According to various reputable sources, there are anywhere from 400K-1M+ consultants in the US (see references attributed at end of blog post). The lower number represents the number of independent consultants whereas the larger number represents a cumulative of independent and consultants working for consulting companies.
With so many different consulting options out there, it can be a daunting task to decide on the right consultant for your company and needs. Let’s explore the different types of business consultants and some of the key things that you need to consider as part of your decision process. First a brief disclaimer, I own a management consulting firm for high tech companies focused on improving sales effectiveness. Please recognize that these are the classes of consultants defined from my personal experience.
In this capacity, I have had the pleasure and misfortune of working with many consultants on scores of different client engagements. Additionally, I have been introduced to many consultants that were networking or looking to start their own consulting firm and were looking for advice. I would estimate that I’ve worked with hundreds of different consultants over the years.
Approximately 50% of the 400K independent consultants referenced above are either retired, in between full time jobs or will fail in 1-2 years (see biz week article reference below). That leaves 200K independent consultants that are really consultants or at least to the idea that they are consultants. This blog post will focus on that group.
Now let’s apply the some basic math to stratify into consulting expertise classes:
- The True Strategic Consulting Experts. These are the top 1-2% of consultants that really possess the expertise and strategic depth to qualify as a true expert in a particular area. Why is that? There are so many different sub categories and new/emerging categories these days that it is harder and harder to attain bona fide expert status. These are the class of consultants that can fundamentally change and improve your business model. This rare and valuable group of independent consultants represents approx. 2,000-4,000 total in the US.
- The Solid Tactical Consultants. These are the top 10-20% of consultants that have a decent level of experience and depth to help you. They tend to have broad depth in their experience and can help with you with various tactical projects and needs. These consultants will be transactional in nature and will not bring a lot of innovative thought to the table. Rather, they are strong at tactically executing things that you may need help with or are struggling with. This stratum of independent consultants represents approx. 20,000-40,000 total in the US.
- The Marginal and Mediocre Consultants. These are 25%-80% of consultants that are out there. They talk more than they listen. They don’t ask insightful questions. They don’t know what discovery is. Not surprisingly, they bring little to no insight or value add to the table. Even worse, they are not particularly good at helping you get tactical projects or things done. This group of consultants represents approx. 50,000-160,000 total in the US.
- The True Charlatan Consultants. These are the bottom 10%-20% of consultants out there. They are very dangerous in that they can seriously damage your business if allowed. Many of them have advanced degrees from the best universities in the world. Many of them have impressive looking resumes complete with senior job titles and associated management responsibilities. Many of them will cite being a key cog in a successful company’s rise to success. They talk a good game. They look and sound impressive. They tend to name drop constantly. These are your classic “empty suit” type consultants. Think of them as the unconsciously incompetent (http://en.wikipedia.org/wiki/Four_stages_of_competence). I’m dating myself but this stratum is the “Ted Baxter” from the old Mary Tyler Moore TV show. Brimming with confidence, dresses the part, talks the part but actually is an incompetent boob! This group of bottom feeder consultants represents approx. 20,000-40,000 total in the US.
Now that we’ve stratified and defined at a high level the classes and characteristics of different consultants, how do you qualify, discern and recognize which type they are and what type you need?
Here are some practical consultant type qualification, discovery and discernment tactics that you can take to recognize what kind of consultant type they actually are and what kind you need:
First, you need to determine the nature of the project or work that you need help with. Is this strategic or tactical? The budget that you are willing to invest is a strong barometer of the type of consulting work it really is. Another good indicator is the level and number of people within and outside your organization that the consultant will need to interface with as part of the engagement. Lastly, the tenure of the consulting engagement will help you know whether it is strategic or tactical.
A great way to qualify when you need a true strategic consulting expert is to ask these questions and look for evidence of:
- What level and how many different people do you typically interface with during your engagements? (Get specific job titles and references)
- How long is your typical engagement? What are common strategic goals in your engagements?
- How long have you been consulting? What was your prior domain expertise prior to becoming a consultant?
- How frequently do your engagements involve interfacing with your client’s customers? What levels of customers are you typically interfacing with? (Get specific job titles and references)
- Help me understand your discovery process that is part of your engagement?
- What are the common denominators in your most successful engagements?
- What are the common denominators in your least successful engagements?
Hopefully this may assist you and others in separating the wheat from the chaff consultants. And please remember; beware of the consulting charlatans out there!
(References: Bureau of Labor Statistics (http://www.bls.gov/ooh/business-and-financial/management-analysts.htm) and Business Week article (http://www.businessweek.com/smallbiz/content/may2011/sb2011059_763239.htm#p1)