There was an organization who were in to the business of metals. The nature of the business was such that sales was not a challenge, but it was the raw material cost which was a challenge. Raw material being a commodity was subject to severe market fluctuations.
The most fascinating part of this organization was, unlike in most of the corporates, every department head and their team were involved in keeping up to the commodity rates! Commercial, production, sales, accounts & finance and even admin & Hr.
70% of the personnel were retained for over a decade and more.
So it might seem as a ideal organization where the concern of the organization became the concern of the employees too.
So why does this firm need a Management Consultant?
The organization realized few things:
- Their turnover though was steadily increasing, it was not on account of their efforts. But since the government created that kind of demand in order to improve infrastructure, they kept on getting orders.
- There was zero effort to create new markets. Which is of course risky, given the current dynamic demand situation
- The staff were so cued in with the financials of the organization, that they never worked if they did not see the probability of a good appraisal
- There were huge revenue leaks on account of bad processes
With these in light, the organization tried to solve the issue themselves. But the continued pressure to deliver to stakeholders, customers made it impossible to think rationally and create solution.
Thus the need of a Management Consultant was justified.
A good management consultant should be a good entrepreneur in order to understand the pains and problems of another entrepreneur. Additionally, the management consultant needs to be someone with wide exposure over sectors and should have sound business strategy and financial knowledge.
The advantages of having a good management consultant to large and medium size organization are many. A third and impartial perspective to the ongoing operations, a knowledgeable perspective to growth, a logical view on management team and their performance and so on.
It also makes good financial sense to the organizations. Its like hiring Vice Presidents for various roles in one go and that translates to 1/3rd the cost.