My view of consulting

Have you ever worked on solving issues related to suboptimal business processes within your organization with an external consultant?

Most of the time they’ll tell you standardization and optimization problems (especially those based on risk assessment) are complicated and often hard to remedy. Well, in my view, that’s not usually so.

In order for an organization to see through this (rather sneaky) tactics of various big-name consulting firms (which basically works!) it needs to understand why they make various issues seem more complicated then they really are. Well, some of them want their (potential) clients to spend substantial amounts of money for very little actual work done. Also, I guess they want to reduce (as much as they can) their responsibility for the possibly harmful results their deliverables could produce in their client’s day-to-day business.

Throughout the years I advised, managed projects and trained financial practitioners across the SEE region, working on projects ranging from modelling and controlling of single risk categories, optimizing various components of the entire credit process, producing business and risk strategies, implementation of enterprise-wide risk management processes, harmonizing existing operations with new regulations (and supervisory expectations,), to the assessment of competences and training needs of the institution’s key resources and conducting related tailor-made in-house training programs for various levels of attendees.

In most of these engagements, I didn’t have the choice to fail so I had to get an understanding of the causes of the pressing issue. As a consequence, I learned where to look, to think outside the (consultant’s) box, in order to find a simplest and the most robust way to fix a problem that initially seemed too complicated for the organization that hired me.

So, last year I decided to finally make a full-blown career out of my ability to make various issues and problems simple to understand. There was one idea that kept me on my new path and that is; by knowing where to look (i.e. finding the underlying cause of the problem that just wouldn’t go away) I can save somebody from months, and possibly even years, of annoyance.

I knew that the problem with hired consultants can get even worse because most of them lack necessary practical experience and know-how from the “trenches” of the industry they are engaged with, so they don’t know how to address the core problem most of the time. That’s why they often try to blur that fact by shifting their explanation to the external context (stagnant economy, market conditions, stricter regulatory requirements, poor demand, etc.) and anything else that keeps the particular organization searching (and spending) for more of their services. That’s why most of them produce only “cosmetic changes”, without dealing with the real sources of the problem.

Also, I saw lots of money being wasted from time to time on consultant firms for projects intended to deal with internally perceived problems for solution of which senior management only needed to organize and lead periodic and structured conversations between different organizational units (silos), so they could come to a mutual agreement. Most of the times, the underlying problem (which were relatively easier to solve internally) only became more complicated with hired “external help” (providing the organization with unclear advice or transfer of a too broad knowledge), rendering the overall consultant’s engagement value added pretty unclear.

I realized that solving corporate governance, process optimization or risk management problems is no more complicated than high-school level math for someone who knows how to clearly ask the right questions and who understands how to clearly communicate identified issues, in comparison to someone who got used being vague and general.

I believe that the main purpose of operations and business consulting is objective insight (particularly that about identified weaknesses and redundancies), not just numbers and pages of generalized advice, and that almost all concepts describing operations of (financial) organizations, particularly those related to risk management and corporate governance, are essentially simple, and, as such, may be expressed in language comprehensible to everyone.

So whatever it takes, it is necessary for a consultant to do the work to truly understand his client’s business model and operations, and then create tailor-made, high-performance framework that help the client transform its business by making it more optimal; thus more sustainable and more secure.

Consultant’s aim should be to make seemingly confusing and complicated subjects understandable and clear, by providing his clients with

• Determined potential solution set (including those pragmatic ones that are “good enough”) early-on in the projects
• Clear and understandable recommendations and quick-to-deploy practical solutions to problems (initially identified and subsequently harmonized and prioritized with the organization’s senior management) that he coordinates until they are fully implemented in the organization’s corporate governance and business processes, rather than leave his clients to implement them on their own or mediate them with additional advisers
• Transfer of the business-relevant knowledge (through internal educations programs and workshops tailored according to identified solutions to the underlying problems and client’s particular business priorities).

Also, I know that reengineering and optimization of an existing business process are twice as hard as designing and implementing a particular business process from the scratch. Therefore, if you’ve designed certain business process within your organization cleverly and thoroughly as possible, you are, by definition, not objectively detached enough from it to detect and remove weaknesses it contains and replace them with optimal solutions. That’s why there's rarely an (financial) organization I’ve worked for that doesn't start out by telling me it is complicated; mostly by mentioning the specificities of the market in which they operate, the particularities of their organization and structure of ownership (often using internal jargon), and resulting specificities of their business model and strategy (even though in some cases they do not have a fairly-defined one).

That’s why I believe that a consultant is often compelled and obliged to demystify this view of the business during the initial stages of his engagement within a particular organization; mostly by initially adjusting to his client’s way of thinking about the business and answering the raised questions in the way the management and key employees understand their business. Experience thought me effective communication (i.e. the one that understands the audience, engages its interests and meets its needs) has the ability to broaden people’s views, deepen their understanding and encourage more engagement at the operational and the enterprise-wide level. Usual buzzwords-and-acronyms based preaching you sometimes get from external trainers and advisors just cannot do it.

That’ why it is necessary to dig a little deeper and learn about the organization it self and its business, until some simpler answers – the ones that meet the people where they are (mentally and organizationally) in order to engage them – can be stipulated. Nevertheless, the advice given and solutions proposed must be still technically robust and completely focused on the underlying problem. Also, if the advisor wants to be perceived as different in comparison to say “big name” consulting firms, he/she must be prepared to always assume full responsibility for the consequences of the advices and solutions he provided.

I’m not saying simple is easy. It's not; it's hard work. But as Albert Einstein said: "If you can't explain it simply, you don't understand it well enough." So, in the world of operations and business consultancy it could be said that simplicity is the ultimate sophistication.