The Strategic Management Consultant

Understanding strategic management helps organisations to maximise ROI.

A common refrain among senior management is that if you ask strategic management consultants the time, they will ask you for your watch – sadly, this is all-to-often true. While undoubtedly there are consultants in the market who add significant value to their client’s businesses, many have developed a product that simply finds what you already know, repackages it, and presents it along with a hefty bill. While this is obviously of great concern to the clients, many of them continue to use other – or even in some cases the same – consultants in the hopes that it will be better next time. The focus of this article is to explore one possible reason for why this might happen, and what companies can do about it.

One of the main reasons behind this is that, from the outset, neither the client nor the consultant are expressly focused on the value-add – the value that the client expects the consultant to provide – and this leads to confusion, on both sides, about what is expected and, indeed, if the consultant in question actually has the necessary skills and credentials to deliver. While less common in project management or finance-related areas for example (where objectives are generally clearly defined and easily measurable) this is particularly prevalent in disciplines such as strategy or change where there are, to paraphrase Donald Rumsfeld, many ‘unknown unknowns’ – the things that you don’t know you don’t know. But surely this is exactly what the client is expecting the consultants’ experience to address? In the client’s mind, this is what they are buying. The main problem is often that they have not fully explored whether or not the consultant can actually provide this.

If one takes, for example, the case of an organisation wishing to assess whether or not to expand into a new market, it is not necessarily enough to hire a consultant with experience of expanding into new markets; in order to add real value that consultant must have direct and substantial experience of successfully assessing and helping organisations of the same type, and from within the same sector and segment, and often with similar strategic capabilities and resources at its disposal, to expand into the particular market. While companies would certainly never consider hiring a lawyer who specialises in human resources, for example, to advise them on strategic merger and acquisition opportunities, it is equally true that the lawyer is question would not accept such an assignment. His or her ‘professionalism’ would not allow it. Management consultants, however, as they have no ‘profession’ as such (as opposed to formalised professionals such as the law, medicine, accountancy and engineering etc.) have no such considerations or constraints. And without this ‘professional constraint’ the consultant is quite often simply focused upon selling a service, regardless of whether or not they truly have the credentials to add value.

So, what can an organisation do to ensure that is does not fall into this trap? The key is to enhance the knowledge of its leadership team to ensure that, while it may not know the answers, it does at least know the questions it wants answering – in other words, by directly address the ‘unknown unknowns’, it turns them into, at the least, ‘known unknowns’ or things that you know you don’t know.

By enhancing the knowledge of the senior management or leadership team through effective strategic management training, the organisation will be able to firstly ensure that it has hired the right consultant for the job, and secondly will understand specifically the value it wishes the consultant to add. And these two things will help the organisation to hold the consultant to account and will, ultimately, maximise ROI.

Please contact Ironclad Strategy for more information on enhancing the strategic knowledge of senior management teams.

Image:  tony dowler via Compfight

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