannot deliver success if the timing isn’t right.

Ask yourself the following: • How important is this project to your organization’s mission? • What value does it add? • What are the costs if you don’t do the project? • What are the costs if you do the project in -house? • Do you have the budget to undertake this project? • Are the decision-makers in the organization on board with this project? • If not, what needs to happen for them to support it?

Determine What You Want the Consultant to Do

Are you looking for a consultant to lead your project, support it, or handle distinct components of it? Be clear on the scope so a consultant can give you an accurate estimate and time line. Be realistic so that the scope and budget are in line.

Based on the scope of work, what are the characteristics your consultant should have? Describe the Type of Consultant You Need

Think through: • Level of experience • Sector experience • Specific skill expertise

You may not always find a consultant with both deep industry knowledge and expert skills. Depending on the project, skills may be more important than industry experience, and vice versa. For less technical projects, you can often provide the sector insight and look for a consultant with expert skills.

10 Questions to Ask Your Team Before Hiring a Consultant

There may be many reasons why your organization is considering hiring a consultant. Before you start the process of identifying the right person or organization to meet your needs, ask your team these important questions to ensure you have a clear scope, readiness, and rationale.

1. What are the goals and end outcomes of the project? What does success look like?

2. How important is this project to your organization’s mission? What value does it add?

3. How much funding can be allocated for this project?

4. Is leadership supportive of the project?

5. What is the advantage of hiring a consultant for this project? Could it be done in-house with similar costs, effort, and quality?

6. Do stakeholders have the time to spend with consultants for insight and input?

7. Are leadership and staff on board to implement recommendations?

8. Who will lead the effort? Does that person have the time, insight, and position to oversee the project? What are this person’s current responsibil- ities? Would some of that work need to shift? And if so, to whom?

9. What are the critical tasks and deliverables for this project?

10. What is the deadline for the project? Is it sufficient time for the level and quality of work expected?

What to look for in a Consultant

11 Consultants come in all shapes and sizes. Often times, organizations will hire consultants based on submitted proposals or their ability to fit within contracting requirements without really vetting consultants.

Understanding Levels of Consultants Before talking with potential consultants, you need to know how experienced a consultant you need. If your project is lower level analytics, a less experienced consultant will do just fine. But if you are looking to a consultant to help you with big mission-centric issues like organizational effectiveness or strategic planning you need to be looking for a much more experienced consultant. The chart below shows the type of work done by consultants with varying degrees of experience, and can be helpful in understanding how much experience you should be looking for.

100%

75%

50%

25%

Yrs. of Exp.

Breakdown of Consultant Competencies by Position

Project Mgmt. Problem Solving

Analytics/ Slide Building

Analyst 1-3 years Pre-Grad Degree Problem Solving Influence/Strategy

Project Mgmt. Influence/Strategy

Problem Solving Influence/Strategy Influence/Strategy

Analytics/ Slide Building Project Mgmt.

Analytics/ Slides Associate Manager 1-2 years Post-Grad Degree 3-4 years Post-Grad Degree Problem Solving

Problem Solving

Project Mgmt. Project Mgmt. Director Principal/Partner 5-7 years Post-Grad Degree 8+ years Post-Grad Degree Adapted from CharlesAris.com

Questions You Should Ask a Consultant Success depends on taking the time to find the right person or team to meet your needs. A consultant might be a perfect fit for one project but not for another. A team may have great expertise but a working style that doesn’t mesh with your organizational culture. So it’s important to do a little leg work up front. It is also critical to make sure you and the consultant you hire have shared expectations and a clear process for working together.

Before you hire a consultant, ask them these important questions to ensure you are on the same page and the partnership is the right fit.

1. How familiar are you working with an organization like ours (size, type, scope)?

2. How much experience do you have with similar projects?

3. What makes you the right fit for this project and for our organization?

4. How would you measure the success of this project?

5. What steps will you take to ensure the project is successful? What do you think are major milestones?

6. What will each of our roles be in completing this project? What type and level of support do you expect from us?

7. What is your proposed process for working together?

8. What is your proposed process for developing and finalizing deliverables?

9. What is your proposed timing, estimated cost, and preferred payment structure?

10. Do you foresee any challenges in providing the deliverables within the proposed timeline?

Use our printable worksheet, “Vetting Consultants” to interview potential consultants. Tools and resources can be found at the end of this book.

5 Characteristics of Successful Consultants 1.Team Player: Ask about their work style. Listen for hints to their work philosophy. Great words to hear are words like participatory and collaborative. You want a consultant that values the input and expertise of others.

2. Great Communication Skills: This includes oral, written, and listening skills. Your consultant should be well versed in how to engage different audiences, create an environment that makes people want to participate, and how to set expectations without putting off team members.

3. Expert Knowledge: If you’re hiring a consultant for senior level work, make sure they are experts in their field whether sector or skill. A great consultant should be both a generalist, with a wide variety of skills, but also an expert specialist in key areas in order to give your organization valuable insights and recommendations.

4. Flexibility: A good consultant should be able to adjust their work style to the requirements of the project and the working culture of the client.

5. Good Judgment: Be wary of the consultant that gives snap answers. You want a consultant with great judgment who takes time to consider the facts and solicit feedback before providing recommendations.

Vetting Consultants

If you think you’ve found a good fit, take the time to do some vetting before you make a final decision.

• Request references for similar work. Take the time to ask what went well, and what did not. This is especially important in cases where consultants may not be able to share examples of similar deliverables due to client confidentiality.

• Review what they’ve published. Has your potential consultant published? If so, take the time to read the articles as it can give you a great deal of insight into the consultant’s subject matter expertise, approach, and grasp of import- ant theoretical concepts, etc. Don’t limit your search to peer-reviewed journals, check out their website, blogs and other types of publications.

• Check out social media. A good consultant will have a robust Linked In page. Take the time to look at it. A great Linked In profile will have examples of work, recommendations from previous clients and colleagues, awards earned, and more to give you a multidimensional view of the consultant.

• Know what forms you need. If your organization requires non-disclosure, non-compete, or other agreements, make sure the consultant is willing to sign them.

Understanding Consulting Costs

There are many factors that impact consulting costs ranging from the type of work and the level of expertise you need, to whether it is a rush job or can be spread over the course of months. We’ve outlined a number of factors to help you realistically assess costs.

The Project Management Triangle

We all wish our project were the perfect project management triangle: well funded, with ample

resources, a reasonable time frame, and incorporating all the components we want and the quality we need.

But more often than not, we’ll have to

make choices since the perfect project

management triangle is a rare unicorn. Why does the project management triangle matter when thinking about consulting? Time (schedule) Scope (components, quality) Cost (resources, budget)

It matters because how your project management triangle looks will have implications on your consulting costs.

Consultants can help solve problems with your project management triangle. For instance, if you have a fixed, tight time frame and a high visibility project that demands very high quality, you can hire consultants to take the lead on the project, working with your staff.

Conversely, if you have a tight budget but a flexible schedule, you may not be able to afford a consultant but you could have staff chip away at the project over time.

Below we’ve outlined the three “imperfect” triangles and key considerations for each.

Cost You don’t have flexibility in resources or budget You may need to reconsider certain components, be flexible on quality (scope) and/or extend your schedule (time).

Scope

Time You don’t have flexibility in deliverables or quality Time You may need to increase your budget or staffing / consulting (cost) and/or extend your schedule (time).

You don’t have flexibility in timing You may need to reconsider certain components, be flexible on quality (scope) and/or increase your budget / staffing or consulting (cost). A note about rush or emergency projects, be prepared that they can more than double the costs depending on the timing and scope.

Type of Project and Level of Experience

Not surprisingly, projects that require less expertise will be less expensive than those that are highly technical or require a level of subject matter expertise. Most consultants have tiered pricing so a communication consultant will likely charge less for copy writing than for strategic planning. However, very experienced consultants will obviously be more expensive than younger, less experienced consultants. So unless the copy writing is for something extremely visible and critical to your organization's success, it probably makes sense to hire a consultant with less experience.

Critically look at your project to determine the level of experience you need; your answer should inform your budget. Look at the chart on page 12 to help you understand what experience is best for your project.

Negotiating Costs

There are several ways to negotiate the costs of a consulting project but the two most common are: rate and scope.

Thinking about rate When negotiating rate, you can see whether your consulting firm can staff more junior consultants for less critical pieces of a project thereby lowering the hourly rate.

But remember, more junior means less experienced and may translate into a less streamlined process than if working with a seasoned consultant. You’ll still get a fine work product but you may need to be a bit more patient with junior consultants.

You can also ask for a discount, but be realistic about your request. Remember, consultants are not like employees who get a salary plus benefits. They pay for insurance, retirement investing, vacation and holiday pay, etc. out of their own pocket. So, what may seem like a high hourly rate is probably very reasonable when factoring in all the benefits you enjoy as an employee.

Additionally, rates are based on expertise. If you need the best on your project, you should be prepared to pay more. Think about value, not just cost.

Thinking about scope Another way to trim the budget is to trim the scope. For example, if you wanted three infographics and two PSAs, consider trimming down to two infographics and one PSA. But if you decide to reign in the scope of a project, take care not to “scope creep” midway through the project. Most experienced consultants know exactly how long it takes them to do different activities and have detailed “LOE” (level of effort) charts to accurately bid on projects. When you add to the scope, you’re adding to the hours a consultant is putting into the project – which increases costs.

A note of caution with negotiating scope – it’s not always feasible to add back in “trimmed” items later. Experienced, in-demand consultants are careful to schedule projects based on the original bid. When you change course midway through, your consultant may not have the bandwidth to give more than originally contracted to the project. So think through any cuts to the scope carefully before making them.

Helpful Hints for Budgeting

Be realistic: Consultants can’t (always) meet all expectations if a project is underfunded or has a short time line. Determine your must have’s vs. your nice to haves.

Define the scope of work: Be clear exactly what your goals and objectives are. Your consultant may be able to provide cost effective suggestions that get you similar results.

Take the long view: Look across the lifespan of the project to determine the real costs — both from a resource and financial standpoint. If you do a project in-house would you need to hire new staff? Or reallocate efforts from other projects? You may find the budget is much more attractive than the alternative which could help you advocate for increased funding.

Integrate! Work with a consultant who understands how to integrate deliverables across projects. This value-driven approach is not only costeffective but may allow you to allocate funding from other pots of money if deliverables will benefit that cost center.

Develop a relationship: It’s not only better for you, as you get a consultant that deeply understands your work and culture, it’s better for the consultant since they will get repeat work without having to do significant business development which takes time. If a consultant has multiple projects with a client, they will be more likely – and more able – to negotiate discounts.

Preparing for Success

In order to tee your project up for success, make sure you (and your consultant) follow these best practices.

1. Talk with your team. Identify which team members and key stakeholders should be part of the conversation. Have the conversation early in the process to get their insights on the problem, consider potential solutions, and determine who will work with the consultant and how.

2. Share background information about your industry, organization, and project. Having this context helps the consultant develop a strong foundation for the project and focus their energies on building upon existing evidence and lessons learned. What is shared depends on the project but may include:

• Organizational documents (strategic plans, branding guidelines, etc.) • Key communication materials (annual reports, program brochures, etc.) • Project documents (logic model, evaluation report, etc) • Other relevant research or reports on the issue or constituents

3. Have a kick off meeting. It is critical to make sure the consultant, project lead, and other key staff are on the same page regarding expected roles, responsibilities, and outcomes. Carefully review milestones and deliverables, and agree on the process for working together and making decisions. Ensure all players have a shared set of expectations. This can also be an opportunity to share background and context, including any considerations or limitations to keep in mind.

4. Develop a work plan that all stakeholders agree upon. As a first order of business, your consultant should draft a work plan based on the launch meeting to be reviewed and approved by the project team and other key staff. This document should clearly articulate the project goals, outcomes, and deliverables as well as detail key tasks, roles, and time line. While the time line may need to be adjusted as the project gets underway, it is important to work closely with the consultant to develop a work plan that is realistic and meets your needs.

5. Incorporate ways to evaluate the success of the project (regardless on the type of project). This can help validate new ways of doing things, demonstrate value of the investment, and identify opportunities.

6. Communicate openly, honestly, and often. Provide clear direction during the launch meeting and honest feedback on the work plan. Sharing any possible barriers or limitations up front will build trust, and help the consultant to better mitigate challenges and/or delays. Set a schedule for regular check-ins between the project lead and consultant to share progress updates and discuss any challenges. For larger, longer term projects ask your consultant to provide a monthly dashboard you can share with leaders and stakeholders to keep them up to date, engaged, and supportive of the project.

7. Identify a clear process. Have answers to the following: • Who is the primary point of contact? • What is the internal review and clearance process? • What is the process for billing? • How should the consultant engage any outside partners?

8. Document the project. Ensure your consultant writes up a final report and presentation. Of particular importance is documenting lessons learned, recommendations, and opportunities for organizational capacity development. Use the project to build the institutional knowledge of your organization.

Not clearly describing the project: If you’re not clear on the project, your consultant won’t be either. As a result, you likely won’t be satisfied. Take the time up front to be clear on what the project is...and what it isn’t. 10 Mistakes to Avoid When Hiring Consultants 1

Not confirming the consultant’s availability: It’s not uncommon for an organization to issue an RFP with a clear start date and term but then for a myriad of reasons award the contract weeks or months later. If you’re behind schedule, let potential consultants know. It’s both respectful, and can save you time and effort in conducting due diligence on a consultant that is no longer available. 2

Not getting the proper documents in place: Any consultant worth her salt won’t start work without a contract in place. But there are other documents that you may want, or your organization requires. Most consultants have no problem signing an NDA but many will not sign a “non-compete.” Confirm with the consultant that she is willing to sign any necessary documents. Get them all signed and countersigned before the kick off meeting. 3

Not integrating the consultant in your team: A good consultant will want to collaborate with your team and gain insights from their experience. Set the project up for success with a kick off meeting, a point of contact, and a way to integrate the consultant into your team where appropriate. Not having clear roles and responsibilities: Your consultant and your team risk tripping over each other, or leaving gaps in the project if the roles and responsibilities are not clearly laid out for everyone. Outline these at the kick off meeting with everyone at the table so they all hear the same thing at the same time. Not understanding the contract components, including the deliverable review process: Be clear on what the contract does and does not allow. Specifically, make sure you understand the deliverables review process. Confirm how many rounds of revision are included so you can plan accordingly and not incur additional charges. 4 5 6

Not understanding the consultant’s role: A consultant’s role is defined by the scope of work and contract. Some organizations solicit the consultant’s insight on projects outside the scope of work or ask them to take on additional work. Don’t put your consultant in the awkward position of having to draw boundaries. Waiting too long to enlist a consultant’s help: One of the most common mistakes is waiting until a project is off track and in trouble before engaging a consultant. Not only will there be limitations to how well a consultant can fix the problem, but it will likely be costly. It’s far more effective and efficient to bring a consultant in from the beginning. Being enticed by low bids: Price conscious organizations may find the lowest bid the most attractive. But look closely – are the bids comparable? Are the consultants similarly qualified? Don’t put yourself in the position where you saved initially but either don’t get the job done, or done well. Conversely, carefully examine bids much higher than all the others – do you need all the bells and whistles in the bid? Is the bid competitively priced? Choosing a consultant that never says “NO”: No one likes to hear “NO”, but sometimes it is the best answer. Don’t hire a “yes” person. It will affect the quality of your project. 7 8 9 10

Use our “understanding your needs” worksheet help your team get clarity on your project and needs. Tools and resources can be found at the end of this book.