“I’m not sure if there is anything that can be measured, and how it’s done.” “How do you measure the success of a consultant?” “Do they need to make money? Do they have to save their client more than what they charge them? What about hours worked?” These are all great questions.
Do what I say, not what I do.
As consultants repeatedly emphasize to their clients, the only way to demonstrate your worth is to bring the proof, the data. Unfortunately, however, they do not apply that sound principle to their own shops. As a result, management consulting has always been somewhat of an informal business when it comes to measuring and proving its own impact.
Daniel McGinn, a senior editor at Harvard Business Review, described consulting as a “black box” in the magazine’s September 2013 issue. And, because there is no widely accepted, objective methodology for measuring consulting, management consulting firms that attempt to create measures are inventing their own recipe.
The volume of sales and re-sales per consultant is how most firms measure their performance. As a result, partners are encouraged to generate more revenue and complete projects that, rather than fully meeting the client’s needs at the outset, lead to additional projects without necessarily cultivating good long-term relationships with the clients.
Then there are the Attila-the-Hun consultants, who pursue a scorched-earth policy, extracting as much revenue as possible from the client as quickly as possible and then moving on to the next target while being handsomely compensated for it.
Some businesses attempt a cross-partner evaluation, in which a partner surveys a colleague’s clients to determine their level of satisfaction. As a result, the evaluator frequently returns a favorable report on the colleague’s performance in the hopes of being included in the colleague’s next big project.
Furthermore, many consulting firms are structured as partnerships, promoting individualistic and short-term thinking that is detrimental to long-term relationships, specialized expertise, and teamwork.
The key dimensions of consulting performance
Although production in management consulting appears to be primarily intangible, some dimensions can still be measured based on client expectations. These dimensions are as follows:
- Commercial Approach. Was your proposal convincing to the client? What is your elevator pitch? Was your proposal in line with the expectations of the client?
- Relationship. How well do your consultants interact with clients and their teams? What is your company’s image in the eyes of its customers? Collegial? Honest? Trustworthy?
- Expertise. How does the client perceive your knowledge? What were their hopes and dreams?
- Posture for delivery. What is the client’s opinion of your posture? Are you accessible? Flexible?
- Project management. How did you fare on the classic triad of scope, time, and cost?
- Impact. What was the impact of your work on your client’s organization in terms of savings, ROI, change, and so on?
- Customer satisfaction. Is the client satisfied with your company overall?
Measure where you stand
However, evaluation should not end there. You must evaluate performance at the appropriate level of granularity. Assessing the company’s overall performance will not allow you to identify the partners’ blind spots or surface best practices. Going down to the consultant level will be difficult to organize (and thus expensive) in exchange for little added value.
Furthermore, suppose you are evaluated using the same criteria as similar organizations that provide the same range of services. In that case, you will be able to benchmark yourself both internally and against the competition. Such benchmarking is priceless when it comes to setting a company’s position and strategy.
Sometimes you want t hire a third-party agency to conduct the evaluations for you. So you may get honest feedback from clients, a fair review of your partners, and realistic comparisons with competitors with objectivity and anonymity.
Knowledge leads to understanding.
After you’ve measured all of the relevant dimensions, you’ll have a plethora of inputs that your company can use to:
- Understand. Understanding your client’s expectations and whether your work met their needs is essential for the business. Client expectations, such as a specific type of expertise, can be explicit at times. However, they can also be implicit expectations, such as your trustworthiness, ethical behavior, or active listening. The ability to zero in on those implicit and explicit expectations provides a significant competitive advantage.
- Strategize. Evaluation will provide you with a better understanding of your strengths and weaknesses and assist you in determining the effectiveness of your value proposition and strategy. You can also assess your performance in each of the different markets you serve.
- Learn. Identifying best practices and capitalizing on experience can help to stimulate innovation. Evaluation can also assist you in determining the blind spots of your partners and gaining a better understanding of your firm’s ecosystem.
- Improve. The assessment also provides a better understanding of how you perform in each of your process’s different steps: matching the right partner or team with the project, the proposal, delivery posture, project management, team composition, and impact. You now have the keys to enhancing the dimensions that are important to your clients.
- Manage. Knowing your clients’ specific needs allows you to constantly improve your performance, create better offerings and teams, and increase your success rate. In addition, however, evaluation can be a valuable tool for talent management, providing valuable insights into your employees and allowing you to manage better their development and compensation in an industry where attracting and retaining talent is critical.
Closing thoughts
When used correctly, performance evaluation can help you capitalize on your strengths while mitigating your weaknesses. And it may be less challenging to implement than you think.
Why?
- It is entirely free. The cost of evaluating a client engagement is a negligible percentage of the revenue generated by the engagement.
- It is already present. Your client has already evaluated you (informally), and they are familiar with evaluation processes.
- Consider the return on investment. Your return on investment is highly favorable.
An objective evaluation can help you build your reputation, increase your credibility, strengthen your relationships with current clients, and expand your portfolio.
In a nutshell, evaluating your performance allows you to ensure a certain level of performance, build loyalty, and increase your success rate.
So, what are you holding out for?
