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Tips and Answers to Your Questions
Human Resources
Should You Hire a Consultant for Your Strategic Restructuring
Process?
As your organization begins to consider strategic restructuring, one of the
questions you will be faced with is whether or not to hire an outsider - a
consultant - to help facilitate the process. This is a difficult question for
many nonprofits. More often then not, funds are scarce, the process has lots
of known and unknown costs, and the added expense of a consultant can seem
daunting. You might have a professional facilitator on your board, or there
might be one on your potential partner's board, either of whom could potentially
do the work pro bono. Or it may be that the organizations know each other well,
with the executive directors and/or board members having worked together successfully
in the past, and thus you don't foresee any problems in putting the strategic
restructuring effort together.
Regardless of the reason for your hesitation in hiring an outside consultant,
there are several advantages to doing so that you should consider.
- Neutrality. The first step of the negotiation process is the identification
of all issues that will need to be addressed and resolved before the parties
can agree to go forward with the partnership. Each of these issues will need
to be discussed, negotiated, and agreed upon. While some issues will be easily
resolved, others will be very difficult. Getting through these discussions
can be tough, and if the person leading the discussions is at all perceived
as siding with one side or the other (whether or not they truly are), the
process will be much more difficult. An outside consultant who has been hired
by both (all) parties can be the needed neutral entity to lead the parties
through the minefield of negotiations.
- Experience. One of the primary advantages of strategic restructuring
is that it allows organizations to find creative solutions for strengthening
their services and reaching their goals. Using a consultant with strategic
restructuring experience can help enhance the level of creativity used to
accomplish a strategic restructuring effort. Most executive directors and
board members have had little direct experience with strategic restructuring.
Bringing in a consultant who knows the field well allows you the benefit
of such experience. He/she will be able to offer a variety of possible solutions
to problems and issues, point out important milestones or issues that might
otherwise be overlooked, and bring forward examples of other successful strategic
restructuring efforts. In doing so, he/she can help you create the best possible
partnership or new organization.
- Timing. Very often organizations spend a great deal of time talking
about pursuing strategic restructuring, but are never quite able to make
it happen. Potential partners may talk about it and meet about it, and talk
about it and meet about it, and… Sound familiar? We have worked with
organizations that have been talking and meeting for as long as 10 years.
There are many reasons such processes can drag on for so long. Perhaps the
executive directors or board members who are trying to lead the effort are
facing many other pressures and demands, and simply do not have the time
to manage the details of a strategic restructuring project on top of their
regular jobs. Or perhaps the issues that need to be resolved are those on
which it is difficult to reach consensus, and resolution keeps being postponed.
In still other cases, internal facilitation efforts may break down when things
get difficult, and the facilitator is seen to be favoring the interests of
one party or another. Regardless of the reason for delay, an outside consultant
can help move things along. His or her goal is to bring the negotiation process
to the best possible outcome (regardless of what that outcome is) as quickly
as possible, and thus he or she will keep you moving forward. The consultant
is typically hired to coordinate the meetings and write/distribute the minutes
as well as to facilitate the process, making less work for others. While
staff and board members will need to be involved with due diligence and other
such "homework" items between meetings, the consultant can help
coordinate the work, taking the burden off of executive directors or board
members. Most importantly, the consultant can help guide those discussions
that are necessary but difficult, and bring them to conclusion.
If you decide that hiring an outside consultant is the right way to go, there
are a couple of things you should keep in mind:
- We recommend against using an attorney as a primary consultant. Attorneys
tend to have a more adversarial approach to facilitating - win/lose as oppose
to win/win (see May 99 tip). For a successful strategic restructuring effort,
you really want to reach agreement based on consensus and a mutual belief
that a fair process was used. This may not always be the result if an attorney
is used. Additionally, most of the decisions being made during negotiations
are not specifically legal decisions, but instead deal more with management,
governance, mission, programs, etc. Although there is definitely a role for
attorneys in strategic restructuring processes, their advice will typically
not be needed until toward the end of negotiations, when it is time to decide
on a final legal structure for your partnership and file any necessary paperwork
to implement it. Before that point a management consultant specializing in
strategic restructuring will have more insight into and experience with the
issues being raised and negotiated.
- If money is an issue in hiring a consultant, consider approaching your
traditional funders for assistance. Taking on a strategic restructuring effort
demonstrates an organization's commitment to improving the organization's
effectiveness and ability to fulfill its mission, something many foundations
look for in funding opportunities.
Finding a consultant experienced in strategic restructuring may not be as
easy as finding one whose specialty is in a more common area, such as fundraising
or strategic planning, but such individuals are out there. Check with the foundations
from which you typically receive funding; they may have had other grantees
pursue similar projects, and might be able to recommend names. You can also
check with your local community foundation or management support center. Several
of these have started initiatives around strategic restructuring or strategic
alliances in recent years, and even those which have not may be affiliated
with consultants who have strategic restructuring experience. Lastly, talk
to the leaders of other nonprofits who have gone through a strategic restructuring
process and find out about their experiences. If they used a consultant, how
did it go? Is this someone they would recommend? Do they have any other tips
or advice they can give you?
Good luck!
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