When Do You Need A Strategy Consultant?

1252 reads

There is rarely a CEO or entrepreneur who has never felt the need for advice. The majority, however, do not engage consultants. They try and figure things out by themselves, sometimes not so well.



In my consulting experience of nearly fifteen years I have found CEOs seek out experts in four distinct situations.



1. Need expertise?

The firm needs expertise they don’t possess. The company wants to implement a new quality, or performance management system. An upcoming plant requires new layout, a new digital media strategy needs crafting, introduce Kan-ban to deliver goods to customers on JIT basis, are the typical situations when firms engage experts.



2. Sounding board

Not infrequently, CEOs need a sounding board: someone who will spar with them on a difficult decision. Savvy leaders know that a narrow perspective from being close to the action inhibits expansive thinking.
 
 
They recognise they may be susceptible to bias and are unaware of it. An impartial observer, especially one with wide experience, can be invaluable in facilitating an objective and rigorous evaluation of choices.



3. When in trouble

It is harder when the the firm is in trouble. The business may have lost its edge owing to internal constraints or external circumstances. Revenue and profits are headed south. None of intiatives have helped in stemming the slide. That is when some leaders wonder if they need outside help.
 
They also face a big dilemma. Is it wise to spend on a consultant – good ones don’t come cheap – in times of aggressive cost cutting, layoffs and austerity? Many firms do not engage an advisor even when the situation is dire. Leaders that seek help are men and women with strength of character.

 
The case of Mindtree 

In 2011, circumstances in Mindtree were very similar. One of its businesses was stagnating; the other growing slowly. Margins lagged industry average. Stock price had been southward bound since early 2010.

The CEO brought on board a senior strategy consultant with wide experience. Working closely with him they were able to make a turnaround in just about a year. Revenue rose faster, margins improved, and stock price began a steady climb.



4. When the going is good! 

It is a rare organisation that acts upon the fourth and final cause. They are doing well and want to do even better. Leaders of these companies recognise that old ways of doing things, even though they are yielding results, will not work in future. They know they need an expert who will not only offer advice, he will challenge established practices, and instigate sustained effort to reinvent the firm. They are visionary leaders.

 

The case of Carborundum Universal 

In 2004, Carborundum Universal, part of the $4 billion Murugappa Group, had completed 50 years of existence. It had a modest but steady record of growth, and satisfactory profitability.

In 2002, the firm had begun the push for faster growth and had improved its performance significantly. They were the market leader in some segments but wished to do more. In 2005, they engaged a well-known consultant to find ways to achieve breakaway growth.

The consultant challenged them to reject the idea of being a leading company in India and consider the world as their playing field. In the years that followed, Carborundum acquired a much bigger Russian company, and expanded its footprint around the world, from China to Canada, and Australia to South Africa.

The now INR 22 billion company has innovated new technologies and products, become a leader in several categories, and created huge wealth for investors.





In the next issue, I shall dwell on how best you can leverage your consultant's expertise.

 


Which of the four situations applies to your business? Call me for a discussion.

Trending

78
adamgrant's picture

The Two Traits of the Best Problem-Solving Teams

You want teams that are cognitively diverse and psychologically safe. A variety of thinking styles—coupled with the freedom to take risks without being punished—enables groups to generate, test, and implement creative ideas.Imagine you are a fly on
99
changethis's picture

Making ‘Agile’ Business as Usual

“There is more to Agility than putting lipstick on a pig. Organizations that attempt to migrate to Agile approaches need to take accountability for their 'inner pig.' Any sector can espouse Agile practices, such as SCRUMS, Sprints, and Stand-ups.
96
danielhpink's picture

Things: The secrets of high standards and happiness

1. WHAT TO READ: Can you teach high standards? Each year, Amazon founder Jeff Bezos — whose current personal net worth exceeds the GDP of nearly 150 nations — writes a letter to shareholders. Most corporate missives are snoozers, but Bezos’s is
138
mashable's picture

Google just slashed the price on its massive storage plans with Google One upgrade

Google's storage plans are getting cheaper. The company has launched a new storage plan called Google One, which offers significantly better deals than Google Drive storage plans. There's no need to switch, because all current Drive storage
400
changethis's picture

Start Imagining a Future of Human + Machine

“In the first wave of transformation, businesses standardized processes. Think Henry Ford and the assembly line, where steps in the overall process were broken down, measured, and optimized to achieve gains in efficiency. The second wave of
162
jackcanfield's picture

Try This Simple Night Meditation Called "The Evening Review"

Successful people maintain a positive focus in life no matter what is going on around them. They stay focused on their past successes rather than their past failures, and on the next action steps that will get them closer to the fulfillment of their
144
davecrenshaw's picture

How far would you go for a friend?

I recently witnessed an act of compassion and friendship so unexpected, it moved me to tears. And it happened in a very unlikely place: Pelican Bay super-maximum security prison. I support a program called Defy Ventures, an organization that works
144
johnsullivan's picture

Here We Go Again – LinkedIn Updates Its User Agreement

There are times in my life when I hate that I am right about something. Like the time I thought an employee was stealing from my store back in the day and two days later I caught them doing just...
278
changethis's picture

How Women Rise: Helping Women Change the Behaviors that Get in Their Way

“It’s not surprising that many of the behaviors that hold men and women back would be different. After all, women often have very different experiences at work. And experience shapes habits and responses.Familiar habits and responses may feel