Traditional consulting refers to business consultants who require a substantial upfront fee with no guarantee of positive results. These consultants can essentially provide no value to a business and still get paid for their service. It’s unethical, and it’s bad business.
Fortunately, there are other consultants who base their compensation off of the positive impact that they have on other businesses. What are these types of consultants called?
Well, a few terms refer to them, most common of which are performance-based consultants and results-based consultants. But, are results-based and performance-based consultants the same?
Are Results-Based and Performance-Based Consultants the Same?
It depends. It depends on what results and performance each refer to. If they both refer to the same measurement of success, then yes. Otherwise, no.
For example, let’s say that a business consultant specializes in marketing. If both the consultant’s performance and results refer to the additional revenue that it helps a business generate via its marketing strategies, then the terms are interchangeable.
However, what if the business consultant’s performance instead refers to their effort or the implementation of their marketing tactics? Meanwhile, their results continue to refer to their clients’ financial gain.
In this scenario, performance is not determined by an increase in monetary value, but rather the completion of the business consultants’ services. As a result, the measurement of the business consultants’ success may vary wildly because the two terms are blatantly different.
Performance Must Be Defined
As it relates to business consulting, performance may be interpreted in two distinct ways. It may mean the process by which a business consultant carries out their services. Or, it may refer to both their services and the impact of their services on the clients’ business.
This is the determining factor.
If a business consultant’s performance only refers to their actual work and the implementation of their strategies, the journey, then it is difficult for performance and results to be one and the same. There is far too much variation in performance to be associated with the very concrete results.
Yet, if performance refers to not just the act of the service being done but also the implications of that service, then the two terms are synonymous.
For further reference, performance-based consultants and results-based consultants are equivalent here.
For performance-based business consulting, contact The Business Turnaround Group.