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The When and Why of Management Consulting

August 12, 2019

Many leadership teams are reluctant to partner with consulting firms.

It can be challenging to accept that inviting in a partner is not a shameful thing to do. Rather, you're investing in a fresh perspective. However, the first thought is always, “How can we figure this out ourselves?” 

This causes thousands of dollars to be thrown at unnecessary full-time hires, brand new technology, and hours of dedicated staff time – all with the difficulty of seeing beyond the foresight. 

So how can this issue be remedied? 

Management consulting: what is it and why do you need it? 

While there are pros to tackling your challenges internally (i.e. growth opportunities for current employees, problem solving skill advancements, or cost savings), management consulting is an area that has been heavily looked over by a lot of modern organizations as a more efficient alternative. 

The best time to hire a consulting firm is when you want to implement a large-scale change management initiative, but lack the know-how to develop and implement the change. Hiring a consulting firm can not only help you reach your desired outcome faster, but can limit risk and reduce the cost associated with in-house trial and error. 

If you're going to hire a consulting firm, make sure to read up on the importance of consulting documentation

Benefits of partnering with a management consulting firm

There are four key benefits to partnering with a management consulting firm: change management support, credibility, benchmarking, and accelerating time to value.

1. Change management support 

Management consultants work to bridge the gaps that can exist between executive leadership, middle management, and individual contributors to achieve the most efficient change management. Change management is often the most difficult space to tackle internally given office politics, poor habits, and the inability to convey the value of change to a seasoned team. 

On top of that, in the sales consulting space, one of the biggest challenges both the consultants and frontline leaders alike face is the harsh reality that consultants are typically only seen roaming the halls right alongside layoffs.

Consultants, more often than not, come in appearing as a threat to a salesperson’s job security. Because of this, transitions tend to run smoother when there’s buy-in from employees at every level.

Change management starts at the top but is intertwined all the way down to where the change actually occurs: the individual contributor (IC) level. It’s crucial to work with frontline leaders to help them feel not only secure in their role, but committed to the change that the consultant is going to bring to the organization. This is typically the consultant’s first mission: building that relationship capital. 

When the entire sales organization feels like they are a part of the process, change management sees record levels of success. I’ve seen dozens of sales teams beat records quarter-over-quarter when a senior consultants comes in, sits them down, communicates why they’re there and what they’re going to accomplish.

From there, the consultant can perform their job and help the organization achieve widespread adoption of a new technology, new playbook, overhaul a current process or playbook, and generally encourage change at the widest level. 

I’ve learned that individual contributors can play a massive role in an outcome’s success, but you have to involve them early. 

Related: Learn more about regulatory change management software today. 

Is Regulatory Change Management Software right for you?  Read Reviews Now, FREE  →

2. Credibility

Change management doesn’t just mean wanting change, it means being committed to seeing it through.

A lot of leadership teams have ignored the fact that they set the example for their team. If a VP or director are reluctant to changing their approach or work styles, how can they expect their teams to embrace the change?

Hiring an outside party helps foster that adaptability. The consultant will help the leadership team identify their own areas of improvement and commit themselves to seeing that improvement through.

Why do the leaders listen when they’re set in their ways? It’s easy: credibility. 

When a trusted advisor is able to pinpoint exactly what is holding an organization back, whether that be personal habits or organization-wide pitfalls, it’s coming from a place that lacks bias and adds value. The advice is taken.

Once change starts rapidly advancing from the top, companies are quick to see the results throughout the entire organization. 

3. Benchmarking 

We’re constantly wondering where we fall in terms of performance. Maybe you’re hitting your quarterly goals, but are they high enough? Is your good really great? Is your bad actually terrible? 

A consulting firm can help you compare your processes and performance metrics to best practices within the industry and at similar companies. Because most consulting firms have worked with many companies in your field, they have proprietary information that would otherwise cost thousands of dollars to receive. 

A good consultant will help you understand how similar companies implemented comparable initiatives and will then work with you to build a custom strategy based on your company’s unique culture and pain points.

4. Accelerating time to value

When a company has a clear knowledge deficit, a management consulting firm can offer a strategy that accelerates the time to value (TtV). 

No one has time to drop everything they’re working on in order to solve an issue – no matter how large that issue is.

Consultants, on the other hand, come in knowing they will be focused on that challenge first and foremost. Consultants are essentially an additional arm of your organization that has the ability to be laser-focused on the most critical issues you may be facing. 

Here's a personal example to put things in perspective. I worked with a company doing $200M+ in sales that needed to build an inside sales team. 

They had two options:

  • They could hire a manager to recruit and build the team internally, which would mean months of recruiting for the manager, onboarding, training, ramp time, building core competencies for the roles needed, and so on.
  • Skaled could accelerate their time to value by six to eight months by tackling the challenges day one with a seasoned manager who can scale a team quickly. This resulted in millions of dollars of savings. 

When not to hire a management consulting firm

Don’t hire a firm until you have a clear understanding of the problem that needs to be solved or a willingness to dive deep to identify the problem. 

A consultant's job is to take things off the clients’ plates, but consulting engagements only go well when there are clear outcomes to drive toward.  A firm can’t give you what you want if you don’t know what you want. 

Consultants are hired to drive change, not to give confirmation that you’re doing a good job. We will not dream up an issue to solve if one does not exist. 

Do not hire a consulting firm if you are solely looking for validation. There are easier, cheaper, and less wasteful ways to get the validation you are looking for. This happens on rare occasions, and is often unintentional, but the best way to yield a positive ROI on your consulting engagement is to accurately know ahead of time what ROI will look like. 

Set realistic expectations

When hiring a management consulting firm you should always prioritize outcomes and hold the firm accountable to those outcomes, but you also need to set reasonable timelines. 

Many consulting firms don’t feel comfortable being held to business outcomes because they’re often faced with unrealistic timelines. You have to give the firm time to drive results.

You can’t hire a firm for three months and expect revenue to grow by five percent if you’re at the enterprise level. It must be an equal partnership. You want your firm to get to your goal? Great, give them the time to do this. 

You’re free to do your due diligence in diving deep on a realistic timeline that makes sense for both ends of the party. 

To hire or not to hire: what's the right choice?  

Hiring a consultant isn’t an easy decision to make. It’s nerve-wracking, can cause unnecessary rumors in your organization, and it means accepting the fact that change needs to occur fast. However, management consulting is a positive investment for almost any organization facing revenue, operational, or financial challenges.

Change management sits at the intersection of process and people dynamics. Building out a new strategy and methodology is not the difficult part. The real battle is getting people to actually adapt to a new strategy over the course of six-to-24 months. 

Understand that change takes time and it doesn’t happen overnight, especially at large organizations. You simply can't move an oil tanker at the same speed that you would a small ship, but you can bring in a partner to make those changes a little less daunting. 

Looking for the best management consulting provider for your company? See the highest-rated options for your needs.  

Find the best Management Consulting Providers for 2019→

The When and Why of Management Consulting Learn how management consulting can encourage change, boost credibility and performance, and accelerate time to value for your company.
Jake Dunlap Jake Dunlap designs repeatable, sustainable sales models and processes that outperform industry standards. As the Founder + CEO of Skaled Consulting and Skaled Media, Jake helps executives around the world accelerate business growth with data-backed sales solutions. Before building Skaled, he held the roles of VP of Sales at Nowait (acquired by Yelp), Head of Sales + Customer Success at Chartbeat, and VP of Sales at Glassdoor (acquired by Recruit Holdings for $1.2 billion dollars in 2018).

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