Consultants, when properly used, can be a great benefit to your agency. As a resource with varied agency experiences, as an unbiased mediator, or to provide expertise in specific areas, a consultant can assist you with valuable knowledge.
Consultants can be used as villains. For example, a manufacturing consultant told me how proud he and his partner were after completing a big job. After they finished presenting their findings, which included lots of job and expense cuts, the president of the firm brought them into his private office, broke out a good bottle of scotch, and told them, 'Thanks. You guys did a good job and identified every problem I knew existed and came up with the same solutions I arrived at.'
'Why hire us, then?' the consultants asked.
The president said, 'I needed someone to blame the cuts on!'
Consultants can be a resource of knowledge of what the best agencies are doing. Good consultants visit many agencies and collect the best practices of each. When seeking suggestions for improvements, determine whether you want the best practices or minimums for survival. Sometimes the best practices aren't applicable to all agencies.
Consultants can be used as mediators. If your agency is having a conflict, an unbiased participant can have very positive effects. An outsider's point of view is often more easily accepted. For example, if an unbiased person advises that something isn't possible, a person may hear and understand the outsider, whereas they might shut out a co-worker with the same suggestion.
Consultants can be used to improve your agency, often by using your employees' valuable insights. You might ask, 'I can ask my own employees for suggestions, so who needs a consultant?' Many agencies do. Agency owners often need an outsider to confirm their employees' suggestions. With a professional's backing, the owner is more likely to listen and accept the suggestions.
Consultants can be used when expertise in a certain area is required. Such situations include agency valuations; buying, selling, or merging agencies; perpetuation; and automation. Very specific knowledge is required in these areas, and the stakes are high enough to justify investing in a professional.
Now that we've established that consultants do have their uses, what's the best way to choose one?
Choose consultants that don't have conflicts of interest. Common conflicts include having an interest in the value of the agency, owning another agency or part of one, or being employed by an insurance company. While at times these conflicts aren't important, sometimes they're very important. A consultant with a conflict might do a great job. But you'll have no way of knowing whether their work is biased or whether your information could find its way to someone else.
Choose a consultant who's compatible with your agency. For example, sometimes an agency owner might be more comfortable with a consultant who has had similar career experiences.
Choose a consultant who doesn't specialize in everything. Someone advertising financial, automation, marketing, sales, and operational consulting would have to be an exceptional person to offer expertise in all those specialties. Most good consultants can offer suggestions in each area, but very few specialize in all of them. Avoid hiring a jack-of-all-trades who most likely is a master of none.
Finally, choose a consultant that's good. This sounds obvious, of course, but how do you determine whether they're good? Ask your state association. Identify consultants who specialize. Read articles and attend presentations. Ask for recommendations from other agencies. And always check references.