Comparing Apples, Oranges and Grapefruits

In today’s healthcare consulting marketplace looking at different consulting firms to work for can be like “Comparing Apples, Oranges and Grapefruits”; not easy and everyone’s taste is different.

The good news is there is lots of demand out there due to the push to meet the Meaningful Use deadlines... the bad news is that it won’t last forever and the schedules are very demanding. When looking at consulting firms to join it is important to make sure that you select a firm that fits your style, personality and that will last in good times and in bad. Unfortunately there is no “Match.com” to help you sort it out... like that works all the time.

There are several key factors to consider when selecting a consulting firm:

Company Size - The size of a company is a bit of a dilemma:

  • The big company (generally over $500 Million in revenues) seems secure and safe…and then someone buys them, they miss a quarterly number to Wall Street and lay off 1000 people. On the other hand they have the money to invest in building a large brand; huge sales and marketing teams; invest in bench resources for very large engagements. Most large companies tend to weight their compensation structure heavily on base salary which can limit both the downside and the upside earnings potential. Generally there is an office to go to; a headquarters to visit…but there is usually a price to pay in terms of the personal relationships, individual employee flexibility and naturally evolved bureaucracies.
  • The medium company (generally $50 - $500 Million in revenues) has obviously had success to get to this point and represents a small segment of the overall consulting companies out there as most companies choose to stay smaller or they choose to go big and acquire other companies or sell to one of the big ones. Like any situation, knowledge is key to your future as you don’t want to be on the tail end of the company life…you want a place where you matter and you are not just another cog in the wheel of the company’s growth plans. These companies have the positive and negative characteristics of the big and small company…you have to dig to find out what the balance is.
  • The small company (generally $10 - $50 Million in revenues) has had good success to reach this stage and has got something figured out to make and sustain this level. Determine what the company’s strategy is and how they plan to grow the company or not. There are many companies in this segment and they can be a great place to be if they have the right management, culture and capitalization; on the other hand if those attributes are not there you might end up in a “churn ‘em and burn ‘em” environment that is good for the owners but not very good for you. Generally you find more experienced people in these companies that are confident in their career choice as a consultant. Compensation is more weighted toward pay for performance so there is more upside opportunity based on your proven track record.
  • The startup or stalled company(less than $10 million and frequently under a $1 million in revenues). Companies in this category have a fate that is undetermined, especially in the consulting world where the cost of entering the market can be very low. Many people try and start up a company but quickly learn that just because you are good consultant does not mean you can build a business. Be very careful in this segment as many of these companies have a very impassioned leader…sometimes because they are genuinely passionate and other times they are desperate to keep the business alive. The key is to know the principals in this company personally and not over one meeting…if you go this route make sure it is with someone you know and trust over several years.

What is Management's plan for the company? - Nothing is more devastating than joining a company and having it sold out from underneath you. No matter what the company size is, understanding management’s motivation is critical to your future. Here are some clues:

  • Look at where the management has come from and what their track record is (if they have sold before they will sell again).
  • Read what they say in the press or on earnings calls if they are public. The more a private company talks in the press the more they are looking to sell.
  • Does the company have significant debt? Are there Venture Capitalists on the board? If so, it’s going to be sold, merged or abandoned if it does not meet the hurdle rates.
  • Meet the management team in person and ask the hard direct questions…direct personal knowledge is critical to making the right choice for you.

Market Segment Served – Is the company broadly or narrowly focused? Understand the company strategy for this decision as it will be critical to its execution and their ability to keep you working all the time.

  • A broadly based company can be good if you have the broad based skills or the company has a commitment to retool you if the segment you are expert at goes soft and then you can get redeployed to another segment, so you stay working…on the other hand, it can create a dead end.
  • A narrowly based company can be good if the segment chosen is robust and has a long runway; you and the company develop a high quality reputation as the go to experts in the space and are always working…on the other hand, if the segment goes soft it can create a dead end.
  • A company that does not know what market it serves should be avoided at all costs…it is a dead end.

Financial Stability and Company History – No matter what size company or what stage, this stuff matters.

  • If it is a public company read the 10K for the current year and one or two back as well. There is a lot of good information in here that you will not get through the recruiting and interviewing process. The more research you do the better informed you will be to ask the right questions…this shows attention to detail and interest in the company, which should always be appreciated by the hiring company.
  • If it is a privately held company there is no substitute for talking with the owners of the company. Many times as a privately held company they will not share actual financials but you should get as much financial detail as possible as well as understanding the ownership of the company; debt and cash position; receivables (always a good way to see if customers are happy) and understand how the company measures success.

Culture – Saved the most important for last. Never underestimate the value of company culture. By understanding the company culture you will understand how the company will react during good and bad times. There are many aspects to culture but talking to the employees of the company doing the job you are interested in is one of the best ways; then talk to the customers; and talk to multiple people in management (hint: they should all be on the same page).

Once you have sorted through all of this then you will know…Do you like Apples, Oranges or Grapefruits? Hope you get something that tastes good and you enjoy for a long time.