The right way for Government to consult consultants

by Andrew Rogoyski
It’s time for the public sector to think differently about how it uses consultants. This change is vital if consultants are going to make the contribution they should be making to current Government objectives in terms of providing value for money for taxpayers, streamlining the public sector and generally running the country more efficiently. Above all, Government needs to spend less time commissioning reports from consultants and more time thinking about just what it wants consultants to do for them, not only in a practical sense but also at a strategic level. In today’s rigorous Government climate, the public sector has set itself the objectives of delivering services more quickly, giving better value for money to those it serves, and increasing overall agility (ie. its capacity to respond to change). In this climate, where the public sector is striving for new efficiencies and for reduced costs, it is all too common for the Government to develop a split personality as far as its attitude to consultants is concerned. On the one hand, Government is aware that consultants can offer in-depth expertise and value for money. On the other hand, Government, by definition, contains politically-minded people, and many of these people baulk at the idea of a consultant earning in a day (or at least his or her consultancy charging out) more money than many Government employees earn in a week. Consultants are for many politicians the equivalent of a sitting duck. Whenever the debate starts

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focusing around what Government are spending on consultants, you can be pretty sure that all most, if not all, the emphasis will be on the sums of money involved and very little on the benefits derived from the expenditure. If the discussion does tend to focus on cost issues, that’s usually because of the way many public sector organisations use consultants and the type of consultants they actually hire. The simple fact is that Government is too willing to engage consultancies not for the in-depth quality of the work and thinking the consultancy can offer but simply as convenient manpower substitutes. In many cases - not all cases but certainly a high proportion of them - using consultants in this way is simply irresponsible on the part of the public sector. It may also stem from laziness; after all, hiring a manpower substitution consultancy can be a lot easier than really looking hard at the problem that needs to be addressed and finding cunning ways of solving it without spending a small fortune. What does the public sector really need from consultants? What it really needs is something it all too often doesn’t actually get: genuine skills transfer deriving from relatively short-term projects that don’t use dozens or hundreds of consultants but use the right consultants to get the job done. And skills transfer means precisely that: at the end of the day the skills the consultants should be embedded in the minds, and ideally also in the processes, of the public sector organisation. What kind of consultancies can offer this type of skills transfer and service? I don’t think it’s a question of size. Some smaller consultancies are good at it: so are some larger consultancies. It’s more a question of

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attitude. The questions a public sector body really needs to ask, and answer, when it is contemplating hiring a consultant are:

what it is I really need to get done?

This question will by no means necessarily be easy to answer. But you do need to ask it, and to get maximum benefit out of asking it, you need to think hard about the type of answer you need. Why? Because a crucial distinction to make here is between hiring consultants to effect some key change related to a vital strategic objective, and hiring consultants simply to carry out a job that you could do yourselves if you had the manpower. This latter use of consultants is merely manpower substitution, whereas the former use of a consultant really would effect a lasting and major change that would go well beyond mere manpower substitution. It’s like the difference between an army commander preparing for a big battle by doing some good hard strategic thinking about how to overcome the enemy’s strategic or logistical weaknesses, or simply hiring a bunch of mercenaries to do some fighting. Consider, for example, a local council that hires an external copywriter to draft a newsletter that communicates details of the council’s aims, facilities and amenities to the people it served. If this is work that needs to be undertaken week in, week out, it would be more effective for the company to hire a permanent writer; hiring an external copywriter merely to write the copy would be mere manpower substitution. But on the other hand, if the external copywriter were to add new ideas to the newsletter, help to redesign it to make it a more effective

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communication tool, teach the staff in the council’s communication department to write more compellingly, and introduce in-depth innovations that make the communications department more effective in every way, then this would be a good example of using an external consultant (which is what the copywriter would in effect become in carrying out this role) to effect major and lasting change. The strategic use of consultants is bound to be more cost-effective in the long run, because active strategic change will (or should) result from it. When you need these fresh strategic ideas, or need objective advice or assessment, or honestly do not have the skills or experience you need, and if there is a clear set of objectives for the work, it makes sense to hire a consultancy. Seek consultants that can offer genuine strategic insight and thought leadership. After all, isn’t that what a consultant really is? Also, think twice about hiring a consultancy unless there are people in your own organisation who can learn from the consultants and, after the consultants have finished their mandate and departed, can take over what the consultants were doing. Too often there is nobody on the government side to be the recipient of skills transfer. By the way, if the real reason you want to hire the consultancy is that you want a third party to blame if things go wrong, you probably need to do some honest thinking about whether the fundamental design of your project needs looking at even before you begin working on it. Having decided that you want to appoint a consultancy and are doing so for the right reasons, how do you decide which particular consultancy is likely to be best for you? The following guidelines are all vitally important:

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 aim to choose a consultancy that seems to you a good cultural fit to your organisation. After all, you need to work with them!  press candidate consultancies hard on guaranteeing that you will get the people who were sold to you, rather than the ‘B’ team which all too often creeps out of the woodwork after the job is won  make sure that the consultants who work on your project have individual, personal incentives to get the project completed to time and on budget  recognise what achieved outputs from using the consultancy will have to constitute ‘value’ for the your department. ‘Value’ is, in principle, a vague and even meaningless term. You need to decide on some concrete and measurable target that will constitute ‘value’. Doing this is not only essential to you, but will also be welcomed by any consultancy worth its salt, which will enjoy knowing what they have to achieve for you to keep you happy.  don’t automatically award work to the cheapest compliant bid. Government departments might do well to expose budgets for work and let industry compete on the basis of what they can offer for the budget, i.e. the best value for money instead of the lowest price;  don’t award work to consultancies that consistently underperform. Government departments and other public sector organisations are usually in principle able to examine the track record of a company, but in practice they rarely do. Too often Government bodies have no

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‘corporate memory’ although they’re getting better recently by taking up references. Good advice would be to monitor the press (management journals as well as the business pages) and watch for news on consultancies that end up having fights with their clients.

 make sure you have realistic price expectations for major programmes. Be averse to penetration pricing (i.e. where a consultancy will deliberately underprice their quotation for a first project to win and then make profits downstream from successive projects.)  be prepared to pay market rates for people of the right calibre

 recognise that contracts need to be managed throughout the lifetime of the contract, not just up until the point that they’re signed. You really do have to remain involved throughout the engagement and monitor the outputs.

As for consultancies, they must genuinely be focused around giving the public sector organisation to which they’re consulting the benefit of transferred knowledge. If they aren’t willing to do this they should consider whether they are really suitable for working with Government at all. Consultancies should also be willing to get in, do the job and get out again. In other words, they should be prepared to get away from the ‘land and expand’ model of engagement, which all too often boils down to the rather less grandiose objective of milking a client for every penny.

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Ultimately, consultants should help make the public sector bodies for which they are working more agile. When consultancies can offer all this to public sector organisations, then they will have staked a real claim to be deserving of the privilege of consulting to Government. And it is a privilege. After all, it’s your country.

Andrew Rogoyski is head of the Government practice at business and IT consultancy Charteris plc. Charteris plc - tel: 020 7600 9199. E: andrew.rogoyski@charteris.com www.charteris.com

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