Executive Travel : Have Clear Objective Before Picking a Consultant

When attempting to do business in a strange country, it is nice to have a knowledgeable consultant by your side. And there is no shortage of consultants willing to help shepherd companies through the complexities of introducing products, breaking language and marketing barriers and smoothing trade-related red tape.

Having a consultant who knows what he or she is doing can be crucial. The consultant’s job is to help you avoid marketing fiascoes, such as the infamous case where Chevrolet tried to introduce its Nova car in Spain without a name change. In Spanish, “no va” means “doesn’t go.” And it didn’t.

But how does a company choose a good consultant? There are no licensing requirements for consulting, and people with widely varying levels of skills and experience can call themselves consultants. There are, however, some strategies for making the most of a consulting relationship.

“I think consultants receive a bum rap from many business people,” said David James, president of Business Strategies International, a San Francisco-based international marketing and consulting firm. James has worked both sides of the fence. As a legal executive with three large public companies, he was often in charge of choosing outside consultants for projects. Today he is a business consultant specializing in the Asian marketplace.

“The rap is that they [consultants] are expensive, have little ultimate responsibility for the results of their work and often do not have a grasp of the problems of their clients,” James said. “The other side of the argument is that consultants provide an objectivity and expertise that their clients often do not have, and they can often enable their clients to avoid costly mistakes or seize opportunities that would otherwise be missed.”

Consultants can be extremely helpful for companies as they try to break into new markets or expand existing ones, said Gladys Moreau, director of the Export Small Business Development Center in Los Angeles. Moreau frequently refers small- and mid-size businesses to consultants as part of the center’s charter to increase trade.

Having a successful consulting relationship depends on both sides having a clear understanding of their objectives, she said.

The first thing you should do is recognize that there are different types of consultants, Moreau said. Some are solo professionals who only consult for a living. Some are doing it during a career transition. And some work for large consulting firms.

Generally, consultants who work for big firms cost more, but they may also have easy access to more resources and expertise than an independent consultant.

Small companies usually can’t afford to hire the large consulting firms, Moreau said. For them, independents offer the expertise at a price that’s within reach.

For example, a large consulting firm may bill between $150 and $200 an hour, sometimes more, and that doesn’t include out-of-pocket expenses such as copying fees and travel costs.

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Smaller independents bill $100 and up, Moreau said. But don’t rely entirely on rates when comparison shopping. A $100-an-hour consultant may end up costing a lot more than one hired for $300 an hour if the less expensive consultant isn’t as knowledgeable or experienced.

Some consultants will also work on a flat-fee basis or will consider some kind of bonus based on results.

The key to getting the best deal is doing some homework.

“I’m always startled when people will go to hire a consultant with less research than they would do to buy a washing machine,” Moreau said. “You always have to be an informed consumer.”

Start by checking with international trade associations, foreign government trade offices or the professional associations in your own industry to get names of consultants other companies have used. Asking your banker, accountant or lawyer for names can also be a good source of leads. Organizations such as the American Marketing Assn. often list consultants in their directories. And foreign embassies have commerce officers who can also provide leads.

There are directories of consultants, such as the Consultants & Consulting Organizations Directory (Gale Research, [800] 877-GALE) and the Directory of Management Consultants (Kennedy Publications, [603] 585-6544).

Once you’ve found some names, try to interview at least two candidates for a given project since the interview process will help focus your objectives and give you an idea of how different people would handle the task, James said.

The most successful consulting arrangements usually occur when the consultant has experience both in the country you’re hoping to break into and with the product you’re trying to sell.

Previous experience in the country is essential, Moreau said, adding, “And find out if it was five years ago or 20 years ago.” Recent experience is critical because international situations change so rapidly.

Moreau recommends putting a cap on the number of hours for the project and on out-of-pocket expenses. It’s also important to construct the contract with natural escape clauses. If, for example, you’re hiring a consultant to help penetrate the Chilean market and during the first phase of the project you discover there is a non-liftable barrier to introducing your product to that market, then your contract should let you out, Moreau said.

However, the most important precaution of all is to have clear goals for the project. In fact, this is the point consultants themselves emphasize the most.

“Make sure you’re clear about what you want the consultant to do,” said Allyson Stewart-Allen, director of Allyson Associates International Consultants, an international marketing consulting firm with offices in Los Angeles and London.

A good consultant can give you information about the local market, who your most likely target customers are and the best way to reach them, she said. Ideally, they have a representative in the country itself with an extensive network of contacts.

Consultants also have different strengths. Some are good at strategy but not implementation. Others can’t help you with the plan, but once you have one they’ll make it happen. A few do both.

Put in writing exactly what you expect the consultant to do, Moreau said. For example, if your company is trying to open a market for electronic keyboards in Chile, it might hire a consultant to pinpoint any barriers to keyboard imports, list possible joint-licensing agents and research the reputations of potential business partners. Agree in advance on what specific tasks will be accomplished and a reasonable time frame.

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A successful contract “depends on how well the consultant understands your objective,” Stewart-Allen said. Having good rapport with the consultant is also important. “You’re buying a business relationship as much as you’re buying a transaction,” she said.

Remember too that what takes a year or two in the U.S. could take three to five years overseas.

Another common problem is thinking that as long as there is a consultant in the picture, management doesn’t have to focus much energy on the project, Stewart-Allen said. “But it’s managerially intensive and time-intensive at the front end to get it done right.”

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Before You Hire

A good consultant can open up markets for business, and a bad one can cost you far more than a fee. Here is a checklist suggested by experts:

* Check references thoroughly. A potential consultant should get a rigorous review, just like a job candidate.

* Ask references whether the person has done the type of work or project you seek. Try to get a “problem, solution and result” summary of previous projects the consultant has worked on, said David James, president of Business Strategies International. Also ask about experience, work habits and compatibility.

* Find out how long the person has been consulting and how much he or she knows about the subject involved.

* Get a sense of the person’s work habits. Does he meet deadlines? Is she flexible? Does he communicate well?

* Gauge how the personality and style of the consultant will mesh with those of your own staff. It also pays to find out who is going to do the actual consulting work. If you go with a larger firm, it may delegate to less experienced employees.

* Find out which professional associations the consultant belongs to. While such memberships are no guarantee of capability, they do indicate that the person keeps up in the field.