Are consultants real!) jolly good chaps?
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David Wilcox asked one: Do they deserve their lowly reputation? He found the answ€ quite impressive. Advice for clients is: be specific when seeking their services
FIRST, a story: how can you spot a consultant at a party? Simply ask everyone in turn what the time is. The consultant will be easy to identify. He will respond to your question by borrowing your watch, telling you the time, charging you for the information — and then he'll walk off with your watch.
The person who told me this obviously didn't place consultants too highly on his list of favourite people. Do consultants deserve this lowly reputation? I went along to meet one who specialises in transport and distribution, and playing the Devil's advocate I more or less asked him to justify his existence.
Roy Noble is a director and a senior consultant for M.M. Distribution Consultants (Operations) Ltd. When looking for a relevant consultancy company to tackle, M.M. stood out because it was fairly representative in that it specialises in transport and distribution but is based in Glastonbury, Somerset, and does not sport a West End of London address like so many of its competitors.
The company was formed in 1971 by its now chairman and managing director, Robin Williams. It has between eight and 14 full-time consultants at different times, supported by four administration staff. It generally handles 25 to 30 assignments each year. Among the consultancy companies that work mainly in the transport field this makes M.M. mediumsize if there is such a thing — the range is from a one-man business up to 100 or so consultants. In addition to its full-time consultants M.M. also keeps a register of freelance consultants who may be called upon to supplement the regular staff, either in terms of extra hands or additional skills.
Although based in Glastonbury, Roy Noble said M.M. is far from parochial; about half of the company's work is on the Continent or further afield. Ireland, Belgium, Holland, Italy and Sweden are all important markets for M.M. and it has ties with management consultancy and marketing companies in some of these countries.
The proportion of Continental work has risen in the past few years and Roy said that British consultants generally have a good name abroad — their Continental colleagues tend to be rather more expensive.
Taking up my role of Devil's advocate, I first asked Roy Noble what gave him and his colleagues in the business the right to call themselves consultants? What is their background and experience?
Replied Roy: "All our consultants have direct line-management experience, either in physical distribution management or in some other aspect of freight transport. We cover all modes of transport so one of us might have extensive warehouse experience while another has worked on ferry operations, another has worked on the 1 sign of container handling fac ties and so on."
Consultants are often thou! of as being strong on acader theory and short on practical tails. Roy admitted that most the consultants in the compe do have a BSc or similar deg but said that the qualificatic take a back seat to industrial perience.
"We are usually looking fo: least 10 years good, relevant perience, which means that 1 consultants are at least in if early thirties. It's also import for them to be able to comr nicate with all levels of mana ment, from boardroom dow he said.
"But we think the most imr tant quality in a consultant is way he thinks. He must be tot objective. M.M. is operath orientated. We aim to m specific, hard recommen tions; we're not so much i strategic planning. We talk terms of results, not concepts This last point does answE commonly heard criticism consultants; that they make c nebulous, rather vague sugc tions.
If consultants are so cape and have good experie and qualifications then aren't they holding dc responsible position, transport or distribu management?
Roy Noble said consultants tend tc particularly ambit and that a consulte job gives them a cha to appiy their skills ! a wide range of ta something th conventional job m not be able to nlE Thinking just as objectively nd results-oriented, I wondered the consultant's fees had anyling to do with it? "That's a lyth," replied Roy Noble. =inancial reasons are not that rang. A consultant doesn't 3rn as much as you think." Apparently, a consultant's areer is frequently fairly short perhaps just three or four ?ars. The reason for this is that le of the client companies for horn the consultant is working -1 a project will tempt him to in the company full-time at the ad of the assignment.
What sort of companies call the services of distribution insultants? Surely, small commies can't afford it while the rger ones have enough exartise and manpower within eir own organisation?
According to Roy Noble, the gument that small companies in't afford to employ a consulnt doesn't hold true, although ost of M.M.'s clients are larger 'meanies. He said that M.M. is Rielly looking for a 5:1 pay-off. other words, if M.M.'s fees for project are £5,000 then the vings achieved (or the extra venue earnt) should be worth 5,000, so a small company ands to gain just as much as a -ge company.
Replying to the point that -ge companies should be able
find their own answers, Roy )ble said that in recent years any large companies have mmed down. They don't have are special project managers a loose end, waiting to get air teeth into another knotty oblem. Line managers are too sy with day-to-day affairs to art looking at something new.
People who are strongly antinsultant very often resent the rusion of an outsider. "Who ows my business better than ?.?" they ask themselves. This ems a valid argument and I t it to Roy Noble.
He countered that the utsider" — the consultant — II approach the project with no ?conceptions and will take a -npletely objective view. "He's o free of the internal politics it most companies have, and ne of his advice or proposals I be affected by job-protection -isiderations. You would be 'prised how these two factors a cloud the picture."
Auch of M.M.'s work is on bef of large client companies o may be specialised in their
n field but who are consid-ig breaking into another secof the market. For instance, a tribution company may want break into the vehicle rental ;iness as well, so it employs a
consultant to assess the market and advise accordingly.
If this was M.M.'s assignment, Roy Noble said it would involve industrial market research to investigate the total size of the market, whether there is room for another competitor, any particular sector to aim at (including likely customers), which area of the country to concentrate on, how big the investment should be and the likely profitability.
Sometimes this research may indicate that the idea is not such a good one and Roy estimated that in 10-20 per cent of cases the consultant advises the client to steer clear.
But is there no pressure on the consultant to say that the idea is a good one — it will satisfy the client company's md and probably involve the consultant in more development work?
Said Roy Noble: "It may be tempting for a consultant to do this or become a yes-man, but this makes for a short-lived career. A consultant is only as good as his results. When his advice turns out to be wrong it will ruin his track record and you only need one unhappy client to put an end to your career as a consultant."
When most companies consider employing a distribution consultant, they will ask for a list of previous assignments and will take up some of these references. Roy gave me a list of some of M.M's previous clients and I was surprised to see some big names there, reinforcing what he had said about the large companies looking outside their own field of expertise. BRS, Atlas Express, Ford, Leyland Vehicles, London Carriers, the Post Office ... all have used M.M. at one time or another.
Another fairly common assignment for M.M. is to examine for a manufacturer the choice between running his own transport fleet or using a specialist carrier. Here, M.M. will not only advise which is the better course but would also list which carriers, if'any, are likely to give the best service.
A smaller job would be to advise on the best method of vehicle acquisition; outright purchase, hire purchase, leasing or contract rental.
Warehouse planning, including the choice of racking and handling equipment is a regular project for many distribution consultants. Similarly, a depot siting assignment might include the use of a computer model to find the general depot location and then some good oldfashioned footwork to find the exact premises or site. And now for the $64,000 question. How much does all this cost? M.M's fees are based on the amount of time the assignment takes, calculated in days of the consultant's time and days of the director who oversees the assignment. Expenses are added to this.
M.M's assignments vary from one week to six months, with the majority in the eight to 12-week. bracket and the corresponding fees are usually in the region of £5,000-£10,000. Using the 5:1 pay-off ratio, this should mean earnings or savings of £25,000£50,000.
Roy Noble said he is wary of the client whose first question is "How much will it cost me?" he explained: "Sure, we can do a job as cheaply as you like, but if the results aren't right, what's the point? Our track record and personal recommendation is far more-important and we always encourage clients to consider those."
Every industry has its share of "pirates" or "cowboys" and I suspected that the consultancy business is no exception. In Roy Noble's opinion there are not many among the specialised transport and distribution consultancy companies: "I think the distribution industry is fairly conservative — it's not too impressed by the high-fliers. There are more cowboys in the field of general management and marketing consultancy."
If a client is not happy with the performance of the consultant or if the advice turns out to be incorrect, what come-back does the client have?
Apparently it depends on how specific the consultant has been in his proposals. If he originally promised a 50 per cent reduction in costs or a 50 per cent increase in throughput, for instance, then this should be built into the contract so that the client can legally withhold payment or take suitable action if the results do not materialise. So it's advisable for a client to get this sort of agreement before employing a consultant.
When choosing a consultant, should a client company go for a large/medium-size consultancy practice or opt for a smaller, possibly one-man business?
There are no hard and fast rules, but the larger companies will obviously offer a wider range of skills. On the other hand, if a one-man business specialises in exactly what you need then he'll probably be the better choice, since his overheads will be lower.
The best advice is to look at the price last; the first consideration should be the consultant's record up to now. Ask for a list of previous clients and take up as many references as possible.
There is a British Consultants Bureau and although it sets no standards, membership of this is some guide to the consultant. Relevant professional institutes and trade bodies such as the Institute of Grocery Distribution . and the Freight Transport Association should have a list of known or preferred consultants in their field.
Finally, its not an easy time for consultants just now. Although some claim to be booked up for months ahead, others are having a fairly quiet time. Roy Noble pointed out that consultancy generally benefits in a time of growth as companies look for new markets into which they may expand. "Money is tight now," he said. "Some of this expansionist type of wOi`k has been replaced with assignments to look at cost reduction."