Buying Professional Services – In Praise of Relationships

Earlier this month, we had a comment from “RJ” on one of our “Buying Complex Services” articles (this month’s Spend Matters “hop topic.” ) He said this in terms of the value of relationships in the professional services world: “Yet professional services are totally dependent upon the knowledge and skill of the individuals that deliver them. We may be rightfully suspicious of relationships built on golf courses but a service provider who develops a deep understanding of their clients’ organisation, culture and, yes, the personal drivers of the senior execs can often offer better quality solutions, faster than a fresh-faced grad who only sees the theoretical approach.

I hope that one of the future features in this series will therefore try to tackle the tough issue of how to identify and differentiate these areas of cultural alignment and the value of relationships.”

So, we thought, who better to answer that than Fiona Czerniawska – my co-author of “Buying Professional Services – how to get value for money from consultants and other professional services providers.” She is a guru of the management consulting world, having written several books, and is now a Director of Source for Consulting, who carry out research and advisory work in the consulting space. Here is her take on the thorny issue of relationships.

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Fiona CzerniawskaIt’s a dirty word in procurement circles: having a relationship with a supplier smacks of murky deals, backroom bargaining and – above all – buyers who feel a sense of obligation to the people trying to sell them something.  But are relationships always wrong?

If you speak to the end-users of consulting services, then you get a different picture.  True, they’re as reluctant to use the R-word as any procurement manager, but they also recognise the value of continuity – working with people who understand how their organisation works and who can, when the occasion demands, leverage their relationships with other people there to help make things happen.  Chemistry is important, too: at its heart, consulting involves people working with other people and not getting on with them can severely compromise the quality of the final deliverables.

So what’s a procurement manager, intent on ensuring fairness and transparency, to do?

Relationships don’t – or shouldn’t – be synonymous with loyalty (and, interestingly, most end users would never use the L-word either, even if lots of consulting firms would).  You can have a perfectly good relationship in business without it crossing the line into dependency.  Similarly, you need to be clear that the relationship is with the person: it’s when your end users start talking about their relationship with a firm that you need to worry.

The key here is clarity.  Discuss with internal stakeholders the benefits a good relationship will bring them: keeping the same person or people throughout a project; being able to access the broader know-how of a firm on an informal basis; having a chance to debate new ideas and issues without the meter starting to run. Consulting firms put all that together and call it account management – it’s the investment they’re prepared to make in an organisation in the hope that it gives them the knowledge and contacts to be well-positioned for future work.  But what’s to stop you turning that to your advantage and making it clear what you’d like account management to deliver for your organisation?

You could also include in your selection criteria a proposed consulting team’s likely ability to work effectively alongside people in your own organisation.  “Buying consulting has become a process,” said one senior executive we interviewed.  “We shouldn’t forget that judgement plays a role: you have to be confident that the consultants you have on project are people you trust to take decisions in the face of unexpected challenges.”

So buyers of professional services need to look at the "relationships" issue as a potential positive, and include it in selection and management decisions, rather than simply assuming that it means trouble for their organisations.

 

First Voice

  1. I an Heptinstall:

    Good points Fiona – individuals do business, whatever the rules or procedures say.  I don’t see how you can manage value and performance if procurement doesn’t accept this and work with it. Many processes that I see seem to take the opposite approach – if we ignore the people aspects they will go away.  This is not only the case with complex services it applies to most spend.

    Skilled people don’t come in easily measurable sizes, and processes based on “lowest price technically acceptable” bids have great difficulties when complex services are involved. There is nothing wrong with buying becoming a process…so long as the process embeds the required judgement and qualitative assessments needed. Anyone who wants a simple process and certainty is in the wrong profession.

    I beg to differ on one point you make though. I don’t see the problem having a relationship with the supplying firm. The buyer also needs “account management” – an actively managed firm-firm relationship. It has to be more than independent person-person relationships.  Strong person-person relationships that are not part of a procurement-led, agreed supplier relationship plan should be a worry.

    Most consultancy spend is not buying individuals, it is buying a service from a company, and should include things like active part-time support to the people working with you (eg management & specialists), the ability to flex the team size, quality control, back-up resources, and the ability to get different perspectives from a range of people. You need confidence that all that is in place and available when you need it, and that means the relationships need to go beyond the few people who happen to be working on your project.

    When I buy professional services from a firm I want some continuity and familiarity, but also fresh faces and input. I dont want to see the same people all the time, and I want to know that their senior management is engaged – or at least aware of us!

    Otherwise you may as well go directly to the individuals rather than a firm.  Not necessarily a bad thing, but maybe a different topic.

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