Management consultants in sensible idea shock!

I attended my first meeting the other day of the Consultancy Sourcerers Group.  It's run by Alan Gotto, a very experienced and genuinely expert buyer of professional services. He also runs Constellia, a consultancy that focuses on buying consultancy... if you see what I mean...

Anyway, this event was well attended by about 40 people, almost all consultancy category managers and buyers.  It was hosted (decent wine, excellent but very dainty nibbles...), by one of the top strategic consulting firms  who presented on the topic of performance-related payment for consultants.  They have a specific goal to make more of their revenue linked to performance which seems a very admirable objective; they are already achieving that linkage on around half their assignments.

Of course, (and this is a topic Fiona Czerniawska* and I discuss in detail in our book) it is often difficult to define and measure clear deliverables for consulting projects.  And if you can't do that, it is hard to define payment by results.  So while this firm looks to use deliverables or even clear savings outcomes wherever possible, their most frequently used measure of performance is a pretty simple one - customer satisfaction.  They are often putting up to 20% of their fees at risk based on a simple client questionnaire, with half a dozen questions.  If they don't score at least "satisfactory", then they forfeit that element of their fees. Now, we might be cynical and argue that "satisfactory" is a fairly easy target; but it's better than nothing and I'm sure there are many firms who wouldn't want to put their return on the line like this - so credit to them for taking this step.

So if your consulting provider tells you that performance related fees are "too complicated", you might want to refer to this.  The mechanisms don't have to be complex.  And if you're interested in joining the Consultancy Sourcerers Group,  contact Alan at alan.gotto@constellia.com.

* If you are interested in this category area, don't forget the Source for Consulting website, which is a very useful resource for consultancy buyers, and includes Fiona's blog.

First Voice

  1. Jane Smith:

    Consultancy sourcerers-not just smoke and mirrors!

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