Management Hiring a Consultant It's critical to know when to seek outside help, but as important is identifying who should advise you By Laura Williams-Tracy

Peace College President Laura Bingham (seated) says the external perspective brought by consultant Randy Coupland of Tatum CFO Partners has helped the college's bottom line

Learn more: Why many MBA students are learning consulting

Independent and self-reliant as they may be, most business owners eventually find they need to hire an outside expert — someone to help promote a new product, to untangle an IT conundrum, to formalize human resources functions or even to strike a bold new direction for management.

One of the nation’s fastest-growing industries, consulting is a broad category that covers everything from strategic management consultants who bill clients in the upper six figures a month to wedding consultants. In short, a consultant is someone in the business of providing advice to firms in trouble, on the move or who are just trying to do things better.

“A lot of people perceive a consultant as someone who comes in, tells you what you need to do and then leaves,” says Mike Womble, a partner with Distinctive Human Resources in Sanford and a member of NCCBI’s Small Business Advisory Board. But good consultants — in any practice area — work to actively integrate themselves into a business. “We see ourselves as ongoing business partners.”

But with the common perception that a consultant is someone who comes in, tells you what to do and then leaves with little change in his wake, how can a business be sure it’s making the right hire? And once the contract is signed, how do you make the relationship work? Here are some guidelines.


Adding to Your Skills Base

If only all client-consultant relationships could as work as well as the partnership between Raleigh’s Peace College and Tatum CFO Partners Inc.

In early 2000, Peace College was in the market to hire a new chief financial officer. President Laura Bingham couldn’t afford downtime in the finance office, but she wanted time to conduct a thorough search.

A college trustee suggested she look for help within Tatum CFOs, an Atlanta-based firm with a presence in Raleigh and Charlotte, that offers a former corporate CFO with at least 20 years of experience who provides financial leadership to organizations on a part-time or full-time basis.

“I called and told them I needed a very smart but benevolent CFO,” says Bingham, who added that she didn’t need a corporate cowboy who might start slashing with an eye only to the bottom line. She worried that it might be hard for a veteran of the corporate world to come to grips with the realities of higher education, where earned revenues never match expenses.

Tatum assigned Randy Coupland, a 27-year financial veteran with experience in entrepreneurial and middle market companies, to a three-month contract.

“He’s still here,” says Bingham, half laughing at the four-year-long relationship that continued long after the CFO position was filled and has expanded well beyond Peace College’s finances to offer Coupland opportunities in student recruiting, financial aid, enrollment planning and measuring the institution’s effectiveness. “He quickly became a wonderful colleague and adviser,” says Bingham. “He had an external view and increasingly an internal view of the college.”

So how can a consultant-client relationship work out so well? When shopping on behalf of Peace College, Bingham says she looked for someone who could increase institutional capacity. “You want someone who is also a builder of others talents,” Bingham says. “I’ve had experiences with other consultants where they view it as their proprietary right not to share knowledge. I’d look to see, ‘Did they leave you better than they found you. Did they take a long view of the organization,’ and not just at the life of their contract.”

John Channon, managing partner of Tatum CFOs in North Carolina, says a four-year-long contract isn’t unusual for Tatum’s partners, who quickly work to become part of the organization, going so far as becoming direct W-2 employees. “We view our relationship with the client as being change agents,” says Channon. “Though a company may have a talented management team, they may not be well-versed in all areas of finance, and that’s where we can make a difference.”

Companies that come around to the decision that they need to hire a consultant usually do so when they realize they don’t have the staff or the expertise to handle an important and necessary function. Often the company in that predicament doesn’t have the need for such expertise full-time.

But companies often stumble when they are deciding between hiring someone full-time or outsourcing the work to a consultant. “Clients need to think about their needs. There is a cost difference between a consultant and an in-house person,” says Sheila Ogle, a member of the NCCBI Small Business Advisory Board and CEO of Media Research Planning Placement Inc., a 16-year-old Cary-based firm that advises companies on where to place their advertisements.

While an in-house employee may be on the job 40 hours a week, that person likely won’t have the same level of expertise or the research resources at hand to offer the same guidance as an established firm, says Ogle. A benefit of hiring a consultant is that you often have a whole team working for you, not just an individual.

Distinctive Human Resources Inc., a Sanford-based firm run by partners Mike Womble and David Siler, helps smaller companies that don’t have and often can’t justify having a HR professional on staff but who need assistance in a wide variety of functional areas of human resources, including compensation and benefits, employee and labor relations, recruitment, health and safety, training and management practices.

With a staff of nine employees who’ve joined the firm over its seven-year-history — and all of whom are certified HR professionals — Distinctive Human Resources is able to offer clients a team with the depth of expertise and knowledge they wouldn’t likely find in a single employee. “You can have working for your organization a firm experienced in all six functional areas of human resources for just a percentage than if you tried to hire someone with the knowledge and experience of all of our folks,” says Womble, who worked for more than 20 years in corporate HR for textiles and electronics companies before becoming a HR consultant.

Distinctive Human Resource’s typical client company has 250 employees and operates in a broad spectrum of industries, from country clubs and automobile dealerships to manufacturers, small community banks and trucking firms.

For some clients, Distinctive Human Resources has staff on-site one day a week or more. “We think hiring a consultant is a less expensive alternative,” Womble says. “A lot of companies don’t need Mike Womble full-time.”


Taking You Into New Markets

But many companies, especially those contemplating a bold new move, find that specific industry experience can be an invaluable resource.

Few consultants can offer the breadth of knowledge of Clark Plexico, former state president for North Carolina for AT&T, and a former state senator from District 29 in Hendersonville, and one-time expatriate who built and sold a successful international real estate firm.

Almost two years ago Plexico set up Clark Plexico Consulting to offer smaller entrepreneurial companies and nonprofits guidance when they are looking for a new business direction, considering expanding internationally or who need help with their public policy agenda and would benefit from guidance through the legislative approval process.

Consulting at its heart involves analyzing a business problem from various angles, forming an understanding of a client’s organization and then recommending a solution and implementing it. “I analyze their business and discover if they have the need that they think they have,” says Plexico. “I look at their priorities and help them get where they want to be.”

Management consulting of that sort weaves into the most critical functions of a business, and can help companies consider the political ramifications of what they are doing and serve as an early warning system to help them navigate the public arena, says Plexico.

Because of his extensive political background, Plexico also is offering leadership training, including training for political hopefuls. “There really is such a thing as legislative excellence,” he says.

As is the case for Clark Plexico Consulting, having experience in a specific industry goes a long way to building a foundation of trust between a company and its newly hired consultant, no matter the consulting area.

Often companies feel a sense of comfort with a firm that has specialized in their field, says Gary Walker, president of Walker Marketing, Advertising and Public Relations Inc. in Concord.

“A lot of times a companies will look for specialization. It helps everyone get down the road a lot quicker,” says Walker, who has been in the marketing and public relations for 24 years and formerly was a partner in the firm Barnhardt Walker & Day before starting his own firm in 2001.

Walker’s firm works with clients in healthcare, food processing and development and within the construction industry.

Walker says specific experience is a way to begin building trust. Building trust is the first step in building the rapport that can keep a client-consultant relationship either just afloat or one that becomes seamless and mutually beneficial. “If we are doing a good job our clients will look at us as trusted advisers. You don’t start in the relationship as that but that’s what you ultimately hope to achieve,” says Walker.

The last thing a consultant, no matter the practice area, wants to be viewed as is a vendor, says Walker.

“I think mutual respect and good rapport make for a good business relationship,” says Ogle, who warns that companies should be wary of consultants who are more excited about showing what they’ve done for others than in hearing about the new needs and problems that are on the table. “I try to go by that old saying, ‘Listen with two ears, talk with one mouth,’ ” she says.

“That’s where a lot of consultants don’t achieve the respect they’d like to because they are trying to sell their point of view when the client may not be interested,” says Walker, who says he knew of one consultant who sent a client a bill after an initial meeting to discuss the client’s needs. “I consider a meeting successful if I have not talked much.”

As part of the trust that must be built between the client and the consultant, consultants in all fields must always keep in mind that clients often have difficulty turning over important parts of their business to individuals outside the organization. “When you hire a consultant they are an extension of your business,” says Ogle. “You should make sure they have the same ethical approach to business as your internal people.”

To keep the relationship on track, Ogle recommends that clients and consultants establish expectations early and agree on how success will be measured in the end of the assignment. Midway through the project, do a temperature check to make sure expectations are being met.

Walker says as the relationship grows and the client’s appreciation for the role of the consultant grows, it’s up to the consultant to educate the client about the need to sustain their business. Consulting roles shouldn’t be viewed as short-term tasks but as critical elements of their business that demand regular attention.

“As consultants we need to be constantly educating our clients, since they aren’t in our business, to the importance of an ongoing effort,” says Walker. Often the budget is the problem, or the company may just consider the consultant a short-term fix. But, Walker says, a long-term approach is more likely to ensure success when someone is looking at those important issues.

The ranks of consultants have grown in recent years as professionals laid off from their positions have hung their own shingle. “Not everyone is cut out for the consulting world,” says human resources expert Womble.

He adds that while many might be knowledgeable, they must also have a genuine interest in the company’s problem. That, along with a combination of expertise and salesmanship, makes the best consultants, he contends. “The consulting business is not the place for introverts,” he says. “You have to have some salesman in you, but it’s got to be genuine.”



Many MBA Students Concentrate on Consulting

Consulting may offer the glamour lifestyle of assignments in fun and exotic new cities, lucrative pay and three-martini lunches. While reality doesn’t always mirror perception, consulting is one of the fastest growing industries in today’s corporate world and one of the most popular career choices for new MBAs.

Many graduate business programs in North Carolina offer students the opportunity to concentrate their education in consulting with plans to work for a national or regional management-consulting firm after graduation.

“For our very bright, hard-charging students, consulting is attractive,” says Frederick Harris, the John B. McKinnon Professor of Economics and Finance at Wake Forest University’s Babcock School of Business.

It’s no surprise that management consulting saw a boom in the 1990s as cash flows grew steadily and companies ventured into new lines of business on the Internet and in other areas. But a new decade put the industry under siege. The recession, corporate scandals and terrorism eroded demand for help with IT projects, human resources initiatives or marketing opportunities.

“The last two years have been a horrible time for consultants. Tough economic times have firms constantly in contraction,” says Kim Westmoreland, assistant dean for the career management center for Wake Forest’s MBA program. But he says the industry appears to be on the rebound, and students attracted to the pace and work variety haven’t shied away from the field.

MBA students with a career concentration in consulting go to work in one of three different areas after graduation, says Harris. The form of consulting that is the most lucrative and also the least affected by ebbs and flows in the economy is strategic management, where consultants help companies make big decisions about broad initiatives in their business — often decisions where the answer can’t wait.

An example might be a bank that hires a consultant such as Booz Allen or McKinsey & Company to consider whether to enter investment banking.

And their advice doesn’t come cheap, Harris says. “I wouldn’t be a bit surprised to see them billing in the upper six figures for a project that goes three months,” says Harris. “A company that can afford that level of advice can afford it in good times and in bad.”

Not surprisingly, consulting positions at that high level aren’t easy to break into. More students join management consulting firms, such as McFadden & Associates and Accenture, to work with smaller companies on project consulting such as how to improve a manufacturing company’s factory floor process design or how to set up Internet banking.

“That business is very cyclical,” says Harris. “Those projects are not pivot points in a strategic direction of a company, and when cash flow slows down that work dries up.”

Still other students who don’t want the travel associated with consulting work often select roles offering strategic planning internally to a company.

“Almost every company with 50 employees to 20,000 employees has some strategic function these days,” says Harris.

At Wake Forest, consulting ranks fourth in popularity among students selecting a career concentration, finishing behind finance, marketing and operations.

“People get the misimpression that you are on a plane every Monday to a new place,” says Harris. But he says most consultants, while usually working outside the town where they live, usually stay on an assignment for about three months with a corporate apartment in the town of the job.

Many students are attracted to the variety of work, which is often not a part of the package for tax accountants. “You get to experience a lot of different businesses and can build expertise that you can’t necessarily do with one company,” says Dan Fogel, dean of Wake Forest’s MBA program in Charlotte

But it’s not all about lunches with clients and glamorous assignments. “I think consulting is a hard gig,” says Fogel. “The payoff may be greater but the risks are also greater.” -- Laura Williams-Tracy