The Dullest ever Press Release Written (by myself)

“DIY Consulting”, a clever way to gain strength from within when cash is scarce.

In times of no money in the market companies cannot afford to spend huge amounts of cash for management consultancies, but especially now they would need their services the most. Using freelancing ex-consultants who specialised in coaching and mentoring would be an extremely interesting way of still cashing in savings, implementing change initiatives, however avoiding the high weekly invoice.

What is good about consultancies, they come in, analyse the situation, come up with savings and how to cash those benefits in with a potential project, the do the work, create momentum, and they leave again. By then, the company will have hopefully saved what was being agreed, but to an expensive price.

A little calculation for a small project: Day rates of a single consultant are around GBP 2,000, a small to average sized project team would consist of 3 people, and project length would be about 5 months (20 weeks). This equals to GBP 600,000. Applying a Return-on-Investment of 3:1 the savings potential is about GBP 1,800,000 on an annual basis.

Cashing in the savings is nice, but the question most CEOs have to answer when employing consultants is, whether the fee is justified; their invoice is often weekly but their savings are mostly delayed, with that risk on the client’s side. Besides, consultancies may oversell, and consultancy-internal inefficiencies are also built into that daily rate for which no client wants to pay.

Apart from the actual knowledge they bring into the organisation whilst helping them attaining the results, their main advantage is that certain pressure they create and the need for urgency (mainly because they are expensive and people get scared dealing with them).

In hard times like a looming recession the pressure is on anyway; consultancies should find it hard to sell this most important tactical tool.

Time for another calculation exercise: The company is hiring a flexible freelance consultant, who has exactly the same knowledge, on an hourly/daily basis. This saves them from having a full team of consultants in house. The work is done by key management and an internal task force team. The pressure is on, the freelancer is milked for his knowledge, gives training, coaches key personnel, shares his external view, hence acts as sounding board and helps enabling the company to cash in the savings themselves.

Say, GBP 1,000 daily rate, 3 days per week, 5 months project, equals GBP 60,000, probably even less as towards the end 3 days a week is rather much. Does this mean it is the end of management consultancies? Of course not.

Huge change programmes still need to be managed by them. But one thing is for sure, times have changed and the simple approach “Oh, I have a problem, let’s call a consultancy” is no longer applicable. Companies need to rethink how to renew themselves from within with as little cash expenditure as possible. Buying in knowledge from coaches and mentors might be of great help.