Never Hire Management Consultants In These Situations

I need to tell a true story which is about 16 years old.

Jon had just left the secure world of a senior role in a multi-billion dollar global corporation to accept the role of the CEO in a mid-size family-owned company. He had always been a go-getter, who had progressed fast in his previous roles.

He always showed impatience with the bureaucracy endemic in such large corporations, and believed that he could do things much better. And, he might have been right in most of those thoughts.

Moving On

So, I was not surprised when announced his plans to take command of the mid-size Australian company. Because he was not very close to me, I was a bit surprised when he sought me out, saying that he might contact me for a project once he was settled in his new role.

True to his word, and style, he did not let the dust settle before he called me up and requested a meeting. He gave me some details of the situation, and asked for a proposal to revamp the procurement department – which he saw as the weakest link.

Because the story is old, I can share some contextual information while changing other details. The company itself has been sold multiple times since; none of the information is confidential or identifiable.

Jon explained to me that he was the first external CEO in the business – which had so far been run by the founder. The company had been reasonably successful in the mining boom, and was ready for its next stage of expansion on to the international stage.

The Right Person in the Wrong Place

Jon, being the go-getter, was just the right man for the job. He was promised total autonomy by the founder/ past CEO – who had stepped back to the role of the Chairman.

In my first meeting with the Chairman, I found him to be an extremely astute man, who had built a strong company through difficult circumstances. Granted that the recent boom had made things easy for the industry, he was not the kind of man who could easily relinquish control.

It will take a long narrative to describe exact details of the project, and these are not even relevant. Suffice it to say that Jon, who had taken his bosses assurance of total autonomy on face value, found it very hard to operate the company as a CEO.

Relinquishing Control is Difficult

Almost all the crew was used to go to a single man for every decision. For the past 25 years in the company, all decisions were made by a single man – the founder.

Despite the appointment of the new CEO, this continued to happen in our transformation project, as well as in the business-as-usual operations.

It became amply clear to us that our project proposal terms were unlikely to be honoured. There was no way to get the co-operation from the management team because everyone was afraid of what the procurement data might reveal about the past and present.

We requested a meeting with Jon and expressed an inability to continue with the project under the circumstances. He apologised to me about misreading the situation and putting us in very difficult circumstances.

Being Thanked For a Half Done Job

The Chairman thanked us profusely for showing the direction to ‘his’ team and after getting assurance that we will continue to guide them as needed, wrote us a check on the spot – which is the way he operated.

However, more ominously, within weeks, it was clear to Jon that he had jumped from a chiller to a freezer. Within weeks he moved on to a new role as the CEO of a different, more progressive, company.

I will talk about how the story ended later on in this article. Here, I want to come to the main point of this article.

Many Such Situations

There are many similar situations when you MUST not hire management consultants because it will only waste time and money.

In my last article titled – “How To Get The Most Out Of Your Management Consultants While Spending The Least On Them?” – I wrote


The Quality of Your Management Consultants Will Decide The Heights You Eventually Climb To

https://globalscgroup.com/management-consultants-how-to-get-the-best-outcomes-for-fraction-of-the-cost/

A number of people wrote back, objecting to the presumption that every situation is amenable to getting management consultants.

While I did not say any such thing, when I thought about the topic, I recalled this story.

Leading from it, I can think of other situations where we did not start a project just because the person leading the project was really not in control.

Title inflation

This can happen due to title inflation in some countries where people get titles without commensurate powers and abilities.

In many Asian countries, family owned corporations continue to be run by the family members, despite there being a whole cadre of professional managers in place.

It is very interesting to watch the dynamics of these organisations in practice. The problem arises when many foreigners are misled by titles, not too dissimilar to the rare Australian situation quoted above.

Unions Galore

Unions are a fact of life in almost all big corporations – and they have a role to play in balancing the scales.

Yet, in some circumstances, they acquire so much power that any positive change is impossible. I quote one such very personal story in this article.

The point is simple – if the management is totally powerless against the unions they should not substitute analysis for action by carrying out one management consulting project after another.

That would be just throwing good money after bad.

If you adhere to these simple rules of the thumb then I can truly say that:


The Quality of Your Management Consultants Will Decide The Heights You Eventually Climb To

Coming back to the story that started this article:

The company went through two more CEOs, and an industry-wide government inquiry before the chairman finally relinquished control of the operation. At this point, the company was a popular target for take-over.

Care? 'Share'

FREE - Get An Extract From Any Of Our Books!

All you have to do is - comment below. Your opinions are vital for building a vibrant global community of professionals. In time, you will be proud of your contributions:

  • Share Your Opinion

  • Participate in The Conversation

  • Contribute to The Community

FEATURED COMMENTS WILL EARN A FULL COPY OF ANY OF OUR BOOKS.

What are you waiting for?  Share Now, and Win.

 

chiefstaff

  • Vicky Waston says:

    Running the family business is thought of as a privilege. The families inherit the business from their ancestors it keeps floating from one family to another. As a matter of fact, this is a kind of injustice that goes unnoticed by many. Even the families don’t consider making the situation better by involving skilled employees from the outside. It is a kind of hegemony no one dares to discourage. The incompetent and sometimes uneducated family members own the business as a family tradition. The problem I and you have with this setup is it inhibits the productivity and flourishes the racism in society. Competent people never get a chance to show their talent and capabilities.

  • Dan Stanley says:

    Alas! the uncontrollable union culture is threatening the business growth. It’s terribly frightening. The unions have got such stronghold than it was ever before. It is disgusting and annoying at the same time. Who owns the unions and who funds them? These questions emerge and die as there no justified answer. I have seen many companies observing loud and silent protests against these pressure groups on social media. The issue is highlighted and the other exciting news takes its place. What exactly is the solution of this bullshit? They are so hard to be crushed that everyone surrenders before their strength.

  • Jayne Glover says:

    Since I was a child, I heard from almost everyone that quality is better than quantity. Well, for me the quantity matters a lot when it comes to fast food and chocolates, lol. Jokes apart, the quantity may matter in foodstuff but if the quality of food is bitter would you prefer ordering food from the same place again? Of course, you wouldn’t. Quality takes precedence in every field of life. Quality of management is damn significance. Either it is the management of consultants or teams, equipment or logistics, quality is the first and foremost thing. Right management decision definitely takes you to climb the heights of excellence, I absolutely agree.

  • >