Business Advisors Actually Do What They Propose
A look at the difference between business advisors and management consultants
By Tim Young & Michael Kenneth
Way back in the 2000s, global shipping giant UPS ran what some businesspeople consider to be the best TV ad of all-time.
The spot opens in the office of a business owner listening to recommendations from two rather confident and fast-talking management consultants. Here’s how it goes:
To borrow from another major TV advertiser, the ad is priceless. It promotes UPS’ global logistics service. But it also does something else, something very subtle. It points to the important distinction between management consultants and business advisors.
Same cat, different stripes? Nope. In short, business advisors actually do what they propose.
Like in the TV ad, a management consultant improves or streamlines aspects of your business, such as logistics or IT processes, typically based on prevailing best practices. But a business advisor improves your business holistically, whether you’re struggling to keep up with runaway growth or preparing for your exit in 5 – 10 years.
The business advisor seeks to understand your unique business—not just industry practices and trends—and recommends and implements changes that will help the business mature and achieve maximum value as an operating asset.
The Wide World of Management Consulting
According to Forbes, which publishes an annual list of America’s best management consultants, there are nearly one million such firms in the U.S., up more than 2% since last year alone. They generate about $330 billion in annual revenue. That’s pretty big money.
Some of them are quite well-known: Accenture, Bain, McKinsey. Others—such as Deloitte—were founded as accounting businesses and grew to provide services outside of accounting. Yet others, such as Cambridge Consultants (not to be confused with Cambridge Associates), focus on specific areas like product development and technology.
They hire smart people, with Ivy League MBAs being their stereotype. Young teams of consultants travel each week and set up shop in their clients’ offices for months at a time. They often use their consulting experience to leverage their careers into corporate management.
As for their clients, management consultants work with a broad array of companies, which are often culled out by their ability to pay what many consider to be hefty fees. They also work extensively for federal and state governments, consulting on inefficient processes and important initiatives.
Large management consultancies—first CGI Federal then Accenture—oversaw the launch of healthcare.gov, the federal government’s healthcare insurance portal established by the Affordable Care Act. That launch didn’t go well—an enormous faceplant, in fact—demonstrating that despite their talent, breadth and confidence, management consultants are not infallible.
Business Advisors … Been There, Done That
Business advisors, on the other hand, are a different breed. We tend to not focus on disciplines—finance, sales/marketing, operations, etc.—but on the entire business. We understand the disciplines because we’ve worn those hats. But we focus on how they mesh to make up the whole.
Business advisors are former entrepreneur owners—like those of us at WealthPoint—who have started, built and monetized businesses. We know how to grow, but we also know how to beat the curse of growing too fast. It might sound like a good problem to have, but it’s been the death knell for far too many—up to that point—successful businesses.
Business advisors are smart people, too. We don’t necessarily have Ivy League MBAs—many certainly do—but we have other, maybe more practical, credentials: experience and savvy.
These aren’t credentials you put on a business card. But when a business owner’s cash crunch threatens employee payroll, the insights and hands-on support of a business advisor who has lived through the same scenario are, to repeat, priceless.
We also understand risk, an increasingly popular business school topic. Clearly, having a case study understanding of risk is beneficial. But risk takes on different meaning and dimension when it’s your assets and employees—and families—that are at stake. Business advisors understand risk because we’ve taken our own risks. Sometimes we failed. But more often than not, we succeeded. And we learned—a lot. That’s why we’re here.
Last, and maybe the most important way we’re different from management consultants, is that we’re doers. We’ve worn all the hats, paid the bills and taken angry customer calls. We’ve been there and done that, which makes us the ideal people to help other business owners think through their issues and challenges, as well as their opportunities, and implement change.
There are many great thoughts and quotes about learning from the experiences and mistakes of others. Oddly enough, even in our high-tech world, one of the great ones comes from Otto von Bismarck (1815-1898), the first Chancellor of Germany:
“Fools say that they learn by experience. I prefer to profit by others experience.”
Keep it in mind as you continue to grow your business.
Before you go, take 30 seconds to watch the UPS ad on YouTube (they had a great marketing consultant).