Five Reasons Why Management Consultancy (MC) Fails?

T. V. Rao
Chairman, TVRLS

Today, Management systems and processes are in demand just like the Management Graduates. Many organizations rightly believe that they can do better than before by using management systems and processes. Systems enhance predictability, ensure reliability, reduce transaction costs and bring in cost effectiveness. Those who use professional management in managing their affairs- be it customers, materials, finance, people, quality, products, profits or anything- are likely to derive better benefits in terms of costs, speed, brand image, etc. and progress well. That is the reason why corporations are going at any length to employ MBAs from reputed institutions at a high cost and also getting their executives trained in management processes and systems. They also use management consultants to introduce or improve systems. However while training brings in a lot of change in outlook and also enhances skill base when organizations spend millions of rupees on management consultancy they often complain privately that it has been a waste or that the consultant walked away with the watch by telling them the time and they have to depend on the consultant every time they needed to interpret his data or recommendation and implement them.  There are five reasons why management consultancy seems to fail wherever they have failed. These are working simultaneously or one of them is enough to make the management consultancy fail.

These are:

  1. Ignorance and Inappropriate sourcing policies
  2. Lack of commitment of the top management
  3. Poor implementation and follow up
  4. Lack of knowledge and experience in using consultants and consultancies
  5. Frequent change of those who are responsible

There may be many more but these are the most common causes for not getting the best returns on Management Consultancies and consultants.

 Now a days management consultants and consultancy assistance is sought in the following areas:

  1. SAP, ERP and related solutions primarily dealing with MIS and IT
  2. Strategy and business planning, Mergers and Acquisitions
  3. Organizational structuring or restructuring
  4. Human resources Systems including PMS, ADCs, 360 Degree Feedback, recruitment, competency mapping, employee engagement surveys including the Q12, training systems improvements etc.
  5. TQM, 5S, TPM and the related solutions to rationalise production costs and enhance quality
  6. Market surveys and marketing strategies
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