(2 minute read)
It’s a common maxim in consulting: “what the client wants; what the client needs; and what the client asks for; are three different things”.
On starting out in new assignments, I’ve often had young or inexperienced consultants revert to me in surprise with statements like “gee, the client is rather disorganised, they can’t give us much direction at all…” to which I’d often reply “well if it was clear and easy, they wouldn’t need us in the first place…”.
It’s a client’s prerogative to provide as much or as little information as they can afford as part of the brief. It behoves the good consultant to solicit further information through the process of enquiry. (We’ll look at advanced enquiry skills in a separate article).
What can help both the client (as purchaser of consulting services), and the consultant (as provider of those services), is a better understanding of the various engagement models that commonly apply. Its important to understand, because the engagement model used by a client (whether deliberate or unwittingly) impacts the consultant’s accountability, risk exposure, pricing, and day to day approach in executing the brief.
“…the engagement model used… impacts the consultant’s accountability, risk exposure, pricing, and day to day approach in executing the brief”
So lets have a look at the most common engagement models used by management consultants. And lets consider this in the context of, say, some major piece of reform, whether an organisational reform or delivery of major program or policy component. Note, of course, there could be many permutations of these concepts.
| MODEL 1 | MODEL 2 | MODEL 3 | MODEL 4 | |
| Traditional Advisory | Product Delivery | Delivery Capability | Resource Augmentation | |
| Client Ask | “I need a body of independent advice or a professional opinion. I’ll provide access to information and stakeholders. I want the consultant to assess the evidence and provide options, opinion or recommendations. I may or may not agree with the advice. I’ll determine separately how to deliver against the advice with my own resources” | “I need a consultant to build me essential products or artefacts to support my reform. Those products require expertise that I can’t access internally. I may want to influence or shape the content and conclusions based on our own corporate preferences. I’ll determine separately how to utilise the product with my own resources.” | “I need a consultant to take charge of a stream of work within my reform. They will build the essential products (as in Model 2), and also provide the skilled resources to apply that product towards stream based outcomes. I want both the advice, and the capability to deliver that advice. I may contribute some resources to the team, but under the direction of the consultant” | “I’ve set the direction and plan for my reform, and I intend to deliver this internally. But there are gaps in expertise in my workforce, whether in leadership, management or technical positions. I need the consultant to fill those gaps to augment my team. I expect the consultant to monitor the performance of their people, and provide me acceptable replacements for non-performance or resignations.” |
| Likely Market | Consulting market | Consulting market | Consulting market | Consulting market or Contractor market |
| Success Factors | Delivery of brief Quality of output | Delivery of brief Quality of output | Quality of resourcing Stream or program outcomes | Quality of resourcing |
| Output Branding | Consultant branded | Client branded | Client branded | Client branded |
| Teaming | Consultant led | Selected client roles embedded with consultant team | Blended (consultant heavy) | Blended (client heavy) |
| Typical Duration | Short, discrete | Short, discrete | Medium to longer term | Medium to longer term |
| Approach / Method | Consultant supplied | Consultant Supplied | Consultant or Client supplied | Client Supplied |
| Typical Pricing Models | Fixed price | Fixed price | Time and materials and/or incentivised delivery | Time and materials |
| Pricing Risk | Transferred to consultant | Transferred to consultant | Retained by client | Retained by client |
| Examples | Strategic review Policy or Program review | First or second pass business case Communications Products | Program Management Office | Terms of Reference (TOR) for Role |
| Comments | Client is seeking independence of opinion, hence client involvement is at arms length | Client inherits the product, so seeks to be involved in the planning and delivery. | Some clients seek to run this model on a fixed price or “As A Service” basis and hence transfer pricing risk to consultant. | Client retains all control and accountability. Consultant accountability limited to resource suitability against TOR |
Problems arise when the behaviours of clients or consultants start to contradict the intent of the models. Here are two common examples:
- When clients start to direct the consultant resources on a day to day basis under a fixed price engagement (eg Model 1 or 2), they leave themselves exposed to claims for cost overruns.
- When the consultant under a time and materials engagement (eg Model 3 or 4) fails to provide regular reports and budget updates to clients, they risk having their invoices rejected if a contract cap is exceeded.
A recent Commonwealth Government audit into government ICT procurement practices (https://www.anao.gov.au/work/performance-audit/digital-transformation-agency-procurement-ict-related-services) revealed systemic procurement problems, contributed, in some cases, to commercial behaviours and actions that were clearly contradictory to the engagement models. Its not a pretty read, but it highlights the importance of selecting the right engagement models from the outset.
In a separate article, we’ll look at how these models are formalised into commercial agreements, and the implications for contract management.
Dr Nigel Nutt
Founder and Principal
Tabiya Services Pty Ltd
www.tabiya.com.au
The views and concepts presented in this article are the intellectual property of Tabiya Services Pty Ltd. All rights reserved. The article may be forwarded or recirculated as long as the article remains complete, and attribution to Tabiya Services is retained.