The previous chapter provided an introduction to the process of the appointment of consultants and the common steps involved. This chapter examines the interview between the consultant and the client prior to the preparation of a proposal, which is described in the next chapter. This initial meeting may take place at the behest of the sponsor as a result of his/her need to address a specific issue, as part of a tender process (similar to that described in the previous chapter) or at the request of a consultant seeking to sell a particular service. It will be instrumental in the development of the relationship between the client and the consultant and, where the client has a need, establishing exactly what that need is. The purpose of this chapter is (for the client procuring services) to inform information sharing and (for the consultant) to suggest the questions that should be raised and the information that should be collected. It is a communication process where both parties must fully engage if a satisfactory outcome is to be achieved from both perspectives.
28.1 FIRST IMPRESSIONS/CONTACT
The first meeting between a client and a consultant will be critical to whether any future contact is made. During the first meeting between the two parties, a series of important issues are decided, such as:
• the interpersonal nature of the relationship and whether the client could work constructively with the consultant;
• whether the consultant organisation is considered to have appropriate experience and ex- pertise;
• whether the consultant(s) who will be assigned to the task have sufficient experience;
• whether the consultant organisation has a good reputation for delivery;
• whether there is mutual respect for the professionalism of both parties;
• whether the consultant wants to take on the assignment;
• whether the client wants to employ the consultant;
• whether the proposed project will add value to the business; and
• what levels of risk both parties are exposed to by entering into a contract.
It is imperative for the consultant to apply sufficient time and energy to understanding the client representative as well as the problem. It is important to establish a solid relationship. The client–consultant relationship is the foundation stone that will support any future assignment.
Successful consulting is driven by the extent to which the consultant can get close to the client to arrive at a position where he/she becomes more of a confidant or trusted adviser than purely a supplier of services. How far a consultant can build a sense of rapport with a client before the consulting process begins will affect the degree of success of the outcome of the Simple Tools and Techniques for Enterprise Risk Management, Second Edition by Robert J. Chapman Copyright © 2011, John Wiley & Sons, Ltd.
assignment. Rapport is a multi-headed beast that needs to be tamed. The key components of rapport are:
• Rectitude: providing a supportive behaviour underpinned by company core values.
• Approach: a receptiveness to new paradigms of working.
• Problem: from the very beginning, seeking to view the problem as the client sees it, not as you, the consultant, see it.
• People: professional, experienced, personable consultants who achieve success through goodwill and a collective will to succeed.
• Outcome: establishing from the outset, by the use of questions, the client’s wished-for outcomes.
• Resolve: a determination to focus on the dominant issues and accomplish the assignment goals.
• Trust: the development of trust which is the cement that builds and sustains any client relationship.
28.2 CLIENT FOCUS
In any dialogue between the consultant and the client it will be important for the consultant to establish what is of vital importance to the client:
• Statutory compliance (employment law, health and safety legislation, etc.)
• Regulatory compliance (Sarbanes-Oxley Act, etc.)
• Maintaining shareholder value
• Corporate governance/internal controls (Combined Code 2003)
• Financial stability
• Market share
• Information security
• Business continuity
• Project risk management (project risk is related to corporate risk, since the profile of the latter will change if management invests in risky projects)
• Satisfying reporting requirements.
28.3 UNIQUE SELLING POINT
A “unique selling point” is a sales proposition that the competition cannot or does not cur- rently offer. It is one of the basics of effective marketing for consultancies that has stood the test of time. The consultant will be looking to differentiate him/herself from the competitors in what is commonly a crowded market place. The client will be wishing to understand a consultant’s general experience and competency, his/her standing (financial, insurance, repu- tation), whether he/she can adequately complete the assignment planned and whether he/she can offer something above the norm. Table 28.1 provides an example of a table constructed by a consultancy to describe its unique selling point. The consultants have gone through the common steps of identifying the features of their firm (step 1), converting the features into benefits that customers will value (step 2), ranking the benefits in order of importance on a scale of 1–10, where 10 is very important and 1 is insignificant (step 3) and identifying the benefits as being “standard”, “uncommon” or “different”, where “standard” represents
Interview with the Client 525 Table 28.1 Analysis of unique selling point(s)
Feature Benefit
Ranking (1–10)
Standard, uncommon
(few) or different Consultancy firm
General knowledge of the industry or sector (such as government departments) – commissions already completed for businesses in the same market
The consultancy has specific experience of the customers’
industry
9 F
Reputation in the market place The consultancy is well respected
9 D
Previous professional indemnity claims
Customers will take comfort that no PI claims have been made by other clients
8 S
Unresolved disputes Customers can be confident that, due to an absence of disputes, consultancy staff will not be distracted by participation in dispute resolution
8 S
Year of establishment The consultancy has been in existence longer than 5 years, the period thought to be a minimum for stability
7 S
Financial standing The consultancy shows consistent growth
7 S
Number of staff Customers can be confident that the assignment will be adequately resourced
7 S
Staff retention Customers can be confident that there will be minimal changes in personnel
7 S
Number of years of corporate experience
The consultancy has been in existence longer than 25 years, during which time it has accumulated a wealth of experience
6 S
Current workload Does not prohibit taking on more assignments
6 S
Location of offices The consultancy has offices across the UK
6 S
Price Customers will not see a
significant difference in price
5 S
Consultant Experience:
• Size (and/or complexity) of commissions completed
• Breadth of experience across different industries
• Number of years
Customers can see that the individual’s experience is highly beneficial to the outcome of assignments
10 D
Table 28.1 Analysis of unique selling point(s) (Continued)
Feature Benefit
Ranking (1–10)
Standard, uncommon
(few) or different General knowledge of the
industry or sector (such as government departments)
Staff have specific experience of the customer’s industry
9 F
Knowledge of the drivers of business success and failure in the industry or sector within which the organisation operates
The staff have knowledge of the reasons behind failure and success
9 F
Knowledge of the regulatory framework within which the organisation operates
The consultancy has knowledge of the regulatory framework
9 S
Approach to assignments Customers can see that the approach is highly beneficial to the outcome of assignments
9 F
Research into best practice The consultancy is continually looking at new publications, software and news reports
8 F
Qualifications Staff are very highly qualified 7 F
Ability to apply appropriate industry norm modelling tools
Staff are experienced in the use of the common modelling tools
7 S
Extent of published works Staff have published a number of papers and articles
5 F
features commonly offered by competitors in the market place, “uncommon” means just that (few competitors offer this feature) and “different” means unique. While many of the features have been marked as standard, their absence would preclude the consultancy from competing.
Also more than one feature can be awarded a 10, in terms of being very important.
28.4 PAST EXPERIENCES
To help establish what would be an acceptable approach to the assignment and to avoid repeating the actions of previously appointed consultants which were not well received, during the interview, consultants need to include in the conversation the following type of questions, without making it an all-out inquisition.
• What is the client’s previous experience of using consultants?
• What good results came from the experience?
• Were there any problems?
• What, if anything, would they seek to do differently this time?
• Do they have any fears or concerns about having consultants in the company now?
• Were there any communication difficulties?
Interview with the Client 527
28.5 CLIENT INTERVIEW
The meeting between the client and the consultant will afford the consultant the opportunity to ask a series of questions and gather important information. The seven Ss listed below (based on Cope’s seven Cs of consulting (Cope 2003)) are a series of questions to be posed by the consultant to enable him/her to learn more about the client organisation, the assignment and the client representative.
28.5.1 Scene/Overview
• What is the reason for seeking external support?
• Why is the assignment thought to be necessary?
• What are the implications of doing nothing?
• Who is the ultimate client (financier) and what is their level of “buy-in” to the proposed assignment?
• Which client representatives would be involved and where are they located?
• How will things be different or better once the assignment is complete?
• How will success be measured?
28.5.2 Situation/Context
• Is there an existing risk management process?
• What is the organisational structure and the relationship between the audit committee, internal audit, the board and the risk management committee?
• What are the roles and duties of the departments/committee involved in risk management?
• What are the principal gaps between these functions?
• Are the business objectives clear?
• What is (are) the group subsidiary relationship(s)?
• What changes are currently taking place in the business environment?
• What, if any, changes are currently in progress in the organisation?
• What major changes have taken place in the business over the last 12 months?
• Are there any concerns about factors that might impact the assignment?
• What concerns would any participants in the assignment have?
• Are there any side effects that could arise from undertaking the assignment?
• Who can stop the assignment from being successful?
• What are the unspoken or shadow issues that might cause the assignment to fail?
28.5.3 Scheme/Plan of Action
• What constraints are there on any proposed methods of working?
• What are the criteria for a successful solution?
• What is the budget and timescale?
• What has the client commenced already?
• What will be the availability of non-executive directors?
• What will be the availability of the functional heads?
28.5.4 Solution Implementation
• Who will be involved in the assignment?
• What will be the response of the intended participants?
• What methods will be acceptable to implement the solution?
• Is there a standard engagement/deployment process that will have to be followed?
• Are there any aspects of the assignment that will be managed by a third party?
• Where is the power to effect change held?
• Have those people who will not resist and those who will be the key influencers been identified?
28.5.5 Success, Measurement of
• How important is it for measurement to take place?
• Is the client prepared to pay for the measurement to take place?
• Are qualitative or quantitative measures required?
• How will the business’s buy-in to the change be measured?
• Who will understand the measurement?
• What measures has the organisation used in the past?
• How will the organisation measure the assignment’s performance?
• For how long will measurement continue?
28.5.6 Secure/Continue
• How long does your organisation want the change to last?
• Has the organisation tried this before, did it last and if not why?
• What can we do to help ensure that the change will last?
• Is your organisation prepared to invest in things that will make it last?
• Does your organisation have the resources in place to support any change?
• Are responsibilities defined to maintain the change once it is complete?
• Is there anyone who will try to eradicate the change once it is complete?
28.5.7 Stop/Close
• What does “good” look like?
• Once the change is complete, what differential value will we have added?
• What can be learnt from the assignment?
• How can this learning be used elsewhere?
• What can we do to ensure that your organisation is not dependent on us once the change is complete?
• What would we have to do for your organisation to recommend us to a colleague?
• What else might we be able to help you with?
28.6 ASSIGNMENT METHODOLOGY
The consultant will be required to spell out their methodology for the assignment. In simple terms, the methodology is the collective term for the activities that will be undertaken, the
Interview with the Client 529 sequence in which they will be carried out and the interdependencies. This might reflect the following path, depending on the requirements of the assignment: desktop study, review of methodology and background to the assignment with the sponsor, interviews and data collection, report writing, presentation of findings and finalisation of report.
28.7 CHANGE MANAGEMENT
To survive and prosper, most businesses cannot stand still but have to morph to reflect the evolving changes in the market place. As Stewart (1982) correctly summarises, the degree of change that businesses have to endure can vary enormously. For instance, for a top manager in a whisky distilling company, the only major change for several years may be the redesign of the label, whereas for a top manager in a technically innovating industry like electronics, change may be frequent and extensive. How managers react to change will have an important impact on a business’s future. The tempo of change has speeded up and hence the demands on managers to plan for and adjust to change are greater. The challenge is recognising the changes and understanding if they are a threat or an opportunity and how they should be responded to.
Risk management is a tool for coping with change. But it cannot be a once-only activity.
28.8 SUSTAINABLE CHANGE
To be effective, the changes that are implemented have to endure. Where organisations need external support to identify and implement the necessary changes (to maintain or improve business performance), effective consultancy support must deliver “value through sustainable change” (Cope 2003). The three factors that Cope describes as having to be present and managed to accomplish this goal are as follows:
• Change. A change must always take place. If the client or consumers do not think, feel or behave any differently at the end of the engagement, then what is the value? It is imperative that the consultant and client are both clear as to the change that is required.
• Value. There must be explicit value realisation. Only by understanding and taking respon- sibility for the change and the value derived from the change can the consultant and the client develop their capacity to repeat the activity and so enhance performance further at a later date.
• Sustainability. There is little point in making a change that has value, if it does not stick.
This is at the root of problems with so many change programmes. The consultant and client may enjoy their shared working experience, make amazing leaps in performance, celebrate their success and then move on, only to find that little value remains three to six months later.
Cope goes onto say that “by looking at the change engagement as a battle of reinforcing and representative forces it becomes easier to map and measure what factors will enable the change to live beyond a short-term fix and deliver value through sustainable change”. The primary determinant that drives any successful outcome will be the balance between the repressive forces that cause the client and business to revert to the old way of operating and the positive forces that help them hold onto the gains. The key parties within these opposing forces are likely to be members of the sponsor group, employees or members of the end-user group, as illustrated in Figure 28.1. While every assignment will have its own unique characteristics, it
Existing Condtion
Change Process
New Condtion
Repressive forces (constraints)
Reinforcing forces (enablers) Sponsor
Employees
End-users
Sponsor
Employees
End-users
Figure 28.1 Influences on a change process
is recognised that there are a number of repressive forces that occur time and time again which either threaten or cause the derailment of an assignment to deliver sustainable value:
• The client does not fully appreciate the current position and is unwilling to make the changes identified as necessary.
• There is a failure to understand the root causes behind the current position.
• Those affected by the change are not helped to work through the pain of letting go of the former methods of working.
• There is no accurate measurement and confirmation that the change has delivered the desired results.
• When the assignment is over, and the pressure of work returns, staff revert to the methods of working that they remember, understand and are comfortable with.
28.9 SUMMARY
The focus of this chapter has been on the first meeting between the client and the consultant who may be engaged to provide risk management support. It has examined the importance of this first meeting during which those very first impressions are formed and both parties decide whether they wish to develop the working relationship. It is important for any consultant to establish what a client’s specific focus is, what is important to them and how much it means to their business. The consultant has to understand what their unique selling point is and the client needs to understand a consultant’s core competencies and what they can offer over and above their competitors. As part of the interview, the consultant needs to blend into the conversation, without making it too intrusive, questions about the client’s past experiences of
Interview with the Client 531 the use of consultants, to avoid repeating those actions which would not be well received. The client interview, it is suggested, should follow a pre-planned sequence covering the subjects addressed under the headings collectively called the seven Ss. A lot of reference has been made to change, as risk management involves undertaking new processes and activities and approaching problems in a more systematic way. At this stage of dialogue with the client, the consultant would need to consider the methodology that would be likely to be adopted, and there are a series of steps that are commonly selected. Any assignment on its own (or when it forms part of a programme) forms a change process. For the assignment to contribute value to the organisation on whose behalf it is being conducted, it must contribute sustainable change.
28.10 REFERENCES
Cope, M. (2003)The Seven Cs of Consulting: The Definitive Guide to the Consulting Process. Pearson Education, Harlow.
Stewart, R. (1982)The Reality of Management, revised edition. Pan Books, London.