August 1, 2013

Why Hire a Consultant to Point out the Obvious? A Business 101 Reminder

As the person who knows the most about your business, aren’t you the obvious choice to uncover your issues and find the best solutions?

In the article below, a CECON business expert outlines how a consultant can offer a fresh perspective and  see things that you may be overlooking. While the examples are basic, they show how a few hours of a consultant’s time can often  pay for themselves in increased profitability.

Case 1.  A restaurant owner couldn’t figure out why his business wasn’t doing nearly as well as  his market predictions. He had quality food prepared very well, slightly high yet not unreasonable prices, and had just refurbished the restaurant. The business just wasn’t there. He told me about this and said that it must be “the economy.” I told him it wasn’t the economy and then asked him where he was located during the restaurant hours. He said, “In the back office with the accounting books.” I suggested that he get out at the hostess’s desk. He did that and saw that she wasn’t there half the time. He also saw that the employees - servers and busboys - that walked by the front area didn’t look at the customers waiting at the hostess’s area. He also saw that two out of three waiting customers walked out in less than 5 minutes.

I told him that I thought he had his employees take a graduate level course in “how to avoid eye contact or any communication with the customers” since they were very good at it. That avoidance was the reason people left the restaurant. He actually had the customers in his restaurant and then - by ignoring them - invited them to leave.

I said “All your predictions about how many persons will come to your restaurant are true. The fact is, they come to your restaurant and then leave after being ignored. You measure how many meals you serve; you don’t measure how many meals you lost due to people leaving. People who enter your establishment like to be acknowledged, and don’t like to be kept waiting. When you are there greeting the customers, they stay. Instruct all your employees to smile and say “Hello” to the customers.

The problem was in front of him but he wasn’t looking. Also, the solution was in front of him, a solution which he implemented promptly.

Case 2.  Let’s call the product “Widgets.” A company was very successful in producing the highest quality widgets. Then suddenly, customers began returning their orders because the company’s quality had decreased significantly. This puzzled management since they had always been committed to high standards. When I asked the President what may have changed just about the time the quality dropped he said, “Nothing changed. I don’t understand this.”

Of course he said that nothing changed. If he knew what changed he would have fixed things himself. After I convinced him that something changed, otherwise the orders wouldn’t be returned, and that he simply hasn’t yet identified it, he emphasized that he even installed a bonus program for the plant manager.

When I said, “Isn’t that a change?” he said that he didn’t think about that.  I asked what the bonus was for. The reply was “For the amount of product shipped, of course.”

Now, jumping to the end of the story, the problem was that the bonus for the plant manager was for the number of items shipped and not for the quality of the items. Nothing was deducted from his bonus for the number of items returned. Essentially, the plant manager was directing all his thoughts to his bonus and was shortcutting quality in production by shipping everything that the plant made. He did this to get a nice bonus. That was his motivation. As a result, the quality was slipping and the customers were leaving.

The answer to the problems of loss of customers and decreased quality was not hidden. It was just overlooked. The two cases presented above have the common feature that the problems - and the solutions - were immediately in front of the persons.

Sometimes you need to engage the services of a consultant to see what’s in front of you because you’re too busy with other things to see such problems and solutions. The consultant provides concentrated effort on identifying and solving problems, with no distractions caused by other things. The consultant is also looking at the problem as an outsider, with a fresh, unbiased perspective.

There is an adage with consultants that if you want to know what the problems are, just ask the persons on the line. They will tell you. If you want to know what the solutions to those problems are, just ask the same persons on the line. They will tell you.

Why doesn’t management do that? They are too busy with other things. Maybe a consultant could help.

The author is a Former FDA Employee, Regulatory Consultant, Expert Witness and Pharmaceutical Chemist. He has written management textbooks, works of fiction, and short stories, and is a consultant with  The CECON Group, Inc.


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