What Does a Strategic Finance Consultant Do?

In a previous article I explained the high-level differences between consultants, fractional leaders, and interim executives. Each type of support is the right fit for different types of organizational challenges.

Let’s revisit the definition of a consultant.  They are brought in to accomplish a specific objective. The work they do is temporary in nature, has a defined outcome, and operates within clear constraints such as time, cost, and scope.

Simply stated, consulting is project work.

Organizations benefit from a strategic finance consultant’s expertise when they need specialized knowledge and skills or additional capacity to complete an initiative that falls outside the normal rhythm of the finance function.

Several characteristics tend to define consulting engagements.

A clearly defined outcome

A consulting engagement should have a specific objective and a clear definition of success.

In finance, those objectives often include projects such as:

• Building or redesigning a financial forecasting model
• Supporting the implementation of a financial system
• Evaluating internal controls
• Assessing financial processes and recommending improvements

Each of these projects has a well-defined deliverable. It’s measurable and you can tell when it’s been achieved.

Temporary in nature

Consulting engagements are designed to end.  The timeline is usually predictable in length. Although we all know to add 30% to 50% on to the consultant’s estimate due to unforeseen circumstances.

This structure allows companies to bring in expertise exactly when it is needed without expanding the permanent leadership team.

Clear constraints

Consulting work operates within defined parameters. The scope of work, expected timeline, and project deliverables are typically established before the engagement begins.

Those constraints help both the organization and the consultant stay focused on the objective.

When the scope and expectations are clear, consulting engagements tend to run smoothly.

When they are not, challenges often emerge.

Common challenges when hiring consultants

Many organizations have mixed experiences with consulting projects. The difficulty usually begins with how the project was defined.  Frustration, disappointment, and failure can be reduced by spending more time deliberating the project deliverables and guardrails.

Even when a project is well defined, another common challenge can appear: scope creep.

New information can be uncovered that requires legitimate changes to the scope.  But, more often scope creep happens because people start “what iffing” as they see the project take shape.  Their excitement spurs new possibilities and that can result in losing focus on the original intent.

Another challenge occurs when organizations begin to lean on the consultant to provide leadership to the department.  It’s natural to want to take advantage of the expert knowledge and skills of the consultant, but that’s not what they were hired to do.

Consultants may advise the leadership team and interact with internal staff, but they are not responsible for running the function. Their responsibility is to complete the defined project.

Expectations need to be clear and boundaries respected to avoid as many consulting pitfalls as possible if you want the project to be completed successfully.

What to consider before hiring a consultant

There’s a short list of things leaders should work through before starting a new project.

• Define in detail the objective and deliverables. Focus on the end state and not the process, that’s for the expert to shape.
• List the non-negotiables vs. the nice to haves and get alignment from all stakeholders.
• Define the project and consultant boundaries (decision authority, leadership responsibility, etc.)
• Determine the skills and experience needed in the consultant you want to hire.

Bringing the right expertise into the organization

Consulting plays an important role in helping organizations tackle complex financial initiatives.  As with any hire, success or failure is determined by finding the right person for the role.  This is why it’s important to determine what skills and knowledge are needed to successfully complete the objective.  Stay focused on what’s needed when hiring your consultant.

When the objective is clear and the scope is well defined, consulting engagements can deliver significant value.

Helping organizations define the scope of complex financial projects and determine the right expertise to bring in is a conversation I have frequently with CEOs and boards. If you are planning a consulting engagement and want to get the scope and selection process right from the beginning, feel free to reach out.