What can companies do to ensure smooth and profitable relationships with consultants? CIO asked two experts: Bob Nelson and Peter Economy, co-authors of Consulting for Dummies (IDG Books Worldwide, 1998).

CIO: What mistakes do companies commonly make in selecting a consultant?Economy: One of the biggest mistakes right off the bat is hiring a friend of a friend. When a company has a need for a consultant and somebody says, "Oh, I know somebody who can take care of that for us, let me give him a call." That's a real common mistake. I've seen that a lot out there in the business world-a friend of a friend comes in and doesn't really do a good job.

CIO: How can a company tell if a consultant really has the resources to service its account?Economy: References are the best way to do that. Whenever I look for a consultant, I always ask for references, and I want real candid, honest, complete references. I want to know if they were able to service the client well and if the resources were there to service them expeditiously and with some talent.

Nelson: The best predictor of future performance is past performance. Ask the questions: "What other clients have you worked with that have experienced this problem? What did you do for them, and can we talk to a few of them?"CIO: What's the key to maintaining financial and managerial control of a consulting project?Economy: The key is to work very closely with your consultant. You should have a very clear picture of what you want that consultant to do. Make sure they understand what you need done, get it in writing, set boundaries, set financial limits, set milestones of progress. Make sure that you're meeting with that consultant on a regular basis, whether it's daily or weekly.

Nelson: Have that be part of the contract for the work. Try to stagger [payments] over the course of the work, so that when a deliverable is made a financial payment [is triggered]. State very clearly that all payments are subject to 100 percent satisfaction.

CIO: In your book you discuss the consultant's "personal code of ethics." In your opinion, what is the most important ethic that should guide a consultant?Economy: The real tendency of consultants is to make a problem when there's not a problem. It would be amazing to see a consultant walk into an organization and say, "You know what? You're doing things great! This is perfect; you don't need me!" That's all too rare. I think the most important ethic is honesty.

Nelson: I'd agree.... Truly an ethical consultant will, from the get-go, keep the onus on the client to learn [how] to solve the problem-to set them up for the day when [the consultant is] not around.

CIO: What does the prototypical consultant say to his or her reflection in the mirror every morning?Economy: A consultant has to have a pretty strong ego. I think they look in the mirror and say, "Damn, you're good!"Nelson: I worked with Ken Blanchard [co-author of The One Minute Manager] for 12 years, and one of his sayings that I loved was, "Don't let your ego eat your brain."