How Management Consultants Can Help Businesses Perform Better

For entrepreneurs lacking business experience and ones that have come up against new business issues they haven’t faced before, a management consultant is a useful person to bring on board. While bringing in a full-time person into upper-level management could take months, some advice is often needed that same week, which is where a consultant can be brought on quickly. This way, an issue can be resolved and the business may regain its momentum again. 

business owner

Why Does Strategic Planning Fail So Often?

Many smaller businesses lack the correct decision-making processes to decide what needs to be done, plan, assign responsibility for it, and then proceed from there.

A 10-year study covered by the Harvard Business Review in 2017 indicated that CEOs often failed with strategic planning due to being too internally focused. Another study determined that most upper leadership spent one day or less per month discussing strategy. It was also found that those that did develop strategy ideas never broke them down sufficiently to ensure they could be successfully executed by their management team. 

Also, the CEOs and upper management that failed and left their positions often indicated that they didn’t have enough strategic planning training to succeed in the role. 

Creating Realistic Plans

While the board can hand down their decrees about what they expect, a CEO should not accept them if they’re unrealistic or impossible to achieve. Not only does the company not make progress, but the CEO will eventually find themselves looking for new employment. 

When a management consultant comes into the company, it’s often necessary to examine the strategic objectives of the business first. This leads to what goals and projects it’s currently working on and whether it is possible to successfully execute that strategy.

The key question is then: Is it possible to achieve it?  

In most cases, the answer is no. 

The consultant must look to understand the business and its industry well enough in short order to create a workable strategy that is achievable by the existing management team. Indeed, any CEO that lacks strategic execution experience gets a quick education from a management consultant in the course of their review. 

Making Strategic Plans Affordable

The other part of strategic planning is to find the money to pull off the plan. The budgets are usually woefully inadequate and there’s not always spare money to invest to achieve the goals that year. 

For this reason, not only does the consultant need to look to remove spending on wasteful projects but must also find expenditure cuts to fund the new plan that they’re putting in place. 

In the process of looking at different spending, they might come across the costs incurred for medical coverage or billing for key staff members. Indeed, they may balk at them and request some whitelabel reporting from a healthcare consultant to see if there’s fraud, overcharging or other reasons why the costs are so high. By being open to using whitelabel reporting, the consultant quickly gets to the bottom of past and current healthcare costs incurred to ensure they’re more predictable in the future. 

The role of a management consultant when coming into a business is so varied that it’s tough to nail down. While you’d think that they just fix the management approach at the line manager level, deploying them is more successful when they focus both on strategic viability and the numbers behind the business too. This way, they can ensure the plan is workable first to avoid moving deck chairs around on the Titanic. 

About Mohit Tater

Mohit is the co-founder and editor of Entrepreneurship Life, a place where entrepreneurs, start-ups, and business owners can find wide ranging information, advice, resources, and tools for starting, running, and growing their businesses.

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