“Strategic direction is more important today. It's about providing a framework for managers to navigate through the fog of complex chokes. No company can avoid this."

– C.K. Prahalad –

PoS July 2015 | When Do You Need A Strategy Consultant?

There is rarely a CEO or entrepreneur who has never felt the need for advice. The majority, however, do not engage consultants. They try and figure things out by themselves, sometimes not so well.

In my consulting experience of nearly fifteen years I have found CEOs seek out experts in four distinct situations.

1. Need expertise?
The firm needs expertise they don’t possess. The company wants to implement a new quality, or performance management system. An upcoming plant requires new layout, a new digital media strategy needs crafting, introduce Kan-ban to deliver goods to customers on JIT basis, are the typical situations when firms engage experts.

2. Sounding board
Not infrequently, CEOs need a sounding board: someone who will spar with them on a difficult decision. Savvy leaders know that a narrow perspective from being close to the action inhibits expansive thinking.

They recognise they may be susceptible to bias and are unaware of it. An impartial observer, especially one with wide experience, can be invaluable in facilitating an objective and rigorous evaluation of choices.

3. When in trouble
It is harder when the the firm is in trouble. The business may have lost its edge owing to internal constraints or external circumstances. Revenue and profits are headed south. None of intiatives have helped in stemming the slide. That is when some leaders wonder if they need outside help.

They also face a big dilemma. Is it wise to spend on a consultant – good ones don’t come cheap – in times of aggressive cost cutting, layoffs and austerity? Many firms do not engage an advisor even when the situation is dire. Leaders that seek help are men and women with strength of character.

The case of Mindtree In 2011, circumstances in Mindtree were very similar. One of its businesses was stagnating; the other growing slowly. Margins lagged industry average. Stock price had been southward bound since early 2010.The CEO brought on board a senior strategy consultant with wide experience. Working closely with him they were able to make a turnaround in just about a year. Revenue rose faster, margins improved, and stock price began a steady climb.

4. When the going is good! 
It is a rare organisation that acts upon the fourth and final cause. They are doing well and want to do even better. Leaders of these companies recognise that old ways of doing things, even though they are yielding results, will not work in future. They know they need an expert who will not only offer advice, he will challenge established practices, and instigate sustained effort to reinvent the firm. They are visionary leaders.

The case of Carborundum Universal In 2004, Carborundum Universal, part of the $4 billion Murugappa Group, had completed 50 years of existence. It had a modest but steady record of growth, and satisfactory profitability.In 2002, the firm had begun the push for faster growth and had improved its performance significantly. They were the market leader in some segments but wished to do more. In 2005, they engaged a well-known consultant to find ways to achieve breakaway growth.


The consultant challenged them to reject the idea of being a leading company in India and consider the world as their playing field. In the years that followed, Carborundum acquired a much bigger Russian company, and expanded its footprint around the world, from China to Canada, and Australia to South Africa.

The now INR 22 billion company has innovated new technologies and products, become a leader in several categories, and created huge wealth for investors.

In the next issue, I shall dwell on how best you can leverage your consultant’s expertise.