November/December 1989
Management consultants, like computers and market research, are potential business resources. Learn if they’re the right tool for you, and, if so, how to hire and work with them.
By Elise R. Browne
Elise R. Browne is managing editor of Scrap Processing and Recycling.
"Outside expertise in any given area is a resource that shouldn't be overlooked," says J. Dean Owen, a Muskegon, Michigan-based management consultant. "It's just like any other element of a business--it's a tool for getting things done." Some scrap recycling executives, including one of Owen's clients, James A. Fisher, president, Fisher Steel and Supply Co., Muskegon, are taking advantage of such a resource. But others, says Fisher, who's also secretary of the Institute of Scrap Recycling Industries (ISRI), are reluctant to admit that they need a consultant's help. "That can be tragic," he says, "you should be open to a range of possibilities."
How do you decide whether a management consultant is a resource you can use? Realize that consultants can be applied to a myriad of situations, not just those requiring problem solving. Companies that are exploring new business opportunities, for example, may not have the staff time to take advantage of those opportunities, but could hire a consultant to at least lay the foundation.
Even consultants that are brought in to solve specific problems may stay on to help the firm with other management concerns. That's what's happened at Fisher Steel. The company hired Owen four years ago in response to operating problems it was experiencing with its then-recent growth into nonferrous operations. Owen helped Fisher develop a strategic plan to deal with the new structure and has continued to assist in other areas, such as organization chart development, estate planning, and potential project assessment.
ISRI Second Vice President Arnold Gachman, president, Gachman Metals Co., Fort Worth, Texas, also hired a consultant in response to a specific management concern, but continues to use his services. Sam Lane, a principal with LBF & Associates, Fort Worth, was called in 1986, following Gachman's leveraged buyout of the company. Gachman wanted Lane to assess the firm's strengths and weaknesses and propose ways to build production. Lane accomplished those tasks, then continued with the company, implementing his proposal--helping the company track costs, motivate employees, and create an objective sounding board.
It's conceivable that both of these scrap executives could have built up their internal resources--their staffs--to manage these undertakings. Why, then, did they choose to implement outside assistance? Relying on permanent employees, says Gachman, can be much more costly, plus you lose the objectivity and cross experience consultants can offer from working with many corporations on many projects.
Finding a Consultant
When Fisher decided that his company needed to hire a management consultant, Owen immediately came to mind. The two had known each other for years, working together on the local United Way and Jaycees organizations.
If you don't already know a consultant who you believe you could work well with, try to get referrals from people who have had success with consultants. Discuss what the consultant's duties were and his style, and compare it to what you have in mind. "If you know the [person making the referral] is real tough and has high expectations and is happy with the consultant," says Lane, "chances are you're going to be happy with that person, too." Gachman agrees with that philosophy. Although he knew Lane as a child, he didn't know he had become a management consultant until other Texas CEOs gave him referrals on Lane. "His credentials were good," says Gachman, "and I felt that if he was doing a good job for them, he certainly could do a good job for me."
Even a consultant with excellent references and accomplishments won't be right for every situation. In fact, whether the relationship will work usually can't be determined until it's been tried. And probably the biggest determinant is the personalities of the key players in the relationship, not consultant performance. Fisher cites "good chemistry" and "mutual respect" as the chief reasons his relationship with Owen works. The two also have "similar management styles ... but [come from] different generations and different business backgrounds. ... There are enough differences to complement our style similarities," Fisher says.
Gachman compares finding the right consultant with finding the right doctor: "You have to have a feeling of trust, a feeling of comfort, and an ability to deal with him or her." And if you don't feel comfortable with the consultant and aren't happy with his or her accomplishments, you should react the same way you would with a doctor: find another one.
Priming All Players
While executives in the scrap recycling industry are increasingly employing consultants in their operations, finding a consultant that's a scrap-plant management specialist would be difficult, and, probably, unnecessary. Unless you have a specialized need, like an environmental or equipment concern, a consultant with a good business background is appropriate, all the men interviewed here agree. Such consultants will need to be educated on some of the idiosyncrasies of the scrap recycling industry, such as its trading and processing aspects, but, for the most part, they should be able to prepare themselves by asking questions and observing the operation.
Dialogue between the consultant and company staff also is valuable preparation for both parties. If your employees don't accept the concept of using the consultant and come to trust that person, Gachman says, "you're just throwing your money away." Owen agrees: "Effective programs must have buy-ins by the people who are going to be the ones making it work."
One reason employees may be hesitant to accept the consultant's presence is fear that the consultant is there to replace them. Owen suggests presenting a "clear objective of why the company's doing this ... and communicating it in a fashion that lets people see that it's a benefit to them, ... that it's not a displacement or threat." Fisher took this advice in preparing his staff for Owen's arrival. "I was frank with them that we needed help and that Owen was the one to provide it," he says.
Road to Results
Ultimately, it's the attitude of a company's top decision maker that determines the success of using a consultant as a resource. Consultants and their clients advise that staying involved is key. While most CEOs are not going to abandon control of their companies, there is a tendency in some to back off when they see a consultant taking responsibility. And that can be counterproductive to the company's growth, says Lane, who also believes that the responsibility for keeping the executive involved lies with the consultant. "A good consultant will teach you how to fish, not give you the fish."
There's nothing wrong with allowing the consultant to play a big role in the decision-making process, as long as it's a role and not the final word. "Never let the consultant make decisions for you," Fisher suggests, "always be sure you are making decisions and are comfortable with those decisions."
Executives also must feel comfortable with the recommendations that their consultants make, otherwise they should veto those ideas. "If the owner thinks it sounds crazy, it probably is," says Lane. And if that crazy idea is implemented anyway, says Fisher, "it's not [the consultant's] fault, it's my fault."
Are We There Yet?
Organizational change can be a slow process-much slower, in fact, than many expect. It's important, then, to thoroughly discuss your needs, goals, and time frame with potential consultants. Because the timing of simpler goals is usually more predictable than that for broad strategies, breaking your goals down to their most discreet form may produce the most accurate timetable. In addition, goals and time expectations that were set at the beginning of a long-term relationship with a consultant should be frequently evaluated and updated as necessary.
When Gachman hired Lane three years ago they set a goal to increase business 25 percent in five years. Thanks to "very good business" they've already surpassed that goal and have set new ones. In fact, every year, Gachman and Lane set new plans and goals.
Even if you're not ready to make such a lengthy commitment to a relationship with a consultant, don't hesitate to contact one or more consultants about the possibilities. It costs nothing to call people in for proposals, and, says Owen, after you evaluate them you can always decide not to use them. A decision not to use a consultant should be weighed carefully, however, since it's a decision not to use all the resources available to you.
Consider the experiences of two scrap recyclers who have used consultants to their benefit and encourage others to do the same. While Fisher has a master's degree in business administration, he believes that training, even added to his practical experience, doesn't qualify him to know everything about running a successful corporation. Fisher says it's important to him to work with a consultant to "learn about what I do best and why I need support." As Gachman summarizes: "Two heads are better than one. There has to be one boss, but that boss should be able to avail himself of all the resources at his disposal and should be mature enough to be able to listen and learn."•