Many of you may have seen the movie Up in the Air where George Clooney plays the role of a high flying consultant that specializes in downsizing. As a former consultant myself, the image is not too far out from reality. But does this mean that location is inconsequential when buying management consulting services? As […]
Many of you may have seen the movie Up in the Air where George Clooney plays the role of a high flying consultant that specializes in downsizing. As a former consultant myself, the image is not too far out from reality.
But does this mean that location is inconsequential when buying management consulting services? As a specialist in strategic sourcing, or the science of purchasing, I beg to differ.
There are two essential factors one should take into account when considering the location of the consultants they expect to hire. The first one is expertise and the second is the degree of intervention.
The term “Expertise” can be used to refer to many things, but in essence it’s mostly a function of how rare the skills you are seeking are. General management consultants that tend to specialize in problem solving, build scarcity by hiring only certain MBA students that show exceptional problem solving capabilities. These individuals tend to work in teams and are extremely good at structuring problems and ultimately at providing very accurate advice.
General management consultants are to be contrasted with more functional and/or industry experts. These individuals have found a particular focus while working as general management consultants and decided to specialize in that field. The “industry expert” model relies on hires that have gathered experience at other companies they have worked for. The main difference between those coming from a GMC background and industry experts tend to be twofold: variety of exposure and operational experience. The latter is critical if you are considering using your consultants beyond an advisory role.
The second criteria when considering the location of your consultant boils down to how much operational intervention you expect the consultant to play. This ultimately is a question of ROI that accounts for whether you have the capabilities and oftentimes how immediate your need to solve the problem actually is.
In Up in the Air, Clooney plays an expert in what we call “fixed cost reduction”. His job is to bear the burden of the decision to let go of people. There is another scenario: where you look for supply chain experts that can remodel your Sales and Operational Planning Process to reduce cost and working capital in the supply chain and increase your capacity to meet demand and therefore increase sales. These are simple examples where implementing the advice by the ones that formulated them adds value through precision and speed.
Overall if you are looking for commodity advice, you may well be better off by hiring a local consultant that would save you what could be prohibitive travel costs (these can be up to 20% on top of the fees). I would also recommend recruiting locally as the way to go if you expect your consultant to intervene more operationally whether in the first or following phases of an assignment. Consider flying over consultants only when the expertise is not locally available. But do make sure to have a very clear travel policy to avoid incurring massive bills and needless to say make sure you pick the consultants that will be staffed on your project.
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