Management consultants... Miracle workers or just smoke & mirrors?

[LeeH]

Do you have any direct experience with management consultants? How did your organization benefit? Was it worth the price?

[HardDrive]

I'll tell you all about management consultants.

My fee is $250 per hour.

[kqw]

Be more specific as to what you want mgmt. consultants to do?

[Paco Anton]

I have been a management consultant for 10 years (fortunately managed to move just this year). My fee could be as high as 3k€ (4k$) per day, but this included not only my work but also the use of the company's resources, expert network and such.

I have worked in many assignments over these years. In some of them I was a real expert and could add to the client and in some others I did not have a clue about my client's business and had to learn on the go.

Usually the MC firm will take ore or several experts to the sales pitch and presentation and say that these experts will be available during the project. Make sure you get this experts to really work in the assignment as the real work will be done by very smart and hard working young guys that may or may not have relevant experience for your case.

Of course different firms may have different approaches. If you want specific advice PM me and we can discuss your situation.

On a side note I am now COO of an industrial company and could not be happier

[legion]

My take:

If you have a truly disfunctional organization, they can be a real asset. They may even be the thing that saves you from disaster if you listen to them. Of course, that all depends on how well they understand your business, which really comes down to the individual consultant(s) you get.

If you are looking for incremental improvements, you are probably better off trying to find them from experts internally. It's easy to find the big mistakes, but it takes someone who really knows your company to find the small ones.

[berettafan]

Have a client that does this. Small one man operation and he bills as much as $8k/week. Some companies i have seen him work with have benefited greatly and others are just throwing money down the toilet.

He put together a cost/bidding model for a very small client that saved his business (guy was losing money on jobs and had no idea about it!) but beyond that i'm not sure what he does.

[Rick Lee]

My employer hires a MC for training all of us twice a year. I can't imagine how ridiculous the money is we pay them, since my company spends money like it grows on trees. The MC trainers (IMHO) are professional consultants who've never had a real job in their entire lives, have no understanding whatsoever of our company's products and services, just hand out brochures or binders and facilitate discussions in the classroom. It's worse than watching paint dry.

[frogger]

[stomachmonkey]

As others have said.

They can be a life saver or nothing more than a money siphon.

Have seen both several times.

[The Gaijin]

You pay lots of money for them to tell you what you already know!

[sammyg2]

A consultant is someone who knows 1000 ways to make love but doesn't know any women.
I've never seen them earn their money.

There's a poster on the wall of my office that says "everyone knows how to fix the problem except those who have the power to fix it".
Ask your own workers and then have the brains to filter out the biased BS, chances are they will give you better answers than any consultant.

[Dottore]

Originally Posted by stomachmonkey

As others have said.

They can be a life saver or nothing more than a money siphon.

Have seen both several times.

Agreed.

The issue, as always, is the quality of the individuals you are working with.

I have seen big MC houses send kids straight out of business school into complex projects - who were then a complete embarassment. On the other hand I have seen good senior MC types turn entire enterprises around.

Because this type of work is largely unregulated, you will find a lot of charlatans in this business. CEO's and CFO's who have been sacked and who set a up a small shop etc. I would always avoid these.

Go with a big MC house and insist on working with senior people. The big houses have access to resources, research, computer modelling etc etc that can be invaluable.

[Superman]

Legion is dead-on. I used to wonder what in the world could make someone worth their fee at hundreds of dollars an hour. Ideally, all the energy and expertise and creativity you need is right there in your existing corral. But what I have discovered is that if the consultant is the only guy bringing common sense to the table, then he's actually worth thousands of dollars an hour.

And then there's the management game where you pay consultants to suggest your preferred strategy to you, in writing. It's a thirty thousand-dollar strip of insulation that goes over management's heinie.

[Rearden]

Originally Posted by The Gaijin

You pay lots of money for them to tell you what you already know!

But they tell you with gorgeous PowerPoint slides.

[oldE]

I once had a consultant advise me,"A consultant is someone who looks at your watch and tells you what time it is."

The company I spent 2 1/2 decades with brought in consultants three times during that period. It was embarrasing for us and them, I thought.

Before the last episode, I was at head office one day when the fire alarm went off. While in the parking lot, I was chewing the fat with an executive assistant while a third (sort of familiar looking fellow listened) and said, "I can't believe they're talking about bringing in consultants! If we don't have enough talent inside that building to do what needs to be done, we've got the wrong people."
Back inside the EA advised me the fellow looking on was the chairman of the board.

What Sammyg2 said is all too true. There is a culture in many companies which assumes someone who gets a management salary must have all the answers. A manager doesn't need to have the answers, he/she just has to have the brains to get them out of whoever knows, be it co-workers, line workers or what have you. I have seen too many managers refuse to listen to a great idea because it was suggested by someone who made an hourly wage. That kind of bigotry will come back to bite you on the a$$.

Les

[Superman]

Originally Posted by oldE

.........A manager doesn't need to have the answers.......

Les

True. Management's better tactic is to have the questions. The guys who ask the best questions are the best managers. Staff answers the questions. Before being managers, managers were staff. Previously, they answered questions. Now, they ask them. Staff does not generally need more direction than this. The solutions are in the questions.

[sammyg2]

A man was sitting in a restaurant and noticed that all the waiters had a spoon in their shirt pocket. he asked his waiter and this is the explanaition:
"The owner brought in an efficiency consultant who figured out that the spoon was the most often dropped utensil. So he recommended we all carry one around with us so when a customer drops his spoon we don't have to walk over there to get another one so we save time."
The man said "oh, ok. But I also noticed that all the waiters have a piece of string hanging out of their trouser flys. What's up with that?"
The waiter went on to explain that the consultant figured out that too much time was spent washing our hands after a restroom break. He suggested we tie a piece of string to our genitalia and pull on the string to pull it out when we have to go, that way we don't touch it and don't have to wash our hands, and we save time.
The man asked, "well how do you put it back in without touching it?"
the waiter said, "I don't know about everyone else but I just use the spoon".

[stealthn]

Lee,

It really depends on what you are trying to achieve, or what is wrong with your business. The best solutions are ones that are adopted and used to continually improve business. I would suggest looking into Six Sigma which focuses on continual improvement. You could bring in a Six Sigma consultant to get the process in place, then it's up to management and the employees to adopt and improve the process.

Good luck,

[rammstein]

From what I've seen, the right one in the right situation could be a lifesaver. So ditto.

[widgeon13]

I've done some consulting since I retired four years ago. Consultants can fill a useful role if you get the right consultant and an organization that is truly interested in making some changes.

I worked for a company for 30 years and we had too many consultants come and go, spent bundles of money and really changed nothing, most of the time we fired the consultants and went back to the old way of doing things.

Most of the good ideas are within the minds of the people within the organization, it's just a matter of allowing those ideas to grow. An environment that tolerates mistakes is also very important. Many things can be learned from evaluating errors along the road to success but penalizing someone for making a mistake and not understanding where they went wrong in their thinking is the biggest error. When you realize someone has made a mistake it makes sense to go back and analyze the decision. Most of the time it will lead to a better process and bring value to the organization.

One of the goals of an organization should be to make decisions based on all available information, sounds easy. The problem is that most decisions are made based on history, how it was done in past cases. That obviously leads to repetition, some good decisions and some bad decisions. The objective needs to be different decisions that lead to improved results.

Once people in the organization see that errors are analyzed and they are not penalized they will become more risk oriented, that is what really drives creativity.

The right consultant for an organization can help create that environment but senior management has to be willing to foster that risk oriented environment.

Bottom line is that I hate consultants because most of the time they try to milk an organization to death, they don't want to leave and keep finding things to fix. The best consultant is the one that teaches good process and decision making skills and then leaves to let the employees make the decisions. No magic to it at all, it's called ownership.

I love this subject but as I said, I hate consultants.