Management consulting firms can improve your productivity and help you find better ways of doing things. They can also be eye-wateringly expensive. So could you apply the consultants’ techniques to your own business and achieve the same outcome?
This checklist maps out a typical journey that you’d go through if you hired a management consultant. It outlines the common steps, hurdles and challenges you might face along the way. At the end of it, you may decide that you can go it entirely alone. Or you may decide you need some outside help. Either way, you’ll find there are far more consulting tools and flexible independent advice available to SMEs now than there ever have been. So let’s get started:
1) Do your housekeeping
If you want to transform your business, you need to start from a clean page. You don’t want to start out in the weeds of everyday business issues. So before you start your radical re-think, get your house in order. Make sure your finances are in good shape, that you’re happy with the make-up of your board, and that you have all your key personnel in place.
2) Commit!
The big management consultants give themselves a fighting chance of effectively coming up with game-changing solutions by throwing a whole lot of people at the task. You may not be able to go that far but at least you can make sure you appoint an internal team who are fully committed to your change-making project. If your team is merely a sideline or a 'nice-to-have’, you’re going to vastly limit their potential to come up with anything useful.
3) Speak openly
To identify problems and challenges, you’re going to need to conduct rigorous top-to-bottom interviews. This is where consultants can come in useful because it’s sometimes easier for people to bare their souls to outside advisers than to someone they work with and know well. You need to establish a totally open forum and make your colleagues realize that no subject is off limits, total honesty is appreciated and there will be no unpleasant consequences for people who speak their minds.
4) Start at the edges
Although management consultants have a reputation for being fiercely intellectual, some of their techniques are rooted in simple common sense. This is one of them. If you want to increase your productivity, look at the most profitable parts of your business and see how you replicate and expand on them. Then look at the least profitable parts of your business and see how they can be fixed.
5) Apply the Pareto Principle
One of the most modern strategy consulting techniques actually began with an Italian gardener in 1906. Vilfredo Pareto observed that only 20% of his pea pods produced 80% of his peas. Finding the 20% of your business that generates the lion’s share of your profits is a smart way to start building yourself a better business model.
6) Find your ‘key driver’
A great deal of a management consultancy firm’s brainpower is used up on finding a company ‘key driver’. A ‘key driver’ is the core opportunity for your business. The issue that is keeping you (and your competitors) up at night. The tough nut that, once cracked, will unlock a whole world of potential and opportunity. It may take a while to get to, but it will be time well spent.
7) Data, data, data – and more data
Your brilliant business insight may have arrived in a lucky flash but there’s no way of knowing if it’s going to hold up unless you put it through a data torture test. “Where am I going to be able to access all these reams of data?” you may well be asking yourself. Well, the good news is that there are now a number of flexible, affordable tools that small businesses can access without paying the Earth. In the interests of full disclosure: data can just be a colossal drain of time and money if not used correctly. That’s why it’s worth consulting tip no.8.
8) Don’t boil the ocean
On the one hand, this is a horribly clichéd bit of business speak. On the other, it’s almost a text-book lesson in how to get the best out of those diligently-crunched numbers. Basically, what this means is that you need to be fiercely protective of your data analysis and obsessively ensure that it’s focused on the ‘key drivers’ that you’ve so painstakingly identified for your business. Otherwise it’s just an expensive stream of irrelevance.
9) Get buy-in
Well, it seems that we’ve left the hardest part till last. This is the section of the journey where management consultants believe they can just waltz in, dispense their wisdom like fairy dust and move on to their next high fee-paying client. Actually, it’s the part where you’ll have to display determination, single-mindedness and all the skin of the average rhinoceros. A lot of people hate change. Therefore, a lot of people will be resistant to any of your suggestions. But you have your process to fall back on, a ton of objective data points to back up your case by now and, hopefully, you’ll have convinced yourself that what you’ve got to share is something that is going to take your business to a whole new level.
Business is changing. So are consultants.
According to Arancha González, Executive Director of the International Trade Centre (ITC), SMEs are “The world’s most concentrated, booming and innovative engine for world trade and growth.” In a nutshell, SMEs are calling the shots. A whole network of consultancies are springing up, dedicated to the needs of small to medium size businesses. The sheer number of people who’ve passed through the hallowed halls of McKinsey, PwC et al. means that there is now a vast amount of brainpower in the independent adviser or internal consultant space. Even the biggest names like McKinsey are changing their pricing model to attract smaller businesses.
