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Co-founder of Cerulean Associates LLC
There are several steps that you can take to ensure that you get the greatest benefit from consultants.
Warranties do not exist for consultants and independent contractors. Instead, biopharmaceutical executives are left to rely on the ancient Roman warning: caveat emptor: "let the buyer beware". After more than two thousand years, is this really the best we can do?
As a top-level executive for a biotechnology and medical device company, I paid the consultants' bill and assumed accountability for the work. Throughout those years, I spent countless hours assessing status, watching presentations, and reviewing reports, all the while wondering, "Why must I put this much work into shepherding this project to ensure the payoffs I want?"
If this refrain sounds familiar, it's because far too many executives face this question when it comes to managing outside advisors. The business literature is full of examples of consulting projects gone wrong and tales of executive woe at the hands of outside experts poorly chosen and ill-suited to the tasks at hand. Given the added risks of regulatory accountability and litigation over adverse health reactions, biopharmaceutical executives have even more at stake. To achieve better results, take a straightforward set of seven steps to ensure you hire the right kind of consultant and actually get the help you need.
Based on my own experiences, I put together a systematic process to determine the help I needed, find and screen that outside help, and structure the contract to ensure a positive result. Over the past few years, I've informally reviewed and refined this process with the CEOs, directors, and other senior executives. With the following guidance, you should be able to implement your own process to ensure that you get the results you want from any consultant or outside advisor you hire.
The first step is determining if you actually need outside help, and then sketching out some notes on what that help should look like.
Determining if Outside Help is Appropriate
Success in any given project or activity depends on two things: available manpower and proper expertise. If your organization is lacking in either of these, it's time to look outside for help.
You also need independent insight if you and your organization are stuck and need a fresh perspective on yourself and your organization. For instance, assessing strategic options, identifying ways to maximize your organization's efficiencies, or applying current best practices to speed your time to market, are all good reasons to seek outside counsel. However, you need to be cautious. The degree of involvement will drive the level of cost, risk, and effort. Therefore, the next step is to recognize the type of help and level of involvement you want.
Determining the Type of Help
Before you pick up the phone or send an email signaling interest to any outside consultant, make sure you know the type of advice you are willing to manage. Do you need an independent expert's insight, or do you need to delegate a task or project? Selecting and overseeing an outsourced project team is significantly different from dealing with an outside project assurance advisor. The outsourced project team will bring its own methodology and people to plan, implement, and deliver any given project; it's likely that methodology will not be tailored too much beyond what is necessary for your environment. Conversely, the project assurance consultant will serve as your advisor who will help drive and oversee projects, ensure the project is successful, and keep an eye out for better, faster, easier approaches, given the larger picture in which the project is operating. But he or she will not plan the project, conduct the implementation work, perform the testing, or document the details. In other words, the project assurance advisor works on your behalf, while the project team works for you, carrying out operational, tactical tasks.
To determine if you need tactical or strategic help, ask yourself and your colleagues three questions:
1. Do we want outside help to:
A. Take care of our problem and make it go away? or
B. Guide us through the dilemma?
2. Do we want outside help to:
A. Give us a cut-and-dry solution (like a computer system or business function)? or
B. Help us overcome and build on a company-specific need?
3. Do we want outside help to:
A. Get us over a manpower or expertise shortage? or
B. Help us improve our long-term capabilities?
If you selected answer "A" in all three questions, choose a company to whom you can completely delegate or outsource the work, such as an interim executive or a human resources outsourcing firm. In some cases, a generic industry report of best practices may be sufficient to guide your internal staff to resolve the problem. If you selected "B" in the above questions, then choose a consultant who will serve as your advisor, such as a project assurance advisor, an expert on retainer, or an expert who can conduct a mock audit of a specific area with recommendations. In this case, expect to do some of the heavy lifting yourself.
Once you've determined that you need outside help and have a better idea of the type of help you need, it's time to select and qualify your consultant. To do so, you should create a short list of consultants using a four-pronged approach:
1. Review industry publications and make a note of the articles, and their authors, that touch upon the problems you face.
2. Ask colleagues outside of your company for recommendations.
3. Review the web sites of industry associations such as the Regulatory Affairs Professional Society (www.raps.org), or the Independent Computer Consultants Association (www.icca.org). Search their marketplace directories for the key terms relevant to your concern, like Quality by Design or Process Analytical Technology.
4. Review the web sites of the various names you've assembled and look at the consultant's experience, previous client results and published works.
Keep in mind that hiring a consultant is like any investment; past performance is no guarantee of future performance. Thus, you will want to assess if the various consultants on your short list pass muster with several tests that can predict their ability to deliver for you.
The first test is to assure that your prospective consultant has the real-world experience to apply his or her knowledge to your specific situation. Industry certifications were once decent indicators, but a cottage industry has unfortunately now arisen that is designed to help folks obtain certifications quickly and easily (sometimes called "certification boot camps"), so certification is no longer a good indicator of deep expertise. Instead, look at the consultant's publications. Do these articles discuss what works and what doesn't, or is the article a dressed-up sales pitch?
Biopharmaceutical consulting is increasingly specialized. An expert in reimbursement is not the best person to help you redesign your product development processes. If you need expertise in product development, look for specific articles on that topic.
Actionable and Sustainable
The second test focuses on the types of advice the consultant provides. Again, published articles (or tips from a newsletter) can provide clues. If the published articles always propound the same approach or solution, you can be confident this will be the consultant's tactic with you. Assuming you have screened out the one-size fits all solution, you should determine whether the advice is general and generic, or actionable and practical. If it is action-oriented, can the people in your company implement this type of advice with the consultant as a guide, or will you need to hire more outside expertise to implement it?
Be sure to consider whether the advice discussed in the consultant's publications is adaptable and sustainable. To do this, you'll need to determine if the consultant is genuinely interested in your situation, in tailoring his or her advice to your needs, and in giving you the tools and know-how to solve a similar situation yourself in the future.
Testing for interest level and knowledge transfer before formal engagement is somewhat subjective and requires keen observation on your part. Between initially setting up an appointment and the actual discussion, did the consultant think about the problems you face and offer new ideas to consider beyond just hiring him or her? Given that you've reviewed their publications, are the ideas they've offered just warmed-up versions of published advice? Assuming you had a substantive discussion, did you walk away with more clarity or insight? Did the consultant ask pertinent questions or did it seem as if it was a scripted set of inquiries?
You need to feel comfortable with the consultant, and these questions can help you recognize where your expectations were met and where there are gaps. If you cannot close the gaps before formal engagement (such as through another meeting or phone conference), you are not likely to obtain the results you expect.1
Having found and chosen the best consultant for you, and verified his or her capability to deliver the results you expect, it's time to draft the agreement. A 2007 survey published in MX magazine noted that failure by consultants to adhere to contract expectations directly contributed to lost revenue for 63% of companies.2
In a recent strategy article,3 I outlined how to structure agreements to better share the risks with your vendors and suppliers. Any professional, whether outside legal counsel or a consultant, should assume the risk alongside you and your company.
The process described here should help you with any outside investment in services, whether hiring a consultant or outsourcing an entire function. At its heart is the recognition that hiring a consultant is like any relationship: a bad one harms both parties' reputations and will set you back in terms of time, money and missed opportunities; a good one is the reward for entering the process with eyes wide open.
Are you ready?
John Avellanet is the co-founder of Cerulean Associates LLC, Williamsburg, VA, 757.645.2864, firstname.lastname@example.org
1. Baldwin T, Jacobsen I. Peter principle versus doss principle: secrets for engaging consultants to management. Contract Management. 2006 Feb.
2. Rao G. Survey: medtech firms challenged by contract complexity and pricing. MX. 2007 July.
3. Avellanet J. Shared risk: a regulatory management strategy. BioProcess Int. 2008;6(3):20â25.