3 Keys to Managing Your Consultants

4 Minute Read
Posted by Randy Eickhoff on Oct 14, 2011 10:13:00 AM

Randy_Eickhoff, President,_Acena_ConsultingIn our last blog, we talked about the differences between a vendor relationship and a partner relationship when working with outsourced service providers (click here to read). Our blog was aimed at these relationships for CPA firms.

This week, we are taking a different angle on a similar subject; companies hiring and managing consultants.

Why hire an expert and then not give them the flexibility to provide the information and results you expect?

Acena Consulting was built on a premise that strong lasting relationship that are based upon integrity, results, and a reasonable price would result in a respected, strong partnership; so far, that vision is paying off. At the same time, we all encounter relationships where we are providing a product or service and the relationship feels and acts more like a vendor relationship that one that is collaborative and partner-oriented.

A Question of Trust

Hiring a consultant or expert can come with some fear and concern. Depending upon the area of expertise, the expert may need to ask very intimate questions related to your business including revenues, growth, profitability, legal issues, personnel, etc. If the area is one that you know little about, understanding why the information might be needed as well as the expert’s credibility are things that can keep you up at night. It comes down to trust.

Are they going to bring the expertise to the table that we expect?

Will they view our business as if it were their own?

Will the keep us informed throughout the process?

What happens if their work is subject to audit? Will they be able to defend it successfully?

Can I trust their confidentiality?

Today, we will look at 3 Keys to successfully managing consultants (or experts) that will provide a foundation for evaluating and growing future relationships for your company.

Vendor versus Partner – Setting Expectations

Perceptions are often reality and while all companies have vendors for various services, the larger, more complicated services require a different approach. Does the relationship act and feel like a partnership working toward a common goal? Is the communication between you and the expert collaborative or directive? Communications are many times part of the solution and understanding the expectations is critical. Does the expert bring ideas or opportunities you haven’t considered to the table that are beneficial to you? Within an area of expertise, the expert should have ideas that are new and different, otherwise, what value are they bringing to the table?

Referral or Reference?

Most consultants and experts have references that they can provide. If they can’t, there should be a good reason. Even experts that work in very specific and confidential areas should be able to ask a good client for a reference when then need to. Can you reference them through a friend, professional contact or third party exclusive of a name they provide to you? If you can, do you know what the expert’s relationship is with the third party? In some cases, a financial relationship is present between professional associations for referrals to specific experts. This doesn’t mean the expert isn’t a good individual or firm for you to work with; you should simply know the history behind the relationship.

Measuring Success

How will you measure success? While setting expectations is an important part of the process, knowing how “success” will be measured should be both discussed and documented early in the relationship and revisited periodically to assess and adjust as necessary.

Many times, we are asked to meet with a company to evaluate their R&D tax credit, IC DISC or other tax incentive potential. We have, on many occasions, advised the company that the benefits they might expect from taking advantage of a specific tax incentive may not be worth the effort. In the end, it is their decision to either move forward or not but should do so with all relevant facts and expectations documented prior to moving forward.

You can probably think through current relationships and categorize them as either partner or vendor-based relationships on a simple metric such as communication or results or other metric (or lack thereof).

Vendor or Partner? A short survey

We have developed a short survey to assess how companies are looking at and perceiving their relationships with experts they use to help them drive their business goals. I hope you will take a few moments and complete the survey. We will be posting the results in a few months, once we have received a reasonable response. As always, your comments or experiences are welcome in the comments section below.

Randy Eickhoff, CPA is President of Acena Consulting. With more than 20 years of tax and consulting experience, Randy focused on helping companies successfully document and secure tax incentives throughout the US. He has been a long-time speaker nationally as well as conducted numerous training sessions on R&D tax credits and other US tax incentives.

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