How to Hire a Business Consultant
Posted on May 12, 2009 in Featured-writers
By Tom Boyd
What is it that everybody needs but nobody wants? What is it that is priceless to some and worthless to others? What is it that is that describes an unemployed businessperson?
Answer: A Business Consultant
For over thirty years, I have seen health care organizations hire business consultants and have often wondered on what basis the consultant was hired. Various reasons appear to have included; golf, drinking buddies, mutual friends and receptive to sales pitch. Little, if any, importance seemed to be given to references, the consultant's experience and education, professional associations and certifications nor the "minor" aspects of code of ethics and mission statement.
Most organizations spend more time in selecting their office furniture, than in selecting their consultants and often with better results. Perhaps the personal aspect of hiring a consultant makes it a more difficult task.
As a Medicare intermediary auditor and as a financial consultant; I saw organizations spend $5,000 or more a month on "accountants" at &25 an hour (200 hours), for poor work that could have been done in 20 hours and cost $2,000 to pay a professional accountant or firm at $100 an hour.
I saw organizations hire CPSs and MBAs without the hired consultant being able to inform them when and where they obtained the designation.
I saw organizations hire consultants simply because of the location of their office or the nationality of the consultant.
I had a client hire me because of the weird tie I wore at a NAHC presentation. While a good decision for his organization, personality and mutual association were the major factors in his decision.
I advocate that organizations should adopt a simple priority matrix approach to the hiring of consultants that would remove some of the personal aspects and give weight to other important factors.
What factors should be considered in the hiring process?
References: Current clients, associations, your peers consultant's peers and past clients.
Sure, it is likely that a current client will give a good reference, however check that you are comparing "apples to apples". If you have a defined need, like starting an IV Therapy company for example, check that the reference supplied to you had done a similar assignment. With larger firms, you need to check that the reference relates to the person that will be handling your assignment. The other references should be checked, as much as may be possible, to also get a feel about the consultant's reputation.
Knowledge: Experience, education, professional organizations, certifications, trade associations.
Is the consultant's prior experience useful to the considered assignment? Consider education and certifications as factors that can show a consultant willing and eager to learn more to help them and you. In addition, would you not want a consultant who is a member of their professional organizations and your trade associations? The memberships indicate someone who desires to maintain and increase their professional education and may share your mutual goals for the industry.
Organization: Firm size, web site, mission statement, code of ethics, availability, location, personality.
If you are considering hiring a firm with many employees then an important aspect is the evaluation of the person or persons doing the actual assignment. You are also evaluating the organization. Do they have a mission statement and a code of ethics? Is the consultant's location of any importance to you? The consultant's timely availability is importance to most assignments.
The consultant's web site can tell you about the firm's employees and their background. It can also tell you if their expertise includes the services that you are interested in obtaining.
Personality is the #1 factor for most people in their current hiring practices. While important, it needs to be placed within the context of the consultant's assignment. If you installing a new accounting system, for example, the consultant's interaction with you as the CEO may be less important than their interaction with your CFO and the accounting staff.
Priorities: Importance, weighting, matrix
Once you have evaluated the factors above you need to determine their relative importance to your decision determination. The use of a priority matrix can be helpful.
An example: Project A is the consideration of hiring a clinical consultant firm to educate clinical staff about the revised PPS system.
Firm #1 has its biggest advantage in costs and location. Given the nature of the assignment they may closer to the hiring organization and cheaper for the assignment.
An example, Project B, is the consideration of hiring an interim CFO while the organization engages in an executive search for a new CFO.
In this example, Firm #3 has a slight advantage due to their better location and belonging to associations. If more than one person is doing the interviewing or taking part in the selection process, then the organization will need to have a common matrix to be used by all.
Processes: RFP, contracts, scope of work, WIP, deadlines, money
As part of the process the question arises, how many consultants do you interview for the assignment? I recommend no less than 3 and no more than 5 unless using an RFP. A RFP is a request for proposal and is usually an open or general call to receive proposals from the consulting community for the organization's specific project. A RFP is recommended for more expensive projects, IT conversions for example, and where the project can be clearly defined and does not require immediate completion. The project timeline needs to allow for writing the RFP, the RFP being sent out to the consulting community, and receiving and evaluating responses. A consultant agreement should be a written contract with scpe of work, interim timelines, deadlines, and fees, including treatment of travel and support costs, clearly stated.
Having presented a logical approach to the hiring of a business consultant, I have one last recommendation to deal with "ties" or the inability to decide between two consultants. Flip a coin and while the coin is in the air your mind will become clear on whom you wish to hire, as your sense of "personality" will become a tiebreaker. Personality or compatibility my still be the most important single factor in the hiring of a consultant. It should not be the only factor.
Copyright © 2009-2010 Boyd and Nicholas, Inc. All rights reserved.
A highly respected member of the home care community, Tom Boyd is a nationally recognized expert in the field of home health and Medicare reimbursement. Mr. Boyd is one of two principals at Boyd & Nicholas, a leading financial consulting firm serving home health and hospice organizations nationally. With expertise in cost report preparation, financial analysis, due diligence, accounting, and more, Mr. Boyd contributes his knowledge to industry conferences, associations and publications. Prior to founding Boyd & Nicholas, Mr.Boyd served as an intermediary auditor for more than eleven years and worked for another national consulting firm from 1989 to 1993. He has a BA in Management/Accounting from Sonoma State University and a MBA in Business Administration from St. Mary's College. He is a member of the HHFMA Workgroup, the Association of Certified Fraud Examiners and the U.S. Chess Federation.
For more on Boyd and Nicholas, Inc., go to www.boydandnicholas.com.
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