Are Strategy Consultants Worth Your Investment?

Acumen’s President and CEO shares her thoughts on strategy consulting—with a view from both sides of the fence and how to break barriers for a more productive and meaningful collaboration.

There comes a point in the corporate life of CEOs—whether an old or new hand in the company—when significant shifts or disruptions affect their business and they are compelled to rethink their growth plans and ambitions.

Tapping outside help to draw up a renewed or new business strategy roadmap is one way forward, and it is important to understand how to make the most out of that investment.

In the past three decades of my professional life, I have been on both sides of the fence: a client of consultants, and a consultant myself servicing clients. The switch from client to consultant has been an eye-opening experience— and I’d like to share some perspectives on how to engage with them.

My first encounter with a consultant was during my time at Coca-Cola, where engaging external consultants was common practice.

We needed to predict future revenues to guide capital investment and other strategy decisions. Our consultant developed a demand model based on numerous sets of data. It helped us predict sales based on the actions we will take. It looked like a giant calculator with algorithms in the background and a nifty interface where you input your assumptions. 

Overseeing strategic planning then, it was an important tool for me to have a systems view of all the factors that drive consumption and demand—these two are different, by the way—and to simulate the impact of strategy choices.

Another consulting engagement I vividly recall is when our regional team for BPW Asia, the joint venture of Coca-Cola and Nestlé, needed to generate innovation ideas.  We flew in a team from the US to run a workshop for us. I still laugh at the memory of the out-of-the-box concepts we generated then. When I found out though how much these consultants cost, I wondered how we could have made the fees worth it.

Fast forward to today, more than 20 years after I made the switch and over a decade now leading the firm, I can say that investing in and engaging strategy consultants could be made worthy of every peso if you understand the factors that determine a successful collaboration.

A big factor is client profile.

CEOs and other leaders in their team can themselves assess their own profile.

Given their exposure to different types of consultants, they need to focus on identifying the most cost-effective options for their specific need on hand. 

Thus, the starting point to making an engagement truly worth it is to have a very clear brief that will answer such questions as:

Answering these questions can help assess the value of what is truly at stake.

You’d have to make sure that those who pitch their consulting services have the expertise and track record to answer your brief.

The possible trap that you need to watch out for are those who cannot distinguish between the output you truly need versus what’s just nice-to-have.

The best way to illustrate this is when they recommend that you buy a luxury SUV when all you need for now is a simple sedan.

Therefore, a clear brief will allow you to find the most effective and cost-efficient consulting firm that suits your requirements at hand.

For this set of clients, outsourcing a consultant is simply not worth the time and money, as they are not ready. They will only be motivated to seek external help when a major, earth-shaking, black swan event happens in the business. At that point, engaging consultants become worth it if they choose a firm that can right-size the problem and start (and end) only where the client specifically needs help on. A clear brief remains crucial and casting the net wide in search of the right consultant partner to work with is a must.

This type of clients are the most vulnerable because professional services firms would tend to fit the problem into their canned solutions — “If all you have is a hammer, everything looks like a nail,” as the saying goes.

Therefore, hiring a strategy consultant whose approach is to start with a thorough, data-based diagnosis of where the client’s biggest problem could be is critical.  Sans this discipline, the clients may end up paying for services that will not really address the issue—leading to not just wasted money but also invaluable time. 

After this self-assessment, corporate leaders considering to engage consultants must also be ready to listen to all the good, the bad and the ugly.

Good consultants should espouse both integrity and respect. Integrity to call a spade a spade, to ask the tough questions, to call out elephants in the room – but very importantly, to base all these on hard data, not opinions. This is crucial for you to get your money’s worth and not just hear what the consultant thinks you want to hear. Integrity must be coupled with respect – for the client as a company, and for the individual stakeholders.

Consultants should not speak and act like they are the smartest people in the room; they must acknowledge the fact that the client has built many parts of the business successfully.

Several times in the past, we have had to present some painful findings and recommendations, but we are always careful to deliver them in a straightforward yet respectful manner. In one instance, tears rolled down the eyes of a client after we delivered a presentation that showed what customers were saying about their service.

The team was working very hard at a customer service project, but it was only when we thoroughly assessed what they were doing vs the reality of customer expectations did the true gaps come out. 

As painful as it was at the beginning, the engagement became the foundation of a major customer service transformation that eventually saw turnarounds in Net Promoter Scores.

Work collaboratively with consultants, especially in providing data that will complete the entire context of your situation.

Without the big picture and a substantially complete briefing, consultants cannot do what they are supposed to do, and that is to integrate a large set of data and pinpoint root causes and key drivers that must be addressed.

Choose carefully who you engage to avoid getting dissatisfied. 

Clients come to us frustrated that they had paid an arm and a leg for other consulting firms, only to receive back just an echo of what they have told the consultants.

This happens when the consulting firm does not have clear, established knowledge of the local market or when those who work on engagements are junior associates who have neither expertise nor tools to truly add value to the client’s baseline knowledge. 

At the onset, the consultants must have a burning curiosity about your business, organization or industry.

They should be asking a lot of questions, which is a signal that they will take the engagement seriously and are already beginning to turbo-learn. 

If they begin to dish out solutions even before asking questions, quickly end the briefing— they are just looking for an audience for their opinions and do not have the discipline to properly do a data-based diagnosis first.

Consultants can help you reach your business goals and will be worth the investment, but only if they are the right partners for your company. And that is a decision that rests on the client.

Hiring a consultant can either be a major catalyst for accelerated performance and solving challenging issues or can be just a waste of time and money. 

Take control of which one it will be for you.

About the Author Pauline Fermin

Pauline Fermin is currently the President & CEO of Acumen Strategy Consultants. She has over 26 years of experience in strategy—both as a corporate executive and as a consultant. She combines her depth of experience in research and marketing with the discipline of finance—applying a broad and holistic view in strategy formulation. She has applied her strategic expertise in helping clients from a wide range of industries, including food and beverage, packaged goods, financial services, pharmaceutical, real estate, retail, telecommunications, transportation, software, and other services.