My late father, George Segal, who ran Sanel Auto Parts for four decades, hated the idea of hiring consultants. Dad viewed them as overrated, overpaid, self-proclaimed business gurus who have very little to offer.
He imagined someone who borrows your watch then tells you the time. While I have always respected my dad's sound judgment on many matters, our perspectives on this one differ greatly.
Understandingly, many businesses have misgivings about consultants. Some fear that an outsider will pass along company secrets to another business. Given the competitive environment, some managers rationalize that is it is a better to sacrifice the inconvenience of running understaffed over a short period of time than to lose their competitive advantage for the long term.
As a former buyer and category manager, I experienced the unintended consequences when a department cuts back on staffing. When an overflow in tasks had overwhelmed the group or when someone had left, everyone was trying to keep their head above water rather than focusing on their respective duties. It resulted in multiplying the odds of making costly mistakes.
Prep For The Future Today |
|
|
Be a part of the inaugural Business Outlook Conference this July. For only $99, you will hear about the future of automotive and how it will affect your business from executives with IBM, AlixPartners, ETI, CCAR and much more! |
|
|
Other companies are hesitant to invest the time and energy to walk a consultant through what they perceive as a steep learning curve of mastering processes, operations and strategy. They question how much cost savings would be reaped when it seems more efficient to make do with the current team.
In reality, a highly skilled consultant can jump in to execute the tasks until things stabilize. This allows upper management to focus on growing the business instead of divvying up their energies to do someone else’s work. Because consultants can be a temporary solution at best, hiring, training, and benefit costs should be lower, particularly compared to a full-time employee who may not work out for the long term.
Anecdotally speaking, I tested out some of these objections with five segments of the auto care industry: two mid-Atlantic warehouse distributors (WDs), a North Carolina WD/multi-store chain, a Michigan based hard parts maker, and a New England based manufacturer’s representative. Two observations from these separate conversations deserve acknowledgement. Some details have been changed for anonymity.
First, each person confused a temporary or an interim worker as the same as a consultant. A former director for Henderson-James, a Boston career-management service, clarified that temporary or interim help describes someone who fills in during an absence or because of a finite need. While some companies use the word consultant or contract employee to describe an interim person, most often the word consultant refers to someone who is an expert in a particular area.
Second, everyone agreed on a common threshold when it makes sense to sign on a consultant. This person must offer a proven industry background to expand market share, grow profit or revenue, reduce costs, or any combination of these elements. Furthermore, this person is willing to carry out either tactical assignments or strategic projects.
A company would hire this consultant to get them from where they are to where they want to be. Sometimes management needs someone else to knock off the low-hanging fruit that no one else in the organization has the time to do, or a fresh set of eyes to offer an original perspective. Some projects may end up being more mundane than the glamor of unfurling a grand plan when in fact management wants someone to implement a specific task.
One multi-store owner I spoke with desired someone to add to his company’s bottom line. He asked for a proposal to improve his front room displays, and he received a visual and written report that illustrated how his competitor’s use of shelving, end-caps and counter space drove profitable sales.
Another owner of a Parts Plus WD declared that optimizing product coverage was a priority for his company, but that he was too busy to explore best practices. Under an ideal scenario, the owner envisioned a consultant submitting an outline that fits his company model of maximizing supply chain efficiencies. Specifically, it would highlight how cost and time could be improved by setting up a back-order system, a fill-rate model and a special order work book.
In each example, the owners signaled their desire to tap into the unknown – things they didn’t know but wanted to. Each wanted an outsider with no history with their business to question, challenge and test pre-existing frameworks.
When I raised the subject about the danger of losing company secrets with a manufacturer’s rep agency principal, he replied that leaks are a fact of doing business whether it concerns a full-time employee or someone from the outside. It is a chance that every manager must take. Then he added that any self-respecting consultant would want to maintain a high degree of discretion to earn repeat business. Moreover, it is common practice that companies require consultants to sign a non-disclosure agreement.
Through these discussions, I began to see a mutually beneficial arrangement that gives both the employer and consultant flexibility. My rep friend views consultants as another tool in the toolbox that can be pulled out at a moment’s notice without taking the full-time staff away from their primary duties.
This give-and-take dynamic mirrors a rising trend in high-skilled help noted by leading papers such as The Wall Street Journal. Consultants may enjoy the work-life balance of being able to spend more time with their families. Meanwhile businesses can get a better bang for their buck because that is one less person on the insurance plan. This leaves the consultant bearing the burden of obtaining affordable health care.
Hiring a consultant is not appropriate for every business; nor is it compatible for every manager. However, in many cases, a good consultant – like a doctor – can diagnose trouble, identify strengths, and supply information and resources to improve your department or business. Then, what you do with that information is up to you. Ultimately, given the changing dynamics that are shaping the auto care industry, it’s often best to explore all options to add to the bottom line.
Subscribe to Aftermarket Business World and receive articles like this every month….absolutely free. Click here.
