Why would CEO seek external advice in your view ?

Running a business is tough, no matter what the industry, the composition of the product line-up or the maturity of the firm... and sadly it's a lot less sexy than it seems...

From a bottom-up perspective, being a CEO entails being ultimately responsible for all day-to-day management decisions and for implementing the company's long- and short-term plans.

From a top-down perspective, however, the CEO acts as a direct liaison between the Board and management of the company and communicates to the Board on behalf of management.

In most cases,the CEO knows the business inside out and may have spent months/years building a strong management team. So why in the world would a CEO seek external advice ?

The CEO bears full responsibility for a company’s success or failure but is, in fact, unable to control many factors of what will determine results. He needs to navigate through a long journey of imperfect decisions, be shape and practical, and know how to stretch reality in the interest of the company. He also must know to ask the good questions inside and outside of the organization, know how to decipher and integrate the contradicting signals, know to build and kill initiatives fast, know to hire and fire, and the skill list is actually very long...

 Here are some excerpts of reasons gathered as part of post-project surveys from our CEO clients

Get a new perspective

Knowing the business inside out has its "other side of the coin" effect. When being deep in the day-to-day operations or always being surrounded by the same group of people, the CEO will most likely not see innovative opportunities. They will tend to repeat his suboptimal routine to how to solve a specific problem encountered in the past. Bringing someone in that could have a fresh look at the known issues and offer a new perspective on how to tackle a given problem could definitively be a true boost, and even re-energize an initiative.

Work with someone whom is not involved in day-to-day politics of the organization and has no agenda

From experience, it could take some time to reach the right level of trust while working with a consultant, but for a CEO to be able to tell the Truth (with a capital "T") with no frictions or unnecessary storytelling, no matter how ugly, is not only orgasmic (no less), but also key to truly map all the existing alternatives present in the solution space. Being able to isolate and formulate a specific problem and all its implications to some you trust and you know will not judge you is half the problem solved. Furthermore, in some cases where the CEO needs to deal with sensitive topics, such as succession, major re-org and project reshuffling, or how re-energizing the senior team, it would be almost to involve its directs or even some of its directs for obvious reasons.

Not to have to manage the consultant

Working with a clever and performing consultant on a specific area in the long run could be fun; you focus on one thing only: getting the value you need... you don't have to care about career development, incentive schemes, formal performance reviews, or personal conflicts with peers... and the icing on the cake is you don't have to go through the heavy bureaucratic processes to get him/her on board or to terminate the collaboration.

A pretext to stop the day-to-day, and think strategically

Sometimes the external advisor is only a necessary pretext to get out of the office, clear your mind, and focus all your brainpower on a given task so you can reach a decision. The consultant could be leveraged for the initial data collection and for facilitating the decision-making process. For instance, a general manager we have been working for has insisted on having our weekly sessions in our Tel Aviv offices, despite the fact he had to drive 40 minutes.

Leverage external capabilities for a predetermined period

In some cases, the CEO and his/her management team don't have the expertise to address a specific issue. No worries... no one knows it all... This is also a common practice to reduce execution risk for the first timers or unusual corporate events: the first acquisition... the first time dealing with a new regulation, an IPO, a delisting event, etc....

Handle unpleasant processes faster, such as staff reduction

Most of the time the external advisor is not emotionally involved in the process and can help you look yourself in the mirror and make the agonizing decisions promptly. As well in terms of execution, in the case of a re-org or a staff reduction process, acting fast is a decisive factor in making the process less painful for the firm.

Being told you are on the wrong path

Assuming you are hiring a good consultant that doesn't believe "clients are always right", the consultant will tell you when he thinks you are wrong despite the fact you are paying him. Personally, it happened many times, I told my executive clients what I believed was in their best personal interest despite their originally expressed views. If the consultant is capable of showing you the data that backs up his point, you can save a tremendous amount of money, time and energy. Due to groupthink and their personal agenda, your direct subordinates will tend not to fight too much. This obviously depends on culture... I had the chance to work with many countries... In Israel, for instance, people will tell their truth whether you would like to hear it or not ??.

Get very long-hours during a condensed period which you may not be able to request from your existing managers

The short-term nature of the relationship could have its virtue. Don't push too much on this front ??

In conclusion, as a CEO and in business in general, time is never on your side. Being able to leverage a trusted external advisor could be a true game-changer to generate the outstanding results you are looking for, but faster.

Looking forward hearing your take on this...

About US

DataToCapital is a boutique management consulting firm that supports global tier-1 firms and start-up companies operating in Israel in their route to excellence and market dominance. Our core services, designed for CEOs, Executives (VP-level and above) and Entrepreneurs, can be divided into three areas: Market Intelligence, Corporate and Product Strategy, and Execution Support on top-down strategic initiatives.The quality of the work we deliver in the three areas mentioned above is equivalent to what your company may already get from the top-3 consulting firms that operate in the Israeli market, BUT here’s the twist and why our tier-1 clients think we are superior.

We don’t only provide smart recommendations, we work closely with the management team and can also support driving the execution of their strategic initiatives behind the scenes or as a proxy.

We are at the strategic intersection of Business and Technology. Thanks to our rich background, we know how to connect the dots between the two worlds, and how to be very creative when it comes to disrupting business models or addressing sub-optimized processes with the help of advanced technological solutions (Machine Learning, Big Data, Data Visualization, Enterprise Software Solutions, and many other tools present in our toolbox).

This is a built-in feature. No account manager, no complex communication chain, etc... This is why our firm aims to dominate the management consulting market in Israel with no more than eight talents (...on steroids).

DataToCapital Consulting Is An Active Member Of The Israel Advanced Technology Industries (IATI) Association And Of The Israel's Directors Union