Management consulting

Box 26.3 “Shoulds” and “should nots” in consulting to government

“Shoulds” that work

1.Show knowledge of the agency’s methods, procedures and processes.

2.Demonstrate genuine interest in the public sector work environment and the difficulties faced by public servants.

3.Learn the specialized jargon.

4.Understand how the agency is measured.

5.Treat each government employee as an individual, separate from governmental stereotypes.

6.Match your own staff qualifications closely to the agency’s requirements.

7.Recognize that decisions often take longer than in business.

8.Respect the fiscal year constraint.

9.Identify and meet the client’s perception of a good job.

“Should nots” that don’t work

1.Refrain from a hard-sell approach.

2.Avoid designing projects that require a great deal of interdepartmental cooperation.

3.Don’t just finish a project but “ease into the completion”, suggesting review steps and follow-up activities.

4.Don’t forget to keep the client fully informed and closely involved, even if the client tries to avoid responsibility.

5.Don’t underestimate the role of the written agreement, especially with deliverables.

Source: W. P. Cordeiro and S. A. Bartik, “How to consult to government”, in Journal of Management Consulting (Milwaukee, WI), Fall 1993, pp. 20–24.

solutions that the client can accept as his or her own and defend with superiors, elected public bodies and even with the public at large. It is important to believe that quality public services are essential to the life and development of the community, including healthy development of the private sector. A negative and unduly critical attitude to public sector managers and other civil servants is counterproductive and inhibits effective problem-solving.

26.3Working with public sector clients throughout the consulting cycle

Marketing

Most marketing to the public sector (development of leads and identification of consulting projects) is through networking and personal contacts. A good network can only be developed over the course of time and requires constant

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effort to maintain. In a limited number of cases, it can lead to direct selection, but more often will facilitate pre-selection and shortlisting.

Most large assignments in the public sector are awarded on the basis of competitive bids; the success ratio of firms bidding competitively varies but is not very high, and preparing proposals is both expensive and time-consuming. Consultants are therefore well advised to develop an efficient process for competitive bidding and to try to maximize their chances of repeat business, which is much less expensive to obtain than is new business. It is useful to develop some business as sole-source, directly awarded contracts: these are generally small, but are relatively inexpensive to obtain and permit consultants to build up and maintain good client contacts.

Selection through public procurement

The selection of consultants, as indeed of other goods and services, has to comply with legislation and rules applied to public procurement in general. A general description of consultant selection is given in Chapter 7 and Appendix 1. What, then, is typical of the public sector? Invariably, formal, precisely defined and structured procedures are used. Most probably there will be an official document, issued by a government agency, which describes the procedure and criteria for selecting a consultant and provides information and guidelines, contract clauses, forms and the like.

The reasons for the use of mandatory formal procedures in the public sector can be summarized as follows:

●to give all eligible candidates the same chance;

●to increase the probability of identifying and choosing the most suitable consultant;

●to make selection “transparent” and less open to criticism;

●to reduce the risks of favouritism, nepotism and corruption;

●to harmonize the approaches used and transfer good experience among various government departments and public agencies;

●to improve the overall quality of consultant selection and appointment in a complex public sector environment.

As a rule, the procedure separates project identification and the drafting of terms of reference from project implementation. A consultant who helps the client to develop a new project idea, analyse the situation and the client’s needs, and produce the terms of reference is regarded as an “insider” and is not usually authorized to participate in the bidding for project execution. The consulting process is thus split into two separate phases, for which different consultants are engaged. This can create technical difficulties and discriminates against the consultants who do the creative and conceptual work of designing the project and producing terms of reference. Conversely, consultants who implement a project may not feel responsible for conceptual flaws because they follow the

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instructions – which may be very detailed – in the terms of reference. They can always refer to the terms that were given to them if the client is not happy with the focus of the assignment and the results produced.

Data banks. Many public sector organizations maintain a data bank of consultants. These data banks may have thousands of consultants and consulting firms, classified by skill areas. In some cases, registration with the relevant data bank is a prerequisite to receiving invitations to make a proposal or being eligible to supply services.

Competitive bids. Depending on the size of the proposed consulting assignment, competitive bids may be requested from consulting firms or individual consultants. Bid documents must generally conform to detailed specifications; failure to respect these specifications leads to the disqualification of the bidder. The evaluation procedures of these bids also depend on the size of the proposed assignment: the criteria, and often the results, are usually available to the bidder.

Budgetary constraints. There may be a strict budgetary constraint limiting the size of the assignment, or predetermining its time schedule.

Managerial discretion. Despite the predominance of formal procedures, public sector procurement of consulting is not totally inflexible. As a rule, small assignments may be arranged by direct selection or using simplified procedures. In certain cases, the appointment of consultants who have done a satisfactory job may be authorized for further services related to the previous job.

Contracting

Both consultants and public sector client agencies may have their standard contract formats. In such a situation, the consulting firm will normally be more flexible and agree to accept its client’s mandatory contract format. Several aspects of contracts with public sector clients (see also Chapter 7 and Appendix 4) ought to be stressed:

●Definition of results should be clear and detailed (what results, including their quantity and quality, who will identify and endorse results, who will assess quality, who will have the final word).

●There needs to be a clear understanding of what is meant by implementation and how far the consultant should go, e.g. in implementation of a new system, what is understood by “system”? Does the consultant have to deliver a preliminary proposal, complete documentation, a system that works, a system plus trained staff to operate it, a system that has attained agreed parameters? etc.

●The participation of the client’s management and staff should be specified precisely, especially for projects that cannot be completed without this participation.

●Confidentiality is a key issue.

●The consultant’s right and obligation to contact directly and consult the public administration’s own clients, users and stakeholders should be specified.

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●The fee structure should be clear (what is reimbursable and at what rates, e.g. subsistence allowances, first-class air tickets or hospitality expenses).

●The budget and payments structure and schedule should be clear (to comply with budgetary and payment periods and procedures of clients).

●The fee levels should be specified. Requests for proposals generally ask for detailed information on pricing, including the daily rates and time allocation of individual consultants. Often maximum or set fee rates are established by regulations, and these may be below market rates in the private sector.

Implementation

Many experienced consultants consider that in the public sector, people and process problems prevail over technical problems. It is important to adopt an approach that includes full consultation and communication with all stakeholders. Consultants can be excessively idealistic or tempted to recommend the best theoretical solutions. While there is academic satisfaction in finding a “best” solution, what matters most is finding solutions that are practical, acceptable and stand a good chance of being implemented. A recommendation that leads to real change is worth any number of elegant reports that will gather dust on the shelf. Full consultation will ensure that conclusions and recommendations do not surprise and antagonize stakeholders, although it is in the nature of societal problems that not all stakeholders will be equally satisfied with a recommendation.

As with all consulting, public sector assignments must be managed for quality, scheduling and budget. Perhaps the greatest risk with public sector work lies in inadequately forecasting the amount of time necessary for working with stakeholders and for the decision process in general. There are no short cuts in the process of consultation with stakeholders, and neglecting this process can have painful consequences. Another characteristic of most public sector assignments is the need to produce well-edited reports: these documents are, or might be, made public and care and time should therefore be given to their production.

26.4 The service providers

The market for management consulting services in public administration is large and challenging. With the current changes and new challenges, the demand for public sector consulting in many countries is likely to remain stable or even increase in the future.

Private consulting firms

Many public sector assignments are large and complex enough to require the resources and experience of large consultancies that can mobilize multifunctional consultant teams and run parallel activities in a number of public

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agencies. Indeed, all major consultancies on the international scene have worked for governments and consider public sector contracts to be a standard and fairly stable part of their service portfolio. Some consultancies are known as specialists in certain fields, e.g. in consulting to local government or national health administrations. However, various projects provide opportunities for smaller consulting firms and also for individual consultants, especially if they become known to civil servants as specialists in their fields of activity.

Institutes and schools of administration and management

Institutes and schools of administration and management tend to regard consulting to government not only as a source of income, but as a service that is complementary to training and education and provides the institution with needed insights into the administrative and decision-making practices of the public sector. Governments, in turn, seek the advice of professional researchers and educators from both public and private institutions on a broad range of issues, especially in the fields of public policy, policy analysis, strategies of government modernization and reform, service ethics and staff development. Professors of law, political science, public administration and management are often chosen as senior advisers to government institutions and members of various expert committees. Their influence on changes in public administration can be considerable.

Internal consulting groups

In marketing services to the public sector, management consultants must also be aware of the frequent presence of internal consulting groups within public sector organizations (see also section 2.6). While the number of these groups has been decreasing, they still exist in many countries. Some of them provide free consulting services to government clients, while others charge fees (as a rule subsidized) for their services. The range of services provided varies significantly: some groups provide only limited services such as personnel and audit, while others provide a wide range of services.5

The procedures for public sector managers purchasing the services of internal consulting groups are generally simpler than those that apply to private sector purchases. Most internal consulting groups complement their own resources by hiring consultants on subcontract from the private sector, and can therefore be valuable clients for private sector consultants. Some internal consulting groups also manage other consultants on behalf of an agency and provide information to government on consultants’ competencies and profiles and on competitive fee rates. On the rare occasion that an internal consulting group is fully dependent on revenue, i.e. self-financing, it can provide a yardstick for reasonable fee rates for consultants hired by government.

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