Articles By John Smith

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Management consultants – how they get paid.

There was a time when all management consultancy assignments were paid for on a time basis plus costs. It did make selling jobs difficult and for that reason it would be normal to suggest an initial short, sharp project with restricted terms of reference. This was done on the “puppy dog” principle that when you get to know us, you will love us. Once, I created a record for Price Waterhouse by doing 19 separate assignments for the same client

Times are changing. Latest statistics show that whilst 50% of all work is still on a time-charge basis, 40% of projects are set at a fixed-price. Clearly this moves some risk to the consultancy firm. What is significant is that the remaining 10% (and growing rapidly) of jobs are charged on a risk-reward or a payment-by-results basis. Two of the most prestigious (and secretive) firms, both American, do most of their work this way. From a management standpoint, this risk basis holds much attraction

Reasons to employ a management consultant

The good, the bad and the ugly

The good reason to employ a professional firm of management consultants is to get an independent recommendation on how to address a specific problem. The absolute essentials are
• Agreeing defined and understood terms of reference for a study
• Vetting the actual consultant/s put forward by the firm
• Exerting no influence on the study and mandating all affected managers to cooperate fully

The bad reason is to fill a gap in management talent. If an insider can do the job and that person is missing, then employ him/her

The ugly reason is to substantiate a decision already taken.

Nine steps to use a management consultant effectively >>>>

Read About My Life As A Management Consultant