This conversation is at Linked IN, within the TMA Group. The original conversation can be found here:
http://tinyurl.com/34c4oxg
My response is posted within the thread, and here below:
With certain exceptions (which I will discuss later), I have not found a need for or benefit from bringing in outside consultants into a turnaround situation.
I have found it most effective to engage the employees of the company directly in the turnaround. They know the most about the company already. Many of them already know what is wrong and how to fix it. The hindrance has been the executive management. This leads me to conclude that often consultants are brought in when in fact it is the executive leadership that must be changed - yet this is the same group that the consultants usually set out to answer to. What else could it be? They either answer to the same executives that led the company down the road to ruin, or they answer to the new executives. But why not just bring in new executives that already know how to get the employees working in the right direction and on the right things?
Root out the naysayers within the organization, those who find fault with every new idea or every consideration for a change in direction. The employees in the organization are adults. Without the naysayers, and with proper information, they will understand that hard decisions must be made, and will appreciate that you think enough of them to shoulder this burden.
Listen to the people. Set objectives for them. Identify the key, high-leverage actions and assign responsibility with regular, even daily, accountability meetings. Implement incentive systems that push the leadership (and in fact all employees) to work as a team. The energy in the organization will amaze. The people are ready to run, after a (usually) prolonged period of shouldering the daily burden of living on the financial precipice, an emotional death march.
The exceptions I have found regarding a value to bringing in outside consultants was in foreign assignments. With a lack of language skills, outside resources can be helpful. However even in these cases, the idea was to set up structures and work through the existing management to train and implement mid- and lower-level employees on new processes and procedures. More of the medium- to long-term fix; not the quick hitting turnaround. This was a great success within one organization, and a reasonably good success in another.
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Gosh, I've been a consultant in so many 'turn-around' situations that this one presents a challenge for me. Admittedly, for a long time, I was brought in often as a member of management, integrated into management, so the question of whether I was a 'new' part of managment or a consultant can be a tough one, but I've just seen too many instances in which without my efforts, the company would not have survived, so I'd have to say, I can't all out agree with you.
ReplyDeleteIn one case, the company's management was just completely over extended with operations and cash administration. Someone needed to take it over just so management could focus on management. in another case, believe it or not, someone needed to simply manage the 'bank's consultants' and get them their information to support a restructuring and allow management to focus on managing instead of tasking management with the burden of responding to the lender's advisors. In another case, a 'carveout' from a larger company, there were simply some significant functional silo's that the parent had provided services that needed to be created from scratch to support certain necessary compliance functions critical to the business model. I took that over and spent a year setting the feature up before the company was self sufficient. In another case, non-strategic businesses had to be divested, in another case entire business units had to be consolidated, in another IT environments required rationalization.
In today's business environment, 'consultants' are often 'employees' who just have a defined mission and a beginning and end date associated with that mission in their relationship with the company. It's more flexible for the company as it doesn't 'assume' that all employees have a limitless toolbox or that all employees, once hired, have an unlimited lifespan to their career with the company.
Robert
ReplyDeleteI have further considered my comments here, and would like to offer further thoughts.
To clarify, I am speaking of a situation where the company has come out of bankruptcy. In such a case, the management has spent several months or a year or more being picked over by outsider. The last thing they want is more outsiders picking over them. For morale, I have found it worthwhile to eliminate such outside support as soon as possible.
Perhaps, in my mind, I was thinking too narrowly when thinking about “consultants”, and this is likely due to my own personal experiences. I was addressing management consultants, focused on operational and business turnarounds and improvements. In such cases, and for these roles, I very much prefer to minimize or eliminate these, and work with the existing management, supplemented or replaced as needed by new, full-time employees of the company.
Certainly, there are some specific items that might always require outside expertise, for example tax issues, environmental matters, etc. For these, I raise no objection.