Your feedback on last month’s post was greatly appreciated. Many of you pointed out that Frederick Taylor preceded the Gilbreths in time (1890’s) and we should have highlighted his achievements as well; particularly pertaining to the development of time & motion study at Bethlehem Steel. True enough, he has been called the “Father” of Industrial Engineering and the first “Management Consultant”. We chose not to include him because Taylor’s story, in its completeness, is not a great fit in this 21st Century. True, the man was a genius, honest, and results oriented. But along with his multi-faceted talent we get his very public, utter disdain for the people he worked with calling them “phlegmatic and stupid” and “incapable of understanding what they were doing”. It’s kinda hard to view him as our “Father” figure without a large budget for counseling and therapy. Maybe he’s more like the crazy Uncle that the whole family loves for his intellect and good heart but you can’t take him anywhere in public?
There you go… that’s why we left Taylor out and now by popular demand, he’s in… Everyone’s a Winner!!
Speaking of success factors when engaging consultants, our original topic for today: “Jabberwocky”, the greatest nonsense poetry of all time in English written by Lewis Carroll and published in 1871 seemed fitting as a title for this entry which attempts to take what may look like nonsense on the surface and boil it down to critical success factors for achieving success when working with consultants. We wanted to review key elements that when well managed, can ensure a great operations consulting experience for you and your business. So, without further ado…
Know what you want. Sometimes we hear something like, our performance is behind plan or we want to be more profitable. The follow-on discussion should produce something like, “We need an additional $15MM on our EBITDA line by 3Q” or “Our COGS expense forces us into uncompetitive pricing for products x, y, & z, we need to reduce cost or add more value to leverage pricing elasticity.”
As a prospective client, you should expect this conversation. To state the obvious: it’s smart to specifically call out what you need from your consulting partner. It also helps the consultant best gear-up to serve you. Almost everyone in the business of consulting has been on at least one project where these questions were not cleared properly and to a person they can recall every fatalistic attempt their firm, bosses, clients and teams made to support their top client’s amorphous goals. Those gigs never ended well…
Just knowing generally where you need to be is still not enough for successful engagement. Your consultant may suggest a few first steps to initiate a project. One of these should be the development of a business case. Cynics claim (often with a smile) that this tips the negotiating scale in favor of the consultant and justifies their outrageous phony-baloney fees. While this is sort of true, the much more important reason for a business case is to inform all concerned parties as to the value of the undertaking. This allows the client to validate need and feel comfortable committing time, resources, and treasure to the program. Engaging consultants is disruptive in many ways and you should only do it when the stakes are high enough to justify the path.
The hard lessons are the best: always define the business case in specific, quantitative terms over time. The detailed, finite requirements of the previous statement cannot be met in a seminar or through a couple of interviews. While some of that is required, a detailed analysis of the financials and what's behind them is the key.
Understand the staffing model. Every consulting business is built around a staffing model. Sometimes the models are a bit difficult for clients to understand from the outside. The gamut runs from the large firms that operate on a “pyramid” model to the very small firms which generally lean towards a fully “networked” approach. Most firms (including ours) are somewhere in between. There are benefits to each but prospective clients need to understand where these benefits lie.
The “pyramid” model implies that every consultant on your project is almost certain to be a full-time employee of the consulting firm. The economics of this model are entirely based on utilization; higher utilization makes more profit for the firm. So, the expert thought-leader you are paying $36,000/week comes with many younger less experienced, lower cost “minions” each billing an additional $18,000 per week. No matter the titles or the youthful appearance, roles and therefore rates are driven by cost within the utilization model. The beast is only fed by projects staffed with 1 of these; 4 of these; and 15 of those… i.e.- the “pyramid”. As such it is very rare to find one person from a pyramid based firm working on a project.
Networked staffing models generally present as a mixture of employees, full-time contractors, and networked “associates”. This model is closely matched to near-term client needs. For the firm, the ongoing management of the “network” is critical. For example, the networked firm depends on its ability to deploy highly experienced resources to solve unique business and technical problems for a client. These skill sets are often such that they do not lend themselves well to high utilization. In other words, if they were “employees” they would be unprofitable. On a contract basis, these resources typically demand higher compensation than employees. Networked firms pay handsomely for these resources but they only pay while they utilize their services.
Clients tend to get very good thinking on business trends, methodology, technology, and strategy from “pyramid” based firms. These are things their people research, study, and write about when they are not being utilized by clients. On the networked side, clients appreciate more experienced resources often with decades of practical experience. That experience is a critical key to delivering bottom-line improvements through problem solving.
Make no mistake, this is not a “which is better?” discussion because both are useful and do good work, but usually one is better than the other depending on the situation.
It’s all about people. “So, who are those 20 people that showed up today?”, asked Dave. “I dunno, but it can’t be good”, replied Susan.
Ultimately, you will ask your staff to change how they do things in an operations improvement project. A few weeks of preparation in this regard can improve results and save months on the back-end. We call this element of people engagement a "critical success" factor. True, your shareholders represent a huge constituency but your employees can make or break an improvement effort; sometimes in the first hours of engagement. Many firms, including ours make an overt attempt to connect early and often with as many client staff as possible. We do this by spending one on one (and group) time with client staff. Building relationships face to face offers the prospect of mutual trust and respect. The initial assessment process that we generally utilize with clients is specifically geared toward people and their view of the business across fact based rational, political, and emotional dimensions. Our aim with this approach is to create dozens or hundreds of “change agents”.
Like your consultants. Don’t like them because you hired them, hire them because you like them. This is not to mean that a consulting engagement is to be managed like a high school social club. On the contrary, if your consultant is doing their job correctly, they will stress you out. You must trust them, understand their motivations, and be willing to correct them when they get out of line. Any Project Manager worth their salt, understands and expects this from their clients. They will put stress on your people, too. Masters of consulting (we just made that term up) know how to deliver stressful programs with the least amount of pain possible. They do this because they are “hardwired” into your brain with an understanding of your business needs and how to get from “A” to “B” inside your culture. They continually test their top clients for this alignment and adjust on a dime when necessary.
The point here is that there are many bright, intelligent, people in the consulting business but no one is everyone’s “cup of tea”. If you’re doing any good for the business, you will be spending a lot of time together under stress. Achievement is awesome but every single day on the path will not be. Just make sure the people and the firm are your “cup of tea”.
We hope you found this series interesting and useful on some level. We love feedback, especially when it’s critical. We view compliments and negative feedback as improvement opportunities.
Certitude Group can assist with an assessment of the current fit, function, and effectiveness of your business processes and we can design enhancements to not only correct deficiencies but also improve the effectiveness of your operations. We have identified millions upon millions of dollars in benefits associated with business process effectiveness upgrades. These benefits materialize through better technical outcomes and cost effectiveness. We can do the same for you and your company. Just drop a note to email@example.com and we will set up a time to discuss you situation in detail.
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