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Can Management Consultants Solve All of Life's Problems?

by Ling Lin, February 14th 2013  

Ever wondered exactly what management consultants do?

In a world of constraints (whether it's resource, time, or money), the industry of management consulting exists for one fundamental purpose: to improve the performance of companies by leveraging the consultancy's knowledge, experiences, and resources.

With this in mind, there are 5 common reasons for hiring management consultants.

Reason #1: Crisis Resolution

Companies often bring in external consultants when there is a problem or an impending crisis. This could be delays in their product pipeline, missed financial goals, or consistently not meeting regulatory requirements. Consultancies have the resource capacity to conduct organizational-wide interviews and objectivity (See Reason #4) to glean information from those discussions to get to the root cause(s) of the issues.

Recently, one of our clients shared with us his dilemma that one of his manufacturing facilities had been experiencing delays getting their products to market. We spoke to their plant managers, Marketing VP, R&D VP, and other leaders, and saw that the reason they'd been missing launch deadlines was largely due to confusion in project priorities, as different leaders communicated different priorities to plant managers.

Reason #2: Advisory

Companies often rely on management consultants for their knowledge of industry best practices, e.g., how to enter a new market or how to apply a new manufacturing procedure. Consultants' exposure to different industries means that they have seen what works and what doesn't. For example, throughout the years that Philosophy IB has been in business, we've seen how high-performing organizations in the pharma and consumer healthcare/packaged goods industries operate and what the common pitfalls are. But it is also important to note that the strength of one company may not necessarily be that of another's. Developing solutions that combine industry best practices while addressing the specific needs of an organization is what distinguishes good consultants from the not-so-great.

Reason #3: Staff Augmentation

Companies may hire consultants to augment their staffing needs. For example, Philosophy IB supplies project management services to our clients. From the procurement standpoint, Managers sometimes find it easier to hire consultants than to go through the process of getting approval to hire full-time employees. Philosophy IB's consultants have acted as interim Project Managers to fill temporary gaps and to lend a hand to an overburdened project management organization.

Additionally, clients may lack the time and/or expertise to improve how they work. As such, consultants may be brought in to improve business processes, enhance team-working dynamics, or coach leaders.

Reason #4: Objectivity

Consultants offer a fresh perspective and critical eyes to identify your barriers to success. They can help assess your product pipeline, review and prioritize your portfolio, resolve conflicts in team dynamics, and so on.

Consultants can also be an impartial voice to Leadership to communicate sometimes politically-sensitive issues. Because the nature of the job requires a people-centered, customer-focused mentality, consultants are often experienced in dealing with office politics and navigating through difficult political terrains.

Reason #5: Emotional Support

Leadership can be a lonely role. As Kaveh Naficy, one of the partners at Philosophy IB, wrote in his blog Leadership Crescendo, a leader's loneliness can be caused by "making difficult and principled decisions in the service of the enterprise that are not always popular with a majority of stakeholders." One of the competencies of outstanding Leadership is "pushing through the loneliness, in the service of the future vision and rewards awaiting the enterprise. Being less concerned about being liked and popular, and more energized by the respect of colleagues."

At times, our clients, many of whom are outstanding leaders in their organization, just need emotional support and someone to bounce ideas off of. It may be easier to do this with an executive coach or a trusted partner in a consulting firm outside the organization who is not as invested in the leader's ultimate decisions.

How to best utilize consultants

Consultancies are a unique business in that most of new business is through word of mouth. Because of this, the consultancy's success is inherently linked to the client's. Knowing what consultants are commonly used for, you can begin to think about how to leverage them to further your career. If you are currently working with a consulting firm, have a conversation with your consultant that starts with: "My goals for this year are X, Y, and Z. How can you help me achieve them?"

So, maybe consultants can't solve all of life's problems, but they can certainly be of help when it comes to improving your business and your people.

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Leadership Crescendo - Reflections and thoughts on leadership learned after thirty years of thinking about, experiencing, teaching and coaching executives for leadership effectiveness, written by Kaveh Naficy