The consultancy market is failing to satisfy the needs of the directors of medium-sized businesses. This is a failure in terms of:
1) not giving clients what they really want and need, and
2) missing opportunities to deliver consultancy that adds true value to the businesses of clients.
FACT: Middle market clients want more than just more sales/profits/customers
Most business plans, and all business how-to providers, tend to be quantitatively focused: they talk numbers, KPIs, money, money, money. And of course they are right to start there – no money, no business. Where they are wrong is stopping there – failing to take a business on to bigger, better things.
What owner-directors want, where their advisers fail them, is with a bigger picture. This is not about even more profit or even more staff (although it might be); it is more about what it is that directors are trying to create and achieve with their businesses. This nebulous aspiration is best encapsulated in the Greek work, eudaimonia.
In search of Corporate Eudaimonia
Eudaimonia (literally, from the Greek meaning wellness or good spirit) is perhaps best translated as ‘human flourishing’, and by implication is all about achieving the best possible balance of financial, physical and moral well-being.
In a phrase, getting the best out life and work: what we want for ourselves, fellow owner-directors (and most shareholders) and for the company. Consequently, it has wider perspectives than pure maximisation of profit.
It’s about creating long-term infrastructure solutions that will help build and maintain company growth, higher margins, and, ultimately, higher profits and exit value, but…
… not building it only on financial performance. Respecting that sustainable corporate success requires a great brand, great products, great people, loyal customers, and an ongoing investment in development.
Owner-directors as a breed in its own right
In practice, very small businesses (let’s say under £1m turnover or have under £100,000 net profit) are owned and run by owner-managers, who cannot but work in the business day in, day out.
By contrast, owner-directors largely work on their business, while still working in it. Their role is more strategic and wide – and their businesses are usually well-established with a functionally defined staff, and a brand (not just a business). Their businesses have a turnover in excess of £1m and up to £50m, and a £500,000 net profit potential.
What owner-directors believe and want
Experienced owner-directors don’t believe in miracles, or the efficacy of quick fixes. They don’t believe in simple formulae for business success, and they tend not to believe in ‘gurus’. They tend to have a justifiably high opinion of themselves mixed with real-world, enforced humility.
They think they have some – but not all – of the answers. They know they have done many things right, and failed with many others. They understandably don’t want to be preached to, nor have their experience and expertise ignored, or undervalued. They want heterarchy (a system of organisation where the elements are unranked) not hierarchy. They want to work in a peer-to-peer manner with mutual respect. Almost everything about the ‘guru’ approach is wrong for them – and it irritates them.
Owner-directors don’t want and don’t believe the MBA In A Day proposition. They probably don’t believe in MBAs, and certainly don’t believe you can learn that much in a day. They see it as marketing nonsense that lacks credibility – and consequently doubt the value of anyone who promotes such a thing.
Owner-directors don’t believe that their business can be, or needs to be, transformed. They want improvement, not revolution, and they know that improvement is as much to do with how their business operates as anything related to direction or strategy.
They are highly suspicious of ‘consultants’, especially those who offer high-level strategy without pragmatic implementation, and equally of those of the short-sharp-shock school of thinking.
They are looking for evolution: performance improvement over time, fitness in changing markets.
What is to be done?
I have simply identified what seem to be the real needs of a large number of owner-directors. There is a gap between what the clients want and what the suppliers are delivering. It will be the generation of suppliers who understand the real needs of their clients that will prosper in the future.
Basically, consultants are giving clients what they, the consultants, think the clients need. 79% of consultants believe they deliver an exceptional customer service. But only 16% of their clients agree. That’s a service delivery gap of 63%. (Mind the Consultancy Gap Survey, 2014).
Behind these figures lies the fact that clients want something different from what is being offered and delivered. It is time for the consultancy industry to wake up and smell the coffee!