Anatomy of a million dollar gamble
There's an old saying in business: A consultant is someone you pay to tell you what you already know.There is more than a bit of truth to this. A more generous way of saying this (from the consultant'...
There’s an old saying in business: A consultant is someone you pay to tell you what you already know.
There is more than a bit of truth to this. A more generous way of saying this (from the consultant’s point of view) is: “A consultant is someone you pay to prove what you think you know.” Of course you can also hire a consultant to find out what you don’t know. But what about hiring a consultant to turn your business upside down and completely change your operation?
This is essentially what was supposed to happen at a company I worked for a long time ago. The company, an injection molding operation supplying the automotive market, was, to be sure, a special case — a basket case. In desperation, the parent company hired a bright, young energetic plant manager to turn things around. It wasn’t long before the PM, let’s call him Frank, got the lay of the land. He fired a bunch of managers, and brought in fresh blood. He posted the company mission statement and values in the five or so languages spoken by the employees. He rallied the troops, speaking eloquently at weekly meetings where workers were allowed to air their questions and concerns. He created problem solving teams and gave them training and resources to do their jobs. He stressed safety as his top priority. His door was always open.
Morale and operations improved. Injury and scrap rates began to come down. Still, the company couldn’t turn the corner on profitability. A plateau was reached. Frank did not have the luxury of time. He listened to a proposal from a consulting firm: You pay us $1 million and we’ll bring you $2 million in savings a year. He talked it over with managers. He bought it.
A small army of consultants descended on the plant. They stood writing on clipboards near injection molding machines. They hovered listening in the production and engineering offices. They took over a board room and sat hypnotically with fingers poised on their laptops at all hours of the night and day. No one, except a few top managers, knew exactly what it was they were charting, graphing, analyzing.
There was, however, one immediate and obvious change. When a machine was down, people were sent home. No questions asked. This became S.O.P.
Other than that, it was difficult to tell exactly what they were up to. To my knowledge, they never tackled any hard technical problems that dogged operations — lengthy mold change-over, poor set-up and operation of machines, awkward work-flow and plant logistics, poor work performance of certain employees. Behind the scenes perhaps there were adjustments to the way things were purchased, alterations in contracts, slashes made to expenses.
In the end, Frank declared the endeavor a success. We apparently had our $2 million in savings; the consultants got their million-dollar paycheck. How did they do it? Who knew. We were better though, Frank and the consultants said so. All we knew is that we still had high scrap rates, out-of-whack machines, lengthy mold changes and a cramped, cluttered shop floor.
Moral of the story: Sometimes a consultant is someone you pay to tell you what you want to hear.
Michael LeGault, editor,