Do Consultants Add Value?

When Elements was first conceived it seemed then (and still does) like a really good business idea.

To provide operational and mentoring support to the automotive industry in a time when head count reduction had resulted in people being so busy over the last few years that they were fast becoming ineffective seemed a good alternative to having to bring in further fixed cost at this time. To add to that a chance to engage an individual with a vast amount of experience and a credible reputation for exceptional work it really did seem like we were on to a winning formula so we asked ourselves why it has taken so long to get any traction and then something happened and it dawned on us. We were recently completing a return on companies house and as part of the process had to record an SIC code. After much searching when choosing a code that could reasonably describe what we do all we were left with was “70229 – Management consultancy activities other than financial management”. This code “defines you” in the eyes of the wider world and puts you in a box (or should we say pigeon hole?!) and this is where it all started to make some sense. Nothing wrong with that you may say but let’s strip out one word in particular.

What springs to mind when you hear the term “consulting”?





We asked a number of people exactly that question and with varying degrees of bluntness (we really can’t repeat some of the comments!) it mostly came back that a consultant was someone that the senior management brought in because “John” the manager wasn’t doing his job very well and something needed sorting. For those who had experience of “consultants’ when asked if they felt they had added value in most cases the view was that there was a short term improvement but things generally reverted back to the same level of performance and/or the same type of behaviours. The last question was were they good value for money? Now some had no idea how much this interjection had cost the business as it had been sanctioned on high but again because there was no apparent longer term improvement the view was no it wasn’t good value at all.

So why such disdain then?

In 1995 the inimitable Tony Benn gave a speech in the House of Commons and its content is still quoted today some 20 years on…

“I expect that the House has heard of the little document which is circulating, about the boat race between the NHS and a Japanese crew. Both sides tried hard to do well, but the Japanese won by a mile. The NHS was very discouraged and engaged a consultancy. The consultant came to the conclusion that the Japanese had eight people rowing and one steering, whereas the NHS had eight people steering and one rowing.

“The NHS appointed more consultants to look at the problem and decided to reorganise the structure of the team so that there were three steering managers, three assistant steering managers and a director of steering services, and an incentive was offered to the rower to row harder.

“When the NHS lost the second race, it laid off the rower for poor performance and sold the boat. It gave the money it got from selling the boat to provide higher than average pay awards for the director of steering services…..”

Now we make no judgement or opinionate on the political views of the late Mr Benn but this parable does resonate a little with our need to understand as this clearly puts the term “consultant” in league with the devil so how do we get people to engage with us that have such views? How do we get people to consider using an external resource in a positive way that can bring longer term improvements?

Well let’s try and take a step back for a moment and review what operational managers generally do in a modern motor retailer. Do they operate the business which employs them or do they inspire greater things from their teams and in themselves by constantly attempting to be different, think outside the box, be strategic or carry out market research to see where the real opportunities lie? An interesting question that when answered with 100% honesty will have us saying the former rather than the latter in most cases.

By his own admission our Managing Director told us that in his last operational role he started very much being that strategic leader and the results spoke for themselves in fact that were the best the dealership had ever delivered but, only 12 months after starting, he found himself turning into that operational expert that administers a result rather than driving it, primarily because he was becoming bogged down with reporting, endless form filling, pointless meetings, compliancy audits and all manner of standards reviews on the type of woodchips were in the flower beds (we hope he’s being flippant?!) and stated this is why he chose to set up Elements to get back to being an inspirational business leader.

But how do you break that magnetic pull to mediocrity in management and does this indicate that the people we employ are poor at what they do or just a by-product of how we make them work? How many times can you think of where what was once an exceptional employee or manager turned into a complete basket case almost overnight. How can that be? How can someone who has demonstrated great skills all of a sudden lose them? Why does someone go from hero to zero in such a short space of time? It’s quite timely that a man who was only very recently referred to as one of the best (and his CV supported) one of the most successful football managers in the world has been fired for underperforming after taking his team to the top of one of the finest football leagues on the planet only a few months ago. Again how can that be? (a rhetorical question for all you passionate football fans!)

In the automotive industry it’s simple, really simple and the causal effect is, sadly, unlikely to go away. The administrative & compliancy burdens of a modern motor retailer are huge and they generally fall to people who have the term Manager on their business cards so we must learn to adapt and compensate. We must force feed inspirational leadership skills back into the day-to-day and the best person to do that is likely to be someone who doesn’t have to worry about the aforementioned and whose focus is simply on helping you sell more cars, more finance, more hours, more parts and at the same time delivering an exceptional customer experience.

This is where your business consultant comes in as he or she is detached from the day to day so none of the things that get in the way of doing good, profitable business matter to them and this is why we believe there is a market for consultants. Do they add value? Yes good ones do (and by the way we only have good ones). Should you engage one? Well of course we would say yes but ask yourself the question. Does some aspect of your business require a bit of a kick start? Is CSI dropping in Aftersales, are you struggling to make volume targets, are your profits per unit way off your composite averages, are you struggling to retain and attract new staff to your business etc. etc. If you can say yes to any of these questions either now or at any time in the last 12 months then maybe you would benefit from a wise old owl (they’re not all old by the way!) sharing their vast knowledge with you and your management teams. It’s not that your managers are poor, it’s that they don’t have enough time to do the things they need or want to do well.

Elements are here to help and if any of the above has been of interest and you would like a no obligation consultation then please do get in touch. After all you’ve got nothing to lose and everything to gain.

Ingatestone Forge, 3a High Street, Ingatestone, Essex. CM4 9ED.
Email: | Phone: 0330 019 5026

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