Consultants: A User's Guide

CONSULTANTS: A USER'S GUIDE

by Jack Nordhaus, Ph.D.

Everything you always wanted to know about working with a consultant.

'All is flux, nothing stays still'

Heraclitus
540 - 480 B.C.

As an independent agent, you face a constant barrage of change in technology, regulation, recruiting and managing staff, marketing and distribution, carrier relations ... the list seems endless.

You try to keep abreast of through professional education (reading, seminars and conventions, classes, and so forth), while juggling the other responsibilities of running an agency. But at some point, the chances are that “information overload” — the sheer volume of change — will overwhelm your best efforts to deal with the problems you face.

That’s where the consultant comes in. Webster’s defines a consultant as, “an expert called on for professional or technical advice or opinions.” Agents often turn to a consultant when they lack the time and/or expertise to deal with a specific situation. The adage “time is money” applies in spades, especially if your agency is facing a short-term emergency.

Even if there’s no specific crisis, you might do well to consider hiring a consultant. After all, it’s a good idea for healthy people to go to the doctor for regular checkups at regular intervals. An investment in this type of preventive maintenance can pay rich dividends.

A consultant offers your agency two primary benefits: (1) professional experience/ expertise; and (2) objectivity — the perspective of an outsider with no axe to grind.

TRACKING DOWN CONSULTANTS

This shouldn’t be a problem:

1. The American Association of Insurance Management Consultants (AAIMCO) offers a good resource.
2. You can ask other agents make recommendations based on their own experience.
3. State or national agents associations should be able to provide the names of consultants.
4. A number of carriers have arrangements with consultants who offer agents preferred rates; a few (such as the Hartford) provide in-house agency consulting services.
5. Many consultants also write articles or for trade publications.

PICKING AND CHOOSING

Selecting the right consultant for your situation requires an investment in time and energy. Here’s what to look for:

• Professional ability. Review the consultant’s resume, educational credentials and work experience;
• Track record. check the consultant’s references, asking for both an overall evaluation (competence, reliability, etc.) and the specific details to flesh it out; and
• Personal compatibility. Although you shouldn't hire a consultant based on a winning smile, you and your staff will need to get along with them on a personal level as you develop a working relationship. A consultant who has the technical expertise to solve a problem but rubs management and staff the wrong way could leave your agency worse off than at the start of the engagement.

MAKING IT WORK: THE 10 COMMANDMENTS OF CONSULTING

1. Understand the need for a consultant. Analyze the nature of the problem, the investment needed to resolve it, and the general nature of the solution.
2. Commit the time, money, and energy needed to make the most effective use of the consultant. Commitment is crucial: Just handing over the problem to a consultant and walking away from it won’t work.
3. Don’t withhold needed information. A consultant can’t fly blind. State the nature of the problem and the desired goals as specifically as possible. Don’t hesitate to provide confidential information; at the same time, feel free to ask why the consultant considers a specific piece of information to be relevant.
4. Draw up a comprehensive contract with your consultant. This agreement should specify the nature of the problem or situation, cover compensation arrangements, give an estimated timetable, and state the type of results expected (verbal and written reports analyzing the problem and offering specific solutions). The contract should also give either party the right to withdraw if it becomes clear that the arrangement isn't working out.
5. Get your staff involved. Use a positive, non-critical approach to let them know the purpose of the consultant’s visit, stressing the importance of cooperation. Then encourage the consultant to interact with the staff on the same basis. Employees might well provide valuable input to a third party that they would feel uncomfortable sharing with management.
6. Take your consultant’s advice — within reason. You hired them to provide the benefits of experience, expertise, and an objective viewpoint free of management interference. So their recommendations deserve respect — even when they tread on management’s toes or upset employees. On the other hand, there might be good reasons for rejecting or modifying specific recommendations. If you don’t feel comfortable with the advice the consultant offers, you’ll have a tough time convincing your staff to accept it.
7. Follow through. Implement the consultant’s recommendations assigning specific actions and goals as soon as possible. Procrastination (the “someday I’ll get around to it” approach) won’t fly.
8. Get ongoing support from your consultant. If possible, work with a consultant who will help monitor implementing recommendations through regular meetings and reports. Transform your consultant into a coach.
9. Establish a give-and-take relationship with the consultant. After they have met your needs and solved your problem(s), offer to act as a reference or write an article describing your experience. This is a great way to publicize your business while solidifying your link with the consultant.
10. Make using consultants a process, not a project. The consultation needed to keep your agency running effectively should become a regular part of agency operations.