It´s a jungle out there. There are vendors for everything. Consultants, advisors, strategists, specialists, experts and developers. All of them  telling you how amazing they are and how they easily can solve all your problems.

The reality is that success requires lots of hard work and that ability to execute is more important than fancy words(Research indicates that 70% of strategies fail, source: Tribal Leadership).

Don´t misunderstand. External vendors can help you, but it´s important to be critical and show common sense. Remember that vendors are normal people – they are not super heros. Use consultants to bridge knowledge gaps in your organization and to help you get things done faster and smarter! Don´t let them run your organization and don´t outsource your core competencies for too long!

To help detect the bullshiters among vendors, We´ve put together a list of critical questions that you can ask potential vendors.

1. Which recent project are you proud of? Explain the results, why you´re proud of it and why it´s relevant to me.

It´s a warning signal if a vendor can´t think of a project they´re(the person that will help you) proud of! Most people love to talk about things they´re good at(and it´s not a bad thing). If a vendor is good at something, you want to benefit from it! They should be able to share specifics about what it is – of course without revealing sensitive client information. Many companies will be happy to share success stories if you ask as long as it´s not benefiting their direct competitors! When people talk about things they´re proud of, it´s easier to sniff out what is important to them(values). If their values match with what´s important to you, there´s a good chance that the partnership will be successful!

If the vendor is proud of something that cost alot of money without delivering success for the client, you should be sceptical!

2. What can YOU help me with? And how will we work together to get the best results?

“Do what you do best and outsource the rest” is a well-known phrase. You use consultants because they´re good at something that you are not good at. Make sure the vendor is open about sharing knowledge with you! That does not mean that you should require your vendors to share their trade secrets. It merely means that you should enter into and open win-win relationship where information and knowledge flow freely to increase the probability for success! Remember to ask the vendor specifically who you will work with and how they run projects.  There´s a huge difference between working with an experienced person and a person fresh out of school. In some instances, it´s an advantage to work with an inexperienced person, but you should not be paying the same price!

Don´t accept a junior if you´re paying for a senior!

3. How do I pay for your services?

Don´t focus too much on money(ref. 8 secrets of success), but it´s important to get a ballpark number or a general idea of how much it will cost you. If the price seems too good to be true, it usually is. If putting together a Facebook strategy and running your Facebook site costs $750, you should think twice or at least ask how many days the agreement will last. Most consultants work with a standard hourly rate. If the hourly rate is $250, you can expect 3 hours of work. If they promise you more than this without explaining how they can run a sustainable business, there´s a great risk that you´ll be disappointed. They may have other revenue streams that can explain a low initial price, but you can be quite sure that you will be paying for it at some point. Good people know their value.

When you ask consultants for help, make sure you understand what they intend to do and ask them how long it takes. In some cases, it´s impossible to say how long something takes. In these cases you should ask for a rough estimate, an estimation period and/or stay in close dialogue with the consultant to ensure that you´re moving in the right direction. If you want a result-oriented deal, make sure it´s good and realistic for both you and the consultant.

If you pay peanuts – you get monkeys

4. Why should I choose you? Who else should I consider?

Warren Buffet once said “The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective.” Ask the vendor  why you should choose them. If they can´t answer the question or if they are reluctant to name competitors, you should get your guard up. Spend time to get to know eachother and don´t accept complex answers from vendors! If you´re a vendor, try to simplify as much as possible. Remember that you´re the expert. It´s your responsibility to help the client! If you´re a client, make sure to read up and get a basic understanding of what´s going on. Knowledgable action-oriented people working together deliver superior results!

Any fool can make things bigger, more complex, and more violent. It takes a touch of genius-and a lot of courage-to move in the opposite direction.

5. How will we measure success?

It´s not easy to agree on what should be considered a success, but it´s smart to discuss expectations and WRITE them down in the beginning of the relationship. Managing expectations is one of the most important factors in a successful consultant/client relationship (thanks Jeremy). With modern web analytics, it´s easier than ever to measure success. If you´re an e-commerce store, you can measure online revenues, conversion rates and agree that the client will be happy with an X percent increase. Some things are difficult to measure and not everything that matters can be measured. In these cases, an open discussion on desired outcomes can be beneficial. In many cases some critical success activities are outside the control of the vendor. This should be taken into consideration.

Not everything that can be counted counts, and not everything that counts can be counted.

Sources:

• Why consultants generally suck (CNN, May 2000)
• 8 secrets of success (Ted.com, Dec 2006)
• Warren Buffet infographics (Squamble, Jun 2012)
• Measuring success (37 signals, Sep 2009)
• Albert Einstein quotes (Random Stanford student)
• Managing Expecations (Jeremy Alexander at my first job in 2001)
• Ideas are just a multiplier of execution (Derek Sivers, Jul 2009)