Audeo Fortis | Business Advisors and Management Team Support with a Difference
Where difference is a good thing

Articles + Insight

News, useful information and best practice

Toys ‘R’ Us and how NOT to manage your management consultant


Today established retail giant Toys ‘R’ Us filed for bankruptcy protection in the US.

So you can understand why every time I speak to a business owner that says, “we don’t need help” it breaks my heart just a little bit more (and it’s not because they’re not hiring me!)

I sincerely believe that businesses large and small are missing out on opportunity, and at worst potentially damaging their organisations by failing to identify risk. Personally, I think there are two issues (a) we don’t like to admit weakness/ask for help and (b) because of our relationship with management consultants and other professional advisers.

And I get it, management consultants are *the worst* - they’re just pushy, aren’t they?

Particularly if you're a smaller business management consultants can make you feel like the business equivalent of a hit-and-run victim. They come out of nowhere, hit you fast, tell you how to run your business, deposit an unintelligible report, and dump one heck of an invoice. You’re left injured, feeling dazed and confused.

Added to that, being so close to your business, you might not recognise there are also inherent dangers to factor in…

As a business owner you know everything there is to know about your business. But you’re also highly likely to be caught in the classic management trap – you’re too busy running the business to have time to keep up…to learn, improve, grow, change, adapt. Particularly if your business has been established for several years, or if your strategy hasn’t been closely monitored or frequently challenged.

Before you know it, you’re picking up the phone to a professional adviser because you’ve identified a problem. Not only are you potentially too late, but you’re likely missing several other problems that you haven’t even identified yet, because you’re limited by your own knowledge and internal experience.

So how do you get around this paradox? Apply my top 3 tips for how NOT to manage your management consultant, and start building healthy relationships with your advisers to get the best out of your business:


1. Don’t hire a management consultant, hire a business partner (before you find problems)

Business partners are integral to your team. Your agenda is their agenda and you’ll get a far better result if you’re goals are aligned together.

This covers absolutely everything. Their fee structure, what the deliverables and goals are in the contract, how they’re incentivised to get the best result through fees or outcomes expected, and how much risk they share with you. Great business partners learn and grow with their clients by sharing success and failure.

If you are hiring management consultants remember they are also not a supplier! Using such a professional adviser isn’t in isolation of your business (they don’t deliver a polished product that you just consume). When you engage a management consultant you should have a clear idea of what your responsibilities are in achieving the outcomes you need. A management consultant is not a silver bullet, they augment and add to your existing business – they’re a catalyst.

You also shouldn’t be afraid to engage a business partner long before you’ve identified a need. The vast majority of business owners I’ve helped will say that they wish they’d known to get me in sooner as they can see that the problem could have been resolved before it became an issue, usually for a lot less cost. In Toys ‘R’ Us case who knows where they’d be if they had the right business partners in place years ago?

Equally, a good business partner will tell you if there’s no work worth paying for. They’ll educate and help you understand the flags to be aware of that would trigger further conversation, help identify what the hidden risks and opportunities are, and explain where the value adding work is.

A bad management consultant will try and sell services when there’s no real value to be gained.

Questions to test whether your professional adviser is true business partner:

  • Do I trust them and what value are they adding?

  • How much risk is my adviser taking compared to me?

  • Are their fees aligned to the deliverables, and incentivised to deliver the best result?

  • What is my/our role in getting the best outcome? Are we over reliant on our advisers?


2. Don’t trust anyone who says they can fix all your problems (unless they genuinely can)

A good business adviser will tell you what their limits are, and will link you with other experts that you need. Good business advisers aren’t afraid to say what they’re not good at, and will back themselves up with credentials or let you speak to their clients.

However, if your management consultant promises you the world, stop and take a breath. You’ll have a gut reaction to this news (usually one of ‘wow this is amazing’, or ‘this is far too good to be true’) and my second tip is to let that reaction go and step back from it.

Now with a rational head on…sense check it! Could they genuinely be right?

Questions to assess whether you can trust your adviser:

  • Do they have the skills capability to do what they say they can?

  • What is the previous experience or evidence to support this?

  • Are you being too sensitive as to whether you can do this yourselves, either by under selling or over selling your own resources and capabilities?

  • What business analysis of your own do you have and how does it stack up?

It’s natural to jump in two feet first with someone who promises they can do everything, but if you’re not sharing in the responsibility go back to tip 1 and start again.  


3. Manage yourself first (and then manage your management consultant)

Natural friction between business owner and management consultant is tricky. No one likes to admit it, but it’s emotional having someone ‘critique’ your business and asking for help. Every reported finding can feel personal to a business owner, and can manifest itself in subconscious destructive behaviour as you go through your working relationship.

Although hopefully if you’ve applied tips 1 and 2 well, you’ll have selected a good business partner that doesn’t make you feel like this.

That said working with professional advisers feels like a catch-22, how can you assess whether the outcome is good if you’re relying on their expertise? The answer is that they should be explaining their advice and giving you options so you understand the decisions you’re making.

There’s no shame in tapping up experts for advice and professional advisers don’t operate in a vacuum. They rely on your knowledge to shape recommendations, so business owners shouldn’t feel afraid that they might be walked over by someone more knowledgeable than they are. The relationship should be symbiotic.

You’d trust a doctor or a solicitor to exercise their professional judgement, and in both cases you would still possess unique knowledge that the professional needs to make a diagnosis. Good business advisers should behave in the same manner.

Remember that you are totally in control of the decision to buy the services so, ultimately no matter what they say, you’re always free to disagree and ignore their advice. If you think the advice isn’t good, then go back to the other tips and ask why…have you properly incentivised them to behave the right way?

If you think you’re not getting value from your management consultant then consider whether you’re managing yourself before managing the outputs:

  • Are you withholding information from the consultant without realising it?

  • Are you actively protecting information because you don’t trust them, and why?

  • Have you given the consultant adequate time to interview staff, and access to data?

  • Are you letting your personality/ego/viewpoint get in the way of your professional adviser getting the result you want?

Think of it like going to get your hair cut and styled – you wouldn’t give them a brief so vague that you come out with a trendy mohawk when all you wanted was a trim and style. The instructions and data points you provide ensure the expert can deliver what you need.

A great expert will be asking for feedback along the way: does this sound right to you? Have we missed anything? Are there reasons why our suggested approach won’t work?

Would it have made a difference?

Toys ‘R’ Us might have done better if they’d had the right professional advisers at the right time. And time will tell in due course.

With 3 quarters of successive falling sales they certainly had enough notice, but the risks to the business have undoubtedly gone unchecked long before its demise. Like many before them, Toys 'R' Us have either struggled to harness their own internal capability or they lacked the necessary capability to begin with. The right professional advisers should have been able to help in either case.

The point of hiring a professional adviser is to get an outside perspective to help anticipate risk and opportunity not just fix problems.

And if you work with truly great business partners, those services should pay for themselves.