Do MSMEs Need Management Consultants?

If you ask any Micro, Small and Medium Enterprise (MSME) owner whether he/she feels the need to approach a consultant, chances are that you will get an ambivalent answer. While they may not tell you outright that consultants are parasites and do not serve a useful purpose, you can gather as much from the body language.

I had a taste of this recently. In a recent small business survey that we at Synconic Solutions and Services Pvt Ltd. conducted, one of the questions related to their opinion on enlisting the help of management consultants to aid them in their recovery and growth. 43% gave a positive response, but when we contacted them, they were apprehensive about how consultants could help them. They were gracious enough to ask for a proposal, but the stony silence since then tells its own tale. They don’t want consultants. Period.

This set me thinking. Why this negativity about taking consulting among small business owners? Why do small businesses stay clear of taking consulting advice? Do consultants have a role at all in assisting MSMEs? Or are they relevant only for big businesses?

Let me list some thoughts that might be playing in their minds when confronted with this question:

1.      Ego: It was my idea, I went through all the pain of setting it up and taking it to this stage without any help. If I can bring it this far, I know how to take it further. Don’t need your help.

2.      Control: This is my baby. I created it, I nurtured it. I am not prepared to share control with some external person.

3.      Information sharing: Can’t share my trade secrets with others. Suppose they are in collusion with my competitors.

4.      Education as a disqualification: So what if he has an MBA? Those fancy qualifications are good for theory. Practical life is very different. You need street smarts to run a business.

5.      Nobody knows my business better than me: I know my problems and how to fix them. I have not got there yet, that’s all.

6.      Suggestion-box perception: Consultants give only suggestions using management jargon without understanding the nitty-gritty of my organisation’s culture.

7.      Costly resources: They are very costly resources and I cannot afford them.

8.      Superiority complex: They have a superior attitude and can’t gel with my workforce

9.      Unsustainable benefits: They are concerned about delivering benefits till the time they are with us rather than ensuring sustainable benefits over a long time.

10.  Availability: They usually service multiple clients at one time, which mean their availability is limited. There might be times when I need them on urgent basis and they might not be able to comply with my requirements.

From their perspective, these points are valid. To be fair, consultants are also responsible for a lot of the flak they get.

The problem is, this inward looking behavior hampers MSMEs from realizing their true potential. External consultants can bring in expertise and neutral perspective, offer constructive criticism and help chart a clear roadmap for growth.

The negativity between consultants and small business owners can be eliminated if we can take care of the following:

MSME owners:

1.      Appreciate the potential contribution of consultants in fast tracking your growth. Through their experience working with other clients, they have a repository of patterns and case studies to bring to address your problems.

2.      Consultants bring a fresh, unbiased perspective enabling you to look at your problems in a different light. Sometimes, these insights are invaluable.

3.      Get over the fears mentioned above (loss of control, information sharing, etc.). These can easily be addressed through a well-written contract and NDA clauses.

4.      Have an open mind about changes that consultants may suggest. Evaluate them, but implement sincerely. And give them a fair chance to succeed.

5.      As professionals, consultants will charge a fee. Treat it as an investment for the future, not as a sunk cost. And insist on a fair ROI.

MSME consultants:

1.      Appreciate the hard work that entrepreneurs have put in to reach this stage. Empathy is a much needed trait here.

2.      Business owners understand their business better than anybody. Don’t teach them their business, but use your expertise to draw out patterns and connect the dots.

3.      Adopt the mindset of a coach or counsellor rather than a formal consultant. Patience is required to convince the entrepreneur and slowly bring him to your side.

4.      Be prepared to junk many of the standard consulting approaches including pricing models. They have been tailored keeping big business in mind. Design some of your own that work.

5.      Emphasize the benefits – if possible quantify in rupee terms – of your recommendations. In this scenario, your fees will be viewed as an investment, not a cost.

In short, Appreciate, Empathize, Ideate, Inspire to Implement.

Recipe for a win-win situation, don’t you think?