7 Indicators That It's Time You Hire a Management Consulting Company
At Middlerock, it’s a common practice for CEOs to check in with us and follow what we do. Often, they will first follow me on Quora and drop me a note, or ask a question or two. As we get to know these companies, we frequently learn they are in some form of trouble and often wait too long before they share their predicament with us. We thought it would be helpful to come up seven warning signs that it’s time to get help. While we’d love to be your advisors, we’re not always the right fit. That said, we still wanted to produce a list that may be warning signs that it’s time to get help.
1. You Miss All Targets
We talk to a lot of CEOs who have this problem. It usually emanates with the CEO’s behavior, and often they don’t know it. We ask about accountability and the CEO points to everyone else not doing their job while they miss the necessary checks and balances to get their own role on track. Learning to become a great CEO doesn’t happen in a vacuum. There are few who are ever born with the skills. Most have to learn from someone else, and we will either do it directly through a CEO growth plan or we will recommend some other sound advisor for the role. Either way, missed targets begin with the CEO, then we move down into senior leadership talent and assess what is and isn’t working and why.
This is often or real value because we’ve been involved and fixed so many companies who have this same problem. We’re very good at root cause analysis and we try and uncover detailed cause and effect to determine how to best resolve the dysfunction. We act like skilled surgeons and only focus on what doesn’t work while preserving what does work, and even augmenting it a bit. Yet, it’s never a case where it’s just a senior team at fault. It’s always a combination of the CEO and the team.
2. Your Team Isn’t Performing as Expected
We look at how the team measures goals and sometimes they measure the wrong thing. We will often fine objectives that are unrealistic and can’t be traced back to where the company is today. If we were to draw a straight line to the goal and ask about progress even one week after establishing the goal, we often find the company is already off track. We had one CEO who set revenue projections without any means by which the revenues could be achieved. Another is when the company expects behavior to change when there is no model for the new behavior and currently behavior is badly defined. We often discover weakness in hiring criteria as well is a clear definition of the existing company culture. In one case, a company reported a lot of people making mistakes internally, yet there was no mechanism for a root cause analysis or a corrective action plan. This is where an outside advisor can provide a framework for the team.
3. Growth is Stagnant
We see this problem more frequently than some would imagine. It’s a case of where repeated behaviors expect a different outcome. Often growth is limited by the CEO without them sometimes having any idea they are the individual causing the stagnation. It’s a sometimes uncomfortable conversation to have with the CEO when they usually think the fault is with everyone else. The trick is to find someone out there who will tell you the truth and won’t just tell you what you want to hear for a fee.
4. Everything Takes Too Long
This is a very common problem and it’s often because of how a company thinks about managing a project to completion. One company was over a year late on a project and didn’t think that was a serious problem! One company set big financial targets based on historical growth, which seemed reasonable on its face. The problem was, the company never considered what it would need to accomplish that growth and how the market was changing. Many CEOs, in order to show greater profitability, eliminate the very engine for growth, and are then surprised when they don’t get the desired outcome. A good consultant will take a very hard look at cause and effect and suggest the right plan. The wrong consulting firm will enable the same behavior that led to everything taking too long.
We often look at bureaucratic and political practices within the organization and try and eliminate them when possible. Too often good decisions are limited by appearances rather than what’s best for the company. If we think something will work, even when it may be a harder internal sell, we will tell you. We don’t always agree with our clients and we wouldn’t be doing our job if we did. Some companies will kill the messenger who has the best intel!
5. Turnover is High
This is a tricky one. High turnover can occur for many reasons and we make no assumptions going in. It could be a localized problem or it could be a bad culture or a horrible CEO. We don’t know until we’re inside discovering the root cause. Sometimes high turnover is necessary to move the company in a new direction. We’ve had clients who wanted to make a dramatic shift in their direction with some unwilling to participate. They then are forced to part ways with some employees. While it’s never our first choice, it’s sometimes the best choice. High turnover to unseat a bad culture is a good thing, so we make no assumptions on this one. Initially, it’s just a date point.
6. Can’t Seem to Attract Top Talent
Great talent has employment choices and they won’t stick around a crappy company. Can you blame them? They continue to interview and even make job offers, but they keep getting turned down. We had one job candidate who was mad after we made their recommendation because she felt even the CEO had basic skills far beneath her. She was right! We wanted her to help influence him into becoming a better CEO. We had to go without filling the position until we got the CEO squared away, but that took time. Some founder CEOs have growing companies that do it in spite of the CEO. Imagine where they would be if they were a positive force rather than a negative!
7. You are Continually Surprised by Market Changes
This happens a lot. It occurs most often when the CEO is looking at their shoes rather than what’s ahead. We see this as a common problem, especially when the CEO seems surprised by a major market shift. We spend a lot of time working on how to gather great industry insights and where to apply time to better understand where your company needs to move and by when. Often these skills come from years of experience and unless you have it internally on from an active board, you could be setting yourself up for a nasty surprise. It is just one more reason to get outside help.
In conclusion it’s most important that you act before it's too late! This list of seven is arbitrary. We could have made it twenty things but you wouldn’t have time to read it. Companies don't fail overnight and there are warning signs that you may need help and you may not even know it. Talk to outsiders, consultants other experienced professionals, but most of all don’t assume you know it all and ask how you’re doing. Get to know some advisors over time before you make your decisions and most of all make sure they are willing to tell you what you don’t want to hear. Shunning outside guidance will definitely lead you down the wrong path.