Why Do Companies Need Management Consulting?

Many companies are asking themselves if they have a need for management consulting. Here are a few things to consider to answer that question. Do you have a challenging organizational problem that doesn’t seem to have a solution? Is there a project needing the right expertise? Do you detect union activity, and your leaders are not labor-wise? Does your organization know its union vulnerabilities? Is developing a strategy to increase employee engagement proving difficult despite all efforts, or is it just not happening? 

If you answered yes to any of these questions or questions like it, your organization is a prime candidate for management consulting. Management consultants are problem solvers, advice-givers, and expertise sharers, filling in skills and knowledge gaps in relevant areas as needed and helping organizations with strategy development, communication structure assessment, leadership training, and operational improvements. The benefits of hiring a management consultant can be summed up in two words: Proactive Improvement.

Reasons Companies Need Management Consulting 

Organizations are turning to management consulting in greater numbers. In 2021, over $253.1 billion was spent on management consulting, and the market grew 8.6 percent. The reasons why companies hire management consultants vary because management consulting is designed to address a wide range of leadership challenges in an organization. A broad definition of management consulting is problem-solving for more complex organizational challenges, and that covers a lot of territory. 

Organizational consulting focuses on helping leadership improve their performance, so the organization’s performance is also elevated. They apply analytical, psychological, and leadership skills, which is the overarching reason companies hire consultants – they bring a well-rounded broad perspective and expertise gained through hands-on experience in various business settings. 

Following is a breakdown of some of the numerous reasons a company decides it needs management consulting. 

• Requires professional expertise in a particular area, like preparing for a union organizing campaign, leadership training on employee engagement, identifying leadership skills gaps, developing a strategy for improving the employee communication structure, etc. 
• Needs access to more expert knowledge of strategy development and implementation 
• Wants to identify the real context and basis of a management problem that seems stubbornly unsolvable because sometimes managers pose the wrong problem  
• Top leaders need help understanding their people decisions and why they impacted the organization the way they did 
• Needs a labor relations strategy for unionized or union-free employees 
• Wants to strengthen leadership and/or employee training  
• Wants to identify communication gaps and the structure and tools that better include all employees, like digital communications 
• Wants to create an inclusion strategy that addresses challenges like developing a respectful workplace and uncovering biases in the workplace, etc. 
• Needs to build a more positive organizational culture 
• Needs a better strategy to stay union-free, including conducting union vulnerability assessments 
• Requires assistance with employee engagement initiatives 
• Needs an employee-focused strategy for managing organizational change 
• Wants to collaborate with experts on workforce development 
• Needs to develop leaders as coaches  

What Do Management Consulting Firms Do? 

What do management consulting firms do? We have previously discussed the fact that management consultants do what your organization needs to be done where it involves leadership and employees. The reality is that everything an organization does depends on the behaviors of your people, from the CEO to the frontline employees. Generally speaking, management consultants accept a client’s defined issue, collect information across functions and levels to develop pooled organizational knowledge, define a specific problem and develop a targeted solution. Of course, the research and solution are developed in collaboration with the client.  

The reasons why companies hire consultants include accessing experts who can bring their knowledge and resources to the project or problem. This is what management consulting firms can do. They can quickly analyze the situation, conduct interviews with your leaders, offer standardized or customized employee-facing tools and resources, consult with other experts as needed and do a variety of tasks that lead to a well-defined, practical solution.  

Benefits of Hiring a Consultant 

One of the most important benefits of hiring a management consultant is this: It’s a proactive approach to improving your organizational culture and employee-leadership relations. Those improvements, in turn, lead to higher employee engagement, lower employee turnover, higher productivity, and a host of other benefits.  

Generically speaking, you get the following benefits from organizational consulting. 

• A consultant brings an impartial or neutral perspective which removes emotions creating barriers to good decision-making or progress in a particular area. 
• Management experiences a different perspective. 
• Your leaders gain access to the consulting firm’s industry and functional breadth of knowledge and experience from working with different companies. 
• Applying the knowledge of management consultants positions the company’s leaders to better address future strategic needs 
• Increases your knowledge of the leadership skills needed to achieve specific business goals and maps out practical solutions 
• Busy decision-makers caught up in daily work get help addressing issues left unresolved due to lack of time. 
• It makes it easier for employees to accept unpopular or tough decisions because they know the decision is based on impartial expert advice. 
• Identifies the leadership skills and knowledge gaps to close to develop positive employee relations 
• Can call upon numerous resources your organization doesn’t have access to, including industry professionals, market research, Human Resources Analytics, eLearning courses, etc. 
• May avoid unionization by implementing the management consultant’s solutions. 

It can be difficult for your leaders to step back and identify problems impeding organizational success. Managers and supervisors get too close to their problems or their employees and are unable to look at a challenge, project, analytics, etc., with an objective eye. One of the top benefits of hiring a management consultant is your leaders gain a clearer view of the organization’s people, systems, and/or processes. 

For example, you have difficulty understanding why your diverse employees continue to feel a lack of belongingness or why your employees are showing signs of interest in starting a union organizing campaign. From your perspective, you offer excellent employee benefits, unbiased Human Resources policies, and authentic leadership. Your employees see things differently – lack of access to management, poor working conditions, and lack of empowered employee voice.  

Does Consulting Add Value? 

All the reasons that companies might hire management consultants add up to one thing – to create value. One of the top value-adding aspects is the fact the consultant can teach skills the management team didn’t know were missing from the leadership equation. The consultant can energize your leaders as they learn new perspectives, approaches, and strategies that deliver measurable results. The value of management consulting, of course, filters down to employees. 

The management consultant operating mode is one of investigation and problem solving, but the ROI includes elevated leadership skills better suited for the Proactive Era, which has changed the strategies for developing positive employee relations to stay union-free. It all adds up to higher productivity which flows to the bottom line.  

Getting Proactive through Management Consulting 

Most business leaders today face an overwhelming set of challenges - addressing the impact of the COVID-19 pandemic, facing potential unionization, meeting employee engagement needs, adapting to digital communication systems, ensuring supervisors get regular skills development opportunities, and so much more. Companies hire management consultants because the consultant helps the organization quickly identify and address challenges like communication gaps and union vulnerabilities. Instead of waiting for problems to develop, many businesses choose to take the proactive path of management consulting for organizational improvement.

IRI, along with the Projections team, is ready to help your organization. We offer Management Consulting Services that support everything from workforce development and employee communications to manager coaching and preventing unionization. Taking the proactive path to organizational improvement now will set your business up to take on the challenges waiting in the future.