Agents of change: Consultants make things HAPPEN
By Anne M Porter; Agatha Ciancarelli; Lisa van der Pool. -- Purchasing, 11/5/1998
There's an old joke that says, "Give a consultant your watch, and he'll tell you what time it is." But anyone who laughs knowingly at this gibe is likely to be working for an organization that has merely done a poor job of sourcing knowledge or advice.In struggling to update supply management practices, countless purchasing execs have been frustrated by either lack of resources--time, money, skills--or by weak organizational links to critical corporate functions, including the corner office. Consultants provide both time and skills. They typically have the ear of senior management. They can usually persuade top execs to cough up the cash for modern resources (such as information technology, employees with new skill sets, etc.). And they can move through an organization unfettered by corporate politics or by the myopic measures of job performance that so often put purchasing professionals at odds with the greater goals of their companies.
In the grand scheme of American business, professional advisers may well be the leading agents of change. Management consultants have been an important force in focusing boardroom attention on the great potential in competitive supply chain management and in paving the way for integrated approaches to supply. As companies pursue more highly integrated supply chains, consultants are also likely to play a role in forging the links among the discrete organizations in supply-chain enterprises.
What they do
Companies use consultants for a wide range of projects in the procurement and supply chain areas. According to two Purchasing surveys--one of procurement execs, the other of consulting outfits--most typical engagements involve one or more of the following activities:
* Straight cost reduction. ("We spend $100, can you make it $50?")
* Strategic sourcing.
* Assessing or benchmarking existing supplier management or supply chain processes.
* Reengineering of supplier management or supply chain functions.
* Training, formal and informal.
* Outsourcing.
* Blending of procurement following mergers and acquisitions.
* Developing and deploying software and IT systems (including electronic procurement, ERP systems and add-on software).
Purchasing execs' role
Most purchasing and supply chain management consultants say they typically enter engagements only at the CEO or senior management level. Beyond the obvious reasons--authority and control of the purse strings--most say they do this because supply-chain improvements always tran-scend functions and high-level endorsements are critical to their success. In many cases, as well, consultants say changes are often needed in the way supply management organizations are staffed (see sidebar).
The upshot is that procurement executives may have little choice about who comes in to fix their processes. Nonetheless, while consultants usually sell directly to CEOs and other top company execs, many say high-level purchasing execs are usually involved very early in the decision and planning processes, and that involvement is increasing.
Says Brian Meadows, lead partner for strategic supply management at Deloitte Consulting: "We're becoming more involved with marketing to heads of procurement or heads of strategic sourcing. Many companies have put together more sophisticated procurement organizations reporting directly to the CFO." Joe Martha, vice president at Mercer Management Consulting, says that while Mercer markets primarily to CEOs or COOs, the firm also markets to chief procurement officers at very large companies and pursues visibility with other purchasing executives through large seminar events. "We want to create our brand in that area because senior management will often ask people for their recommendations."
Tim Chapman, director, senior partner and a founder of McKinsey & Co.'s purchasing practice remarks that, "CEOs can and should play an important role in driving non-labor productivity at their companies. In fact, most of the procurement execs that I encounter are glad the CEO is taking an interest in supply management." Chapman says one CEO he met, "described his CPO's purchasing efforts as the company's highest return-on-investment business."
While procurement execs may not get to choose their saviors, they can learn a lot about what to expect from an engagement--and how to get the most out one--by understanding the nuances of the consulting supply base and by seeing the world from their advisers' points of view.
About the supply base
Consulting practices specializing in procurement and supply chain management (SCM) are loosely categorized according to four fundamental areas of activity: operational assessments or audits, strategy, implementation, and systems (i.e., deployment of software--especially ERP and related software packages--and other information technology).
"Boutique" strategy firms specialize in creating high-level concepts and organizational capabilities. Other firms specialize in implementation, picking up where strategy firms leave off. For example, Steve Trecha, president and CEO, of Integrated Strategies says, "While much of our work is strategy development-based, companies will call us when they have difficulty taking concept to practice." Other boutique-style firms specialize in building and deploying information systems, or they occupy very specific niches such as global sourcing or capital equipment leasing.
Quite a number of firms combine strategy with implementation activities. Tom Slaight, vice president with A.T. Kearney says, "Our work with senior executives and our success at strengthening procurement has helped us turn strategy into action. We have a reputation for rolling up our sleeves and helping our client achieve and sustain results."
Full-service consulting firms offer all four levels of activity--assessment, strategy, implementation, and systems--but tend to have distinct strengths and weaknesses based on their historical roots.
Robin Palmer, partner in charge of kpmg's supply chain management practice, says the firm's methodology allows it to enter an engagement at any stage--strategy, implementation, or systems. "We don't tell clients that we need to do a project from beginning to end. Our method allows us to enter an engagement beyond the business case analysis." Mark Simmons, director of Ernst & Young's Global Sourcing & Supplier Management Practice, says, "We have been called on to implement the recommendations made by boutique strategy firms, but more and more, we're being called upon to help craft strategies."
"Our perspective," says McKinsey's Chapman, "is that we are paid for impact. Our work is not complete until the impact of our work hits the client's bottom line."
Targeting clients
Depending on their respective identities, procurement and SCM consulting firms say they target and evaluate potential jobs according to various combinations of criteria.
Level of engagement is an important factor for many. Patrick Kelley, vice president and champion for the supply chain service offering at Gemini Consulting, says, "We're looking for engagements that address bottom-line business issues. We prefer projects that are multidimensional, involving various constituencies in an organization." Palmer of kpmg says, "We're typically looking for larger, high-end engagements." Martha of Mercer Management says, "We want to work on high-level projects involving the whole business strategy. We avoid situations where we would be doing discrete supply chain work."
Some consultants seek only long-term engagements. "We're trying to focus on larger, longer types of assignments," says Martha. "Instead of 2-3 month studies, we're looking for multiyear relationships where we can concentrate on strategy work." Jim Schuetz, partner and leader of the global supply chain results service line at Deloitte Consulting, says, "We seek long-term client relationships rather than discrete projects." Michels, of ADR North America says "People don't use us for discrete assignments. Our programs typically run two years."
Other firms--while hoping to develop long-term relationships--are happy to take on more discrete, short-term jobs. Trecha of Integrated Strategies, says, "We are comfortable with projects that are between 10-12 weeks in duration. At the end of that time, we sit down with the client and discuss results and future activities. Many of our long-term relationships start out as short-term projects."
Very large consulting firms usually limit their work to very large client companies (see sidebar, "What's a small company to do?"). Simmons of Ernst & Young says his organization tends to target "large multinational corporations where procurement represents a significant percentage of cost." The firm also has a middle market consulting practice which addresses the sourcing needs of smaller domestic clients.He says Ernst & Young seeks out companies with characteristics that mesh with the organization's strengths. "We're particularly interested in companies that need to undertake sourcing transformation initiatives resulting in significant and sustainable improvement."
McKinsey uses a different set of criteria in targeting clients for procurement and supply management work. Chapman of McKinsey says the firm pursues engagements that "excite" its consultants. "Industry leaders or companies aspiring to be industry leaders excite us," says Chapman. "We're excited also by industry transformations that are nothing short of radical (for example, telecom, electric utilities, healthcare), management teams thinking 'outside the box,' and significant industry events--a large merger, for example." The firm is not keen, Chapman says, on simple "cost-whacking" exercises. "We're looking for clients that are absolutely committed to building purchasing into a source of competitive advantage. We want to work with firms that are committed to taking purchasing from being a 'fetch' organization to one that is at the center of the institutional management agenda."
Mating dances
To build and to protect their reputations and to ensure the success of engagements, consultants say they're becoming much more savvy about evaluating client cultures before proposing on a job.
Chapman of McKinsey says the firm will decline work if it doesn't "sense the ingredients for success"--for example, "if the CEO or senior leadership is not engaged." Glenn Ramsdell, a leader and cofounder of McKinsey's purchasing and supply management practice says: "It would be unusual for us to take on an engagement without backing from the CEO and without a steering committee staffed by all of the important functions."
Paul Matthews, partner with Andersen Consulting, says "Word of mouth is very important in this industry, so we can't afford to fail." For this reason, he says, Andersen uses a rigorous quality control process. "As a partner in this company, I can't just write up a proposal and deliver it without going through our global business development process." Also, Matthews says, "I have told clients that we won't do the work if they can't deliver CEO support."
"Our first evaluations establish the level of client commitment and sponsorship of an initiative," says Mike Fath, partner in charge of purchasing end-to-end solutions with kpmg Consulting. "We want to make sure the project will have a meaningful impact on the client and that our thinking about a competitive opportunity is consistent with theirs."
Schuetz of Deloitte Consulting says his firm looks for companies that share its core values. "Our emphasis on long-term relationships requires a meshing of core values. We want to know the client is serious about changing its environment. We want to know they are willing to dedicate top management and other resources to the project. We want there to be a strong spirit of collegiality--trust, respect, and integrity." Meadows, also of Deloitte Consulting says, "We've lost assignments where the client has been more geared to a short-term focus, where they wanted a style of practice that was much more ruthless and aggressive."
Matthews of Andersen Consulting says, "We won't go into an engagement unless the entire organization has bought into it." In the last year, he says, "I've turned away five major consulting jobs because it was clear that there was no aligned belief in what they were doing. We would have failed had we taken those jobs."
A red warning flag, consultants say, is when a hiring party has clearly decided what it wants to do before contacting the consultant. Tanel of cattan Services says his firm specifically avoids "hatchet jobs" where corporate politics are involved. "We want to make sure we're not just there to rubber stamp a decision they've already made. That would be a disservice to the client."
Defining problems
Most purchasing and SCM consultants say the proposal process is the right time for debating the precise nature of a client's problem. It is also the right time for establishing probable solutions and for defining the scopes of engagements.
Matthews of Andersen Consulting estimates that up to 70% of clients start out asking the wrong questions. "A difficult part of our process," Matthews says, "is to quickly get clients to ask the right questions." Some clients, he says, "just want us to go out and tell their suppliers to cut prices. What they don't consider is how they might be driving up their suppliers' costs with their certifications or their demand profiles." The slash-and-burn approach will yield results, Matthews says, "but the client will get only 20% of what they could get if they were to step back and look at the big picture."
Trecha of Integrated Strategies, says, "It's not uncommon for someone to request a proposal over the phone. We won't do that because we want to develop an understanding of what the client is trying to achieve. We typically conduct a work session just to work up the objectives. If the client says they don't have the time, then we know it's probably not a good alignment for us. It suggests they're not serious about understanding their opportunities to improve."
Even small initial differences in language can lead to big problems later, says Mercer's Martha. "We spend a great deal of time up front with a client, establishing clear lines of communication because what may be a small 'disconnect' can really grow as a project progresses."
Beware scope creep
Done well, the process of defining problems should yield a clearly defined scope for a consulting engagement. However, Purchasing's polling finds a deep distaste for "scope creep" among procurement executives, suggesting that good definition occurs less frequently than it should.
In part, the fear of scope creep may stem from the structures of some firms. As consultants (especially the full-service variety) are in the business of selling services, naturally they are expected to seek ways for developing new projects or to escalate existing engagements to other areas of their practices. Complicating this perception is the fact that a number of consulting houses have explicit business relationships with software firms, creating a fear that they might make expensive recommendations that are not in the client's best long-term interests.
Rich Mayberry, vice president and head of the procurement service offering at Gemini Consulting says, "Consultants get accused of trying to expand scope." But typically, he says, "clients see only the symptoms and not the root causes. They say, 'We have an inventory problem.' But what they really have is a demand management problem, a problem with forecast accuracy. We add value by understanding the root causes of problems." Gemini, he says, can't ethically become involved in a project when it believes a narrow solution is not the best solution.
Tom Tanel, president and CEO of cattan Services, says much the same thing: "You might start out in purchasing, but inevitably you end up in other areas." For every problem, Tanel says, there are multiple causes and effects. "Ninety percent of any solution might be provided by an entirely different function. Purchasing might have a problem with inbound freight costs. But it's not really a purchasing problem, it's a maintenance problem. Maybe the company is not predicting its maintenance requirements. Maybe it's not doing any preventative maintenance."
John Trush, partner champion of full value procurement in consumer products for Price Waterhouse Coopers says the road to becoming a full-service provider is often incremental based on performance and delivery of results. "It's rare to have someone say, 'We want you to be our full-service provider.'" The way to become a full-service provider, he says, is to take a small piece of a business, do good work, build credibility, and then leverage that credibility to the next level. "Sure we try to sell a full suite of services, but we do this by doing good work." The beauty of using a full-service consultant, Trush says, "is that they always have the resources to cope with unexpected problems." Still, Trush says he would be very wary about selecting a full-service consultant with no track record because, "each firm has distinct strengths and weaknesses."
By the time a proposal or business case is accepted by a client, most consultants agree that the scope of the engagement should be very well defined. But, even then, they say there should be room for flexibility.
Kelley of Gemini Consulting says "We never expect that the initial design of a project should be set in concrete. If we're not changing or tweaking in 10-12 weeks, then we're not doing our jobs."
Meadows of Deloitte Consulting says that while it's important for consultants to set expectations, "We're always refining, so communication is really important. Changes are always taking place, but people are aware of them as they occur."
"Scope creep," says McKinsey's Chapman, "is not necessarily bad, as long as you are creating value. Scope creep is really a symptom that impact is lacking. We believe that projects should be more than self-funding, that they should be returning eight to ten times our fees."
Jim Kelly, team leader with Deloitte Consulting/DRT Systems (and formerly VP of U.S. purchasing operations at Citibank) points out also that consultants are not always the culprits in cases of scope creep. Once an engagement has been defined, he says, "The client needs to stay focused on the items that are on the list. If an activity is not on the list, it may be adding to scope creep."
Veterans and virgins
There's a not-so-subtle marketing war being waged every day in the world of management consulting. It has to do with the way consulting outfits staff and manage their organizations. In one camp, there are the Goliaths--firms with three to five thousand employees--representing a mix of battle-scarred business veterans, people that were "born and raised" in the world of management consulting, MBAs with or without a few years worth of real-world experience, and "virgins" recruited straight from undergraduate colleges and universities. In the other camp, there are the Davids--firms with one, five, ten, fifty employees, usually representing a mix of battle-scarred business veterans and folks who have defected from the Goliath camp.
For the Davids, a big part of their sell has to do with the collective real-world experience of their staffs.
Michels of ADR North America, says, "The core difference between ADR and others is that we don't have a bunch of kids working here. Most of our people have at least 10 years of experience. We don't earn our money by collecting data. The client can do that a lot less expensively."
Tanel of cattan Services says, "All our people have been in upper, middle, or senior management positions. They are either certified as management consultants or certified in functional disciplines. They've been around the block. They can see things that other people don't because they've been on that firing line. Larger firms spend time gathering data at the client's expense."
In a prior life with a large consulting firm, Trecha of Integrated Strategies says, "My greatest frustration was working with a team that was right off the school bus. They were smart people, but they were trying to solve tough supply problems with very limited business experience."
Trecha says the staffing ratios (experienced leaders:inexperienced analysts) used by some firms can mean that consultants spend too much time documenting and analyzing a client's existing processes. "Clients should not be paying to educate a group of MBAs. To know where you're going you certainly need to understand where you've been. However, we try to spend a minimal time documenting the past, and instead focus maximum effort on looking into the future. This approach pays large dividends to clients, but only works when the people working the project are highly experienced."
In their own defense, big multidimensional firms emphasize their ability to leverage knowledge and talent. Meadows of Deloitte Consulting, says, "We provide the experience level necessary to deliver expected results. We wouldn't put a partner to work on sourcing office supplies, but we would put that partner to work on sourcing something as sensitive as marketing or advertising. We have a leverage model to balance the right experience with the staff necessary to complete the work.
Simmons of Ernst & Young suggests that firms with only veterans on staff can be lacking in analytical rigor. "We try to balance analysis with experience. There is plenty of demand for people who can do cost modeling, who can use decision support tools. Experienced business people are better at developing hypotheses and working intuitively. The best teams balance these characteristics."
Larger, more diverse firms also are more capable of putting together innovative combinations of expertise, Simmons says. For example, "If global sourcing is the issue, we might bring in our tax people. If outsourcing is the issue, we might bring in our real-estate people."
"We serve every sector there is," says Chapman of McKinsey. "We bring together teams of industry and commodity specialists and generalists. This special chemistry allows us to understand structure, conduct, and performance in most supply markets and to apply this knowledge to our clients' procurement organizations."
Schuetz of Deloitte Consulting says, "Our clients are looking for industry knowledge rather than company knowledge. Our industry people bring a strong perspective to new engagements. They understand industry dynamics and cost structures."
Going back to his days as a procurement executive at Citibank, Jim Kelly, of Deloitte Consulting/DRT Systems says, "For me, it was always important to know the credentials of the people with whom I would be dealing. It was annoying to educate consultants about my business. I wanted to work with people who understood the regulations governing financial services." In defining an engagement, Kelly says, "Clients should ask their consultant: Who will be working on my account? Will I be dealing with someone fresh out of college who will be following a methodology, or will I be dealing with someone with practical experience in my business? Will there be original thinking? Will the partner or business manager be active on the account?"
Ken Stork, president of Ken Stork & Associates and formerly Motorola's corporate director of materials and purchasing, says, "Choosing a consultant in supply management is like choosing a swimming coach to help you cross the English Channel. You better find someone who has swum successfully through those waters, and you better make sure that the person who sells you the service--the person who makes you feel comfortable with your decision--will be around to see you across the Channel. Make sure that your coach isn't going to let you drown while he (or she) is out looking for new clients."
Knowledge transfer
Despite their considerable differences on the issue of staffing, most consultants agree that client staffing of an engagement is, in many ways, more important than the consultants' staffing. The watchword, they say, is sustainability, and it's up to the client to make sure they extract the maximum of knowledge and new capability out of any consulting relationship.
"Our projects are always jointly staffed by clients," says Meadows of Deloitte Consulting. "The journey is as important as the result."
"We want our initiatives to be client based and client owned," says Trecha of Integrated Strategies. "We don't report and then disappear. For truly sustainable results, there must be knowledge transfer. That means working shoulder to shoulder with clients, sitting in their environment as they put new skills into practice."
"We don't like to work in a vacuum," says Gemini's Mayberry. "We want client people working with us to devise a strategy. Our average ratio is one consultant to 6-8 team members. We typically create steering committees to direct projects. Our job is to build client capabilities. Full-time team members are almost always a requirement of every project. We want isolated resources that won't be caught up in the crisis of the day."
Matthews of Andersen Consulting, says "So few companies want to put their own people on a job with us. But in most cases we won't take on an engagement unless the client puts the same number of people on the team as we have. Otherwise, we won't get sustainability, we won't get transfer of knowledge, we won't get an understanding of the process, and we won't get ownership."
Says Trush of Price Waterhouse Coopers: "My goal is to transfer my knowledge to the client. If they're smart, they will assign one person for every consultant. Wise clients take advantage of the opportunity to pick our brains."
Tanel of cattan Services, says, "We always ask for a dedicated project manager. Our job is to make the client's people look good. We provide the coaching, mentoring, and training on twelve or thirteen specific subject matters. We're not there to make the organization look bad. We're there to make them better."
McKinsey's Chapman remarks that, "We are committed to building capabilities within our clients so that we are never in a position of being retained to do the same purchasing work twice." Ramsdell, also of McKinsey notes that, "In addition to creating value, it is always our goal to build capabilities within the client's organization and to make ourselves obsolete as quickly as possible. We call it organizational muscle building."
"One of the premises we work under," says Mercer's Martha, "is that the most successful projects have joint involvement between the client and ourselves."
Simmons of Ernst & Young, says, "It is one of our principles to create a sustainable benefits stream because we don't want cost to creep back in. We do this by transferring knowledge and by institutionalizing changes so the client won't go back to business as usual after we leave."
Metrics are a preferred method of embedding changes, consultants say. Kelley of Gemini Consulting says, "There is a tendency to overemphasize training, but two-week courses don't really change behaviors. Performance measurements change behaviors and actions."
"To build sustainability," says Slaight of A.T. Kearney, "we first conduct knowledge transfer from the lessons learned from over 2,000 purchasing categories amounting to over $100 billion in spend. Secondly, we design sustainability into our projects and support it with a variety of technology options."
Don't hire a consultant...
* "To vindicate a decision that has already been made," says Joseph Sandor, director of purchasing, Sara Lee.
* "When a company wants to drive change but doesn't know where it wants to go," says William Stewart, vice president of materials management at Union Camp.
* "When you have the resources to do something yourself," says Norman Douglas, director of purchasing, Weyerhaeuser.
* "For ideas," says Dick Hottinger, vice president and chief procurement officer, Owens-Corning.
* To tell you how to run the business or what your mission should be," says John Blaine, vice president supply management at Sun Microsystems.
* "A very expensive way of just providing extra bodies," says Monty Dickinson, vice president, aeronautics materiel management center, Lockheed Martin.
* "To do your work for you. If someone does your work for you, then you won't be able to sustain results," says Doug Grimm, vice president, worldwide strategic sourcing, Dana Corporation.
* "To promote a pet idea. Maybe you have not been able to sell it so you want to get the prestige of a consultant. You're paying money because you have not been articulate," says R. Gene Richter, vice president and chief procurement officer, IBM.
Are consultants after your job?
The advent of procurement and SCM consultants into an organization tends to inspire paranoia about job security--sometimes with good reason.
Most procurement and SCM consultants are very frank in suggesting that a percentage of procurement personnel may be incapable or simply unwilling to make the leap into strategic sourcing and supply chain management even at executive levels. Tim Chapman, of McKinsey & Co., says, "Sometimes it is the case that the leadership in purchasing does not have what it takes. It's not unusual for our clients to find that a large proportion of their purchasing personnel need to be redeployed on the journey to world-class because they don't have the right skills for strategic sourcing duties."
Bill Michels, CEO, of ADR North America says the firm's assessments typically suggest that some reorganization of purchasing is warranted. "We assessed one company where they had 54 buyers for a $150 million spend. We said they only needed six buyers. They got upset. They wanted us to train 54 people to walk all over each other." At the same time, Michels says, "Some organizations are fine, they just don't have confidence because they haven't been given the authority. Management has put up roadblocks."
Typically, Michels estimates that 75% of procurement people will survive over the long term. "People that are open to change will always survive," he says.
"You can draw a matrix," says Steve Trecha, president and CEO of Integrated Strategies. "Some people will be capable and willing to change. Some will be capable but unwilling to change. Others will be willing but incapable of changing, and some will be incapable and unwilling to change." People in the last group, Trecha says, may have something to fear. Those in the third group (willing but incapable) can usually be redeployed to an area that matches their skill sets, he says.
People in the second group are a toss up, consultants say. Some will be won over and some will leave, depending on their degree of intransigence. Meantime, the capable willing types (most consultants say a majority of the people they've encountered fall into this category) will probably end up liking their jobs a whole lot more.
Mark Simmons, director of Ernst & Young's Global Sourcing & Supplier Management Practice, observes that "A lot of what people in purchasing do is execution--ordering, chasing late parts, dealing with quality problems. It's surprising what most people can do when you free up their capacity." While he does see some fallout in procurement--people without the capability to perform more strategic tasks--Simmons says the emphasis is usually on bringing sharp new people into the purchasing organization--people from diverse disciplines, people skilled in analysis and information technology applications.
What's a small company to do?
Most (but not all) of the consulting outfits that Purchasing contacted for this report are simply too big-league for a large majority of U.S. companies. As reputations go, these firms are seeking high-impact, high-visibility engagements. They're not interested in small companies, and frankly, small companies can't afford them.
Tom Tanel of cattan Services says, "There are plenty of people out there that need help, but they don't have hundreds of thousands to spend on one of the big firms. Big consulting companies want to do only massive, grand-scale things. We're happy to take on the other things."
For smaller companies that can't support consulting rates, Steve Trecha of Integrated Strategies says his firm has developed a service called on-site resources. "These are people with extensive industry experience versus simply consultant skills. They can leverage the firm's knowledge for much lower long-term rates. The service has been successful especially in industries characterized by dramatic change where timing, experience, and implementation know-how are paramount."
John Trush, partner champion of full value procurement in consumer products for Price Waterhouse Coopers, says, "We don't work exclusively with large companies. We have a midmarket type of group that goes to midsize and smaller companies." In his experience, Trush says very small companies are typically less willing to invest in outside advice. This is especially true, he says, if they've grown from the ground up and haven't endured the types of growth spurts (acquisitions are a good example) that tend to create unmanageable leaps in complexity.
Others suggest that savvy small companies may be able to take from their customers, what those customers are taking from the big-name consultants. "We are finding," says Jim Schuetz, partner and leader of the global supply chain results service line at Deloitte Consulting, "that our clients in many industries are becoming consultants to their smaller suppliers. This gets into the whole supplier development process and we try to help our clients to deploy strategies for leveraging knowledge to the supply base as a means for benefiting the entire supply chain."
Very daring companies might gain access to big-name consulting by offering to test new ideas that would be more difficult to implement in larger, more bureaucratic organizations. Tim Chapman, director, senior partner and a founder of McKinsey's purchasing practice, says the firm likes to work with MIGs--market innovating growth companies. "These firms may have little cash with which to pay us, but we've formed a risk management group to explore alternative forms of payment." McKinsey wants to spend time serving all sizes of companies in all sectors of the economy. This is how we share best practices and how we will win the battle for talent.
Ken Stork, president of Ken Stork & Associates, says mid- or small-sized companies can always take advantage of the education consultants provide. "Outside advisers can provide good value by raising awareness of problems and opportunities. The same is true for larger companies before they go out and start a major project." Stork says small companies may also benefit greatly by taking advantage of the assessment or "benchmarking" services offered by numerous smaller consulting outfits. "Small companies can benefit from a three step process: First, they can undergo an assessment to see where they stand and to identify the quick hits or 'low hanging fruit.' Second, they can obtain some custom education about new processes or existing solutions that are relevant to their problems. Third, they can employ an adviser or coach to help them implement the solutions they choose." Small firms, Stork says, may be more suited to helping small companies because "they don't have the pressures of maintaining an army of consultants. They may be more motivated to bring a client up to self sufficiency."
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