Management Consulting for Small Businesses – Justifies Existence?

Historically management consultants are among the most hated professional community in the business world. As a student, when I aspired to be a management consultant, I wondered why glamorous management consultants always frowned about being “hated”. Once I entered the profession as a management consultant is when I truly understood how hated management consultants are.

While there are ethical and unethical people in every industry, act of a few consultants (since the emergence of management consulting) who robbed clients without delivering value can’t be rub against the entire profession of diligent value worshippers. Management consultants, over the years, have emerged to be a very important part of the entire eco-system.

Though Indian businesses are not as consulting conscious as their western counterparts, the trends to employ management consultants has begun to improve. Management consultants still get brick bats while moving in industry circles… Especially when it comes to SMEs management consultants are look at like the famous quote “don’t employ a consultant to tell you time from your watch”. Whenever I come across these people, I so pity them for the lack of knowledge and understanding of the benefits of employing management consultants.

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Few reasons where management consultants can add value. This is also an effort to imply management consultants are not just for big MNCs, SMEs and even start-ups can greatly benefit from management consultants.

  • Third person perspective: Being part of the execution of any process/business etc one tends to get constrained by conventional wisdom, conditioning, experiences etc. Involving consultants as part of strategic planning etc a new perspective is brought to the table. Irrespective of the relevance of the new perspective, it is valuable for least of least the entrepreneur/team learn what is definitely not an approach.
  • Strategic perspective: While firefighting at the grassroots, especially SMEs tend to lose their vision of the big picture. When a management consultant comes to the table as an external entity not involved in firefighting, that person is in a much better position to lead the entrepreneur/team to see the big picture. Several real problems can be solved at the strategic level, entrepreneurs at time just don’t look at things that way.
  • Case study support: Why reinvent the wheel when someone has solved the same problem SMEs face. Management consultants can elaborately choose and supply relevant case study support corresponding to the business and circumstances. It’s the best gift a management consultant gives a client, and one of the most valuable. However fundamental, to look for precedent, many companies just don’t do it.
  • Critical data analysis: Strategy in the modern world is all about interpreting statistics. Lots of information is hidden in data. Extremely objective exhaustive analysis can greatly aid the problem solving process. Management Consultants, with their third person perspective, can greatly add value by interpretation and analysis.
  • Domain Expertise: Many management consultants are hired for specific domain expertise. Say for functions like finance, supply chain etc or industries like retail, pharma etc. These consultants usually bring along with them the absolute understanding of their respective domain. Domain experts are one of the most respected among the clan, I’m not sure when clients will realize consultants are not magicians. They can’t pull off a miracle off the sleeve.

Despite able to add value at the top of the pyramid, one might wonder why management consultants are as hated as they are. Its always about results when clients pay. As a consultant taking responsibility is unethical, but it very difficult to put it across to clients. No strategy, no plan, no framework can deliver results without efficient execution. As long as execution remains with the client, its unethical for consultants to take responsibility of results. The obvious question that may be raging is “why not take up execution”, but when a consultant gets involved in execution, it seizes to be consulting and all the benefits of “third person” which is by far the biggest value add is forfeited.

Despite all the glamour that surrounds management consultants, this is the ugly truth. What’s your opinion?

[Guest article by Venkata Sashank, cofounder of Dot Now Social Media Services LLP. This article is part of our series inviting entrepreneurs to contribute and win free entry tickets to Nasscom Product Conclave]

Note from Ashish – An apt post, that applies to many startups, especially when it comes to bringing Product Management/Marketing consultants vs. attempting to DIY (especially when there are signs of repeat failures).

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