As a manager, you will likely have interacted or cooperated with business consultants quite a lot in your career. Their specialized expertise and their invaluable input has made them a fixture in many organizations.
But what exactly is it these external specialists can offer your business? Let us have a closer look:
- Is their expertise – and thus their consultancy – related to aspects you would just as happily delegate or outsource? Areas where you find it easy to admit that you lack the specialized knowledge or the time required?
- Second list itemOr does it relate to the running of the business as a whole, i.e. precisely those aspects that should be the responsibility of a top manager? In other words: is a top manager able to concede they may need advice on the “strategy and tactics” of their organization? Can they recognize when they have lost sight of the big picture?
The most important task of a company CEO is to create the necessary focus, i.e. to decide what needs to be done as well as what should not (or no longer) be done. Thus they decide which direction the organization is to take (strategy) and how to follow that direction (tactics).
A while ago I was talking business with fellow consultants from different consultancies, operating within a variety of industries and company sizes. The conversation quickly turned to the question of why it is relatively easy to sell a consultancy project such as “introducing ERP software”, “optimizing XYZ process” or “analyzing ABC market”, while at the same time it seems almost impossible to sell something like “increasing profit by X% in year 1 and Y% in year 2”.
Someone made the following attempt at an explanation:
“’Introducing software’ is not the core task or competency of the CEO; this makes it easy for them to accept external advice and support. The same goes for ‘analyzing ABC market’: this type of project collects data and information which the CEO can then evaluate and decide on necessary actions themselves.
‘Increasing profit by X% before Y date’, however, is an entirely different beast. This type of project doesn’t just generate suggestions which the CEO can assess and decide whether or not to implement them. Quite the opposite: in this scenario, the CEO cooperates with the external consultant to develop the necessary focus, strategy and tactics, then to oversee implementation. So these are no longer just suggestions or assistance helping the top manager with his job, but this work infringes on the actual job the top manager is supposed to do. Is it so surprising that it is much harder to agree to this?
If we’re only talking about preliminary research or recommendations for particular areas of the business, the CEO can simply say, ‘having reviewed all the information at hand – and deviating slightly from the given recommendation – I have decided the following: ….’ If on the other hand we have fully-fledged strategy and tactics developed in conjunction with the external advisers, what could he say but, ‘never mind what I said in the past, now we’re doing it this way’?”
The conclusion to draw from my colleague’s interpretation seems to be the following: seeing consultants merely as suppliers is not the same as seeing them as management partners, treating them as equals and cooperating with them on decisions you would otherwise have taken on your own.
In short: Is simple vanity at the core of this?
I’m not sure I like this explanation. The idea I have of a top manager is that they put the success and development of their business ahead of their personal sensibilities. I have seen this proven again and again in my work as a consultant.
But then the question remains: What is it that prevents so many CEOs from accepting external assistance for the development of business strategies?