Choosing a Management Consultant: Part 2 of 5

Posted: Sept. 1, 2017, 3 p.m.

Choosing a Management Consultant: Do I REALLY Need a Consultant?

This post is the second in a series of five that explores the steps in hiring a management consultant. To read part one, click here.

Effectiveness Consultants's guide to determining whether you need a management consultant in the first place  is part 2 in a series of 5.

It's not unusual for me to talk with someone at a mixer or corporate event—or even someone that has the potential to become a client—only to discover they don’t truly need my services or an organizational consultant at all. Some consultants might tell just about anyone they need consultation services just to make a sale, but I'm not of that mindset. This post explores those times that organizations think they need a consultant and offers arguments for why they don't. 

Reason 1: Someone wants change just to be changing.

Let’s start with a story. Years ago, one of my business partners and I met with the Managing Director (MD) of a local manufacturing business, Bob*, who we knew quite well. Bob sat down with us and said “I need your help to change the organizational culture of my business." We immediately responded by asking “Why?”—as management consultants are wont to do.

*Name changed.

Bob's answer was full of platitudes and vague descriptions of how important workplace culture is. The thing is, we knew the company Bob worked for was performing very well. Sales were robust and were increasing year over year; employees were engaged; turnover was low; and profit margins were trending above industry standards. Most importantly, we saw no reason to expect changes in the future.

My partner pointed this out and said “I'm unclear what you want to accomplish. What benefit would an adjusted culture offer?”

Bob finally admitted what was truly driving his interest was a change initiative. He said “Listen, I've been part of this mastermind group for the last year and almost everyone there has these great stories about the major cultural change efforts they have undertaken, and I feel like I'm missing out.”

Needless to say, my partner took the time to point out how risk-filled and resource-heavy change initiatives were and even got Bob to start seeing the benefits of his current organizational culture.

Though this first story does speak to the positive change business coaches and organizational consultants can bring to an organization, it offers the first example of when you don’t need a consultant. We often think we need to change based on comparing ourselves to others when in reality, we should look internally to see if things are meeting our own goals and expectations. Admittedly, we can use industry comparison to set our expectations, but we should never do something simply because it is popular or “seems” like a good idea. We must take the time to assess our needs first and then determine solutions. 

Moral of the Story: seeking the status quo is only bad if the status quo itself is bad.

Reason 2: Workplace issues are the cause of a toxic team member.

Another story helps demonstrate this reason an organization might seek out a management consultant. A while back, I was asked to work with a small restaurant chain. This chain operated six stores in three different cities. The owner had started the first one, which she still ran, and had general managers placed in each of the other locations.

She called me to talk about one specifically that continually had problems. Profit margins at this location were below expectations and the staff was disgruntled—and leaving in droves. She couldn’t figure it out. She kept meeting with the GM and the other managers but nothing changed.

“This GM has been a friend and worked for me for 15 years, so I know she is doing everything she can to make things work," she said.

My guess is many of you reading this already know what the problem was: the GM. She was burned out and not doing her job effectively. At the end of the day, it was much worse than we thought. She had been paying a boyfriend that wasn’t working the hours at her location. She continually hired a repair person to “fix” things that were not broken who shared the repair cost with her. Those are just a few instances of the owner's realization that her long-time friend was a big-time liability.

The owner didn’t need a consultant—not really, anyway. A secret shopper, maybe—someone to look closely at the books with a clear eye, perhaps, but not a management consultant. She ended up letting the problem manager go and working with the other staff members there. She turned that location around in less than a year.

Moral of the Story: Sometimes it's just time for someone to go.

Reason 3: The talent and capability needed is already available in-house.

Final story—I promise. I once met with the COO of an up-and-coming software company. She wanted to build a supervisor training program (something I love to do as a management consultant) and asked if I would be interested in working with them.

I responded that I would love to, but that first I would need to take some time to assess what they needed and then bid it properly. The first thing I discovered is that they already had some internal folks executing training for their end users, which they used for training newcomers as well.

Then, in interviewing one of these trainers, I found out they had a person on staff that not only had leadership training and development in the past, but that they also had a Ph.D. in education and an MBA. More to the point, this person was hurt and angry that I was being considered at all for the training program.

Long story short, I was able to work with this person to develop a fantastic supervisor/leadership training program that the individual ended up heading up, which made staff and management happy with the end result and saved thousands of dollars in external consulting fees.

Moral of the story: Look inside before looking outside. You might realize you've been overlooking someone's talent.

Reason 4: The fix costs more than the benefit.

The squeaky wheel gets the grease. Most of us have heard this phrase, but there is an implication to it that we often miss. Just because something is squeaking does not mean it is the most important thing to fix.

I once worked under a manager that told me every single day he thought we needed to market more. He insisted that if we put out more ads on the radio and in the newspaper that we would see more business. The problem is that these are not cheap solutions. Would we get more business if I spent thousands of dollars on traditional advertising? Probably, but there were two other things to think about.

One, would we have an ROI that made the expense worth it? And two, were there other ways we could spend that same money that would work better?

After much discussion, we spent that money on things like joining our local Chamber of Commerce and signing up for networking groups. We sent that manager to all the meetings. The result was that we enjoyed a significant increase in sales that far outweighed even what he proposed would be the ROI from the traditional advertising.

Always look at the cost of the problem and the cost of the solution and make sure you are coming out ahead. Sometimes we can deal with a squeak that doesn’t detract from the quality and quantity of our output and our employee satisfaction.

Moral of the story: Just because something works doesn't necessarily make it the best solution.

Reason 5: You are the problem. Are you willing to change?

This final reason people often seek out management consultants when they don't actually need them can be the hardest to deal with as a consultant—and as a client.

One of the best stories my dad used to tell about his time spent being a consultant in Africa was about the time he was physically carried out of a large manufacturing firm and placed outside the front door—by the CEO!—for pointing out the firm's issues might be due to the CEO himself.

I too have seen this. I recently worked with a company that had for years been a small family service company but landed a huge contract. They struggled to adapt, and although they appeared to externally, they were a mess internally.  There was no structure. The family still ran the company as if it were small, but it was now a $50 million company with 500 employees. No one knew who to ask for what or who was making decisions.

So, I sat down with the executive team. I pointed out that the biggest issue was that if someone didn’t like the answer they got from the dad, they could go to the daughter and get a different answer. It wasn't sustainable and they knew it, but they were reluctant to truly see that they were the cause. It was only after they lost some key employees and a substantial contract that they called me back in to help them break free of their egos and face the needs of the organization.

Moral of the story: stay out of your own way. And when it comes time to choose your ego or your business, choose your business.

So, when should you bring in an external consultant?

You should consider bringing in a management or organizational consultant when you experience any of the following issues:

  • You have a problem and you don’t know why it's happening—or you can't even pinpoint that the problem is. sometimes even what.
  • You're experiencing turnover and employee satisfaction issues.
  • You have or can anticipate a problem that you are not currently equipped to handle.
  • You are willing to embrace change if it's called for, including letting people go or changing your own workplace habits.
  • You have some internal resources, but need to either bolster or develop them.
  • The cost of addressing the issue at hand does not outweigh the cost—and consequences!—of not addressing it.

If you're experiencing any of those issues or have another one that you think expert organizational consulting can solve, Effectiveness Consultants is ready to take your call. Reach out to us at 805-770-2659.