When to Hire a Performance Improvement Consultant Back

When to Hire a Performance Improvement Consultant

By: Mark Nixon, Managing Director

When you’re in the business trenches, there are a lot of things that you have to take care of.  As you’re juggling every component of your business, there are times where you find yourself facing obstacles that you just can’t seem to get around. That’s when you need to look for professional assistance, in the form of a performance improvement consultant.

A performance improvement consultant is someone who is focused on finding ways to improve every major line item on the income statement. This includes revenue, COGS, expenses, and so on. They work with your organization to identify the problems, come up with a plan to solve them, and then provide support along the way until things are rectified.

Even though these consultants can be extremely valuable, there are some common reasons why company owners and other C-level executives are hesitant about hiring them.  And so, in this article, I thought I’d run through some of these common objections and why they represent significant mistakes for businesses of all kinds.

Waiting Until It’s Too Late

In every aspect of business, being proactive is incredibly beneficial. When you see obstacles on the horizon and prepare for them in advance, you’re much more likely to find the right solutions to get around them when you get there.

This is critical when it comes to hiring a performance improvement consultant.  So many business owners wait until it’s too late because they convince themselves that things aren’t as bad as they seem, or that with some time they can turn the ship around.  It can be difficult to reach out for help when it’s a business that is so close to our hearts.

Unfortunately, when you wait too long to seek help, you severely limit the range of potential solutions, reducing your chances of success. Whenever your banker, accountant, lawyer, or investor suggests that you should bring in a consultant, that should be a signal for you.  It’s possible that these trusted service providers are seeing something within your company that you might have a blind spot towards.

In other words, a performance improvement consultant can give you an objective, emotionless assessment of the situation and help you to plot a robust and practical action plan. 

Thinking It’s Too Costly

Another impediment that gets in the way of hiring consultants is the perceived cost.  You might already be cash-constrained and can’t quite justify paying a professional to help you sort out a particular problem.  While this is an understandable concern, if you look a bit deeper – you might realize that there are also costs associated with doing nothing.

The costs-of-doing-nothing could involve the following:

  • What damage could you do to your relationship with your bankers and investors?
  • How could your customer experience degrade if you don’t make a change?
  • How will you maintain your vendors if you aren’t able to fix the internal problems?
  • How much more in sales or profits might you achieve if problematic issues could be resolved?

These costs are somewhat hidden which makes them pernicious.  Once you realize this, the consulting fees required to fix the problems become much more palatable. Most good performance improvement consultants yield over 5x their fees in improvements.

In addition, many consulting firms are more than happy to set up a success fee arrangement where they reduce your fixed professional fee in exchange for a performance-based fee where you can both share the upside. There are always ways to structure the arrangement such that it will give you the value you need without constraining your finances entirely.

Thinking They Can Handle It Themselves

I’ve alluded to it above, but pride and ego (and, we all suffer from both!) play a big role in this as well. We don’t want to appear weak, incompetent, or incapable and so often we’ll trudge on, day-to-day, ignoring the problem that is staring us in the face. We’ll write off consultants as “too time-consuming”, not acknowledging the potential benefits of having a fresh set of eyes on our business.

As you might imagine, this is sub-optimal. Great leaders are those who can recognize where they are falling short and make the necessary moves to bring in top talent to help them. Often, you’ll be too busy with the day-to-day operations to step back and think more holistically, and that’s where a performance improvement consultant can be really useful. They don’t bring any preconceptions and can provide honest, candid feedback to your leadership team.

For example, if you’re looking to make a major transaction, it can be invaluable to have a fresh perspective on it to ensure that your analysis of the potential synergies is accurate, and to validate whether you can truly capture the value you think is there for the taking. As we know, capturing the elusive “synergy” value from a deal can make or break the transaction. Assessing what is possible, practical, and what is not realistic, as well as ensuring the actual realization of these synergies take on great importance. For these big moments, having external expertise on call is incredibly valuable.

Even the best C-level executives have coaches/advisors/consultants to help them get the most out of themselves and their organization.  It works.

Thinking Their Company Is So Unique That No One From the Outside Could Possibly Identify Improvements That Would Succeed

Building a business is a very personal thing and as we are so close to it, we see it as this entirely unique and special creation that only we could truly understand. We get attached to it and can be a bit dismissive of someone external to the organization telling us how we could improve.  After all, who could be better placed to identify those recommendations than ourselves?

However, with experience, you learn that the challenges businesses face are remarkably common across industries and regions. Regardless of what line of business you’re in, it’s likely that you’re looking to increase revenue, limit your cost structure, reduce expenses, develop new products, and so on.

These problems are timeless, and a performance improvement consultant who has spent his or her career working through these problems with companies of all types, can give you the sort of insight that you might be missing. They have seen the good, the bad, and the ugly and can help you leverage the learnings from those who came before you so that you don’t have to learn the hard way for yourself.

Whether it’s finding new transactions with leverage and synergies, or just an internal system fix that can unlock new potential – there is always value in getting an outside opinion.  When you work with the right partner, they’ll be able to adapt their problem-solving toolkit for your unique circumstances and give you the assistance you need to plot the right path forward.

Those are just a few of the common hesitations that business owners have when it comes to hiring performance improvement consultants. Hopefully, you can see that in each case, delaying the act of bringing in professional help does more harm than good and makes it that much more difficult to get things back on track.

But if you’re proactive and work with the right consultant, it can be a catalyst for robust growth and development in your business.  And before you know it, you’ll be at the next level.