30 Retaining the Wrong Professional Advisor
From time to time companies and senior executives inevitably are involved in circumstances that are not familiar to them. In those circumstances, it is a good idea to retain a professional advisor. But it can be disastrous if the wrong advisor is retained.
Often the decision about the advisor who is retained is much more controlling in determining the outcome that is achieved than are the merits of the strategy pursued, the potential of the new business opportunity, what diligence is employed, or how much resources are expended. If you retain the wrong advisor, you may end up with an unfortunate outcome.
Retaining the wrong advisor is a mistake.
31 Retaining an Inexperienced Agent
With the growing complexity of business today, an agent is often retained to represent the company in a major transaction.
In selecting an agent, companies may be challenged because the very issues on which they seek representation are the ones in which they have only limited experience or background. If the agent that the company selects is similarly inexperienced, then the company will not have gained access to the experience and knowledge that it needs. The company may find that the agent is unable to provide the perspective, experience and knowledge necessary to be and effective representative.
Retaining an inexperienced agent can be a mistake.
32 Using Untrained, Inexperienced Consultants
The objective in hiring a consultant is to gain access to specialized expertise, training and experience.
When you select a consultant to assist with a complex project, you want to confirm that the consultant is thoroughly trained in all that is necessary to do that project and also has substantial real time experience in actually doing what you want. The consultant lacking in training and experience increases the risk of disappointment.
Relying upon a consultant lacking in the requisite training and experience can be a
33 Relying on the Generic Consultant
Sometimes a generic consultant—bringing a fresh perspective and no preconceived
notions to the problem—is the best solution. But not always.
One appeal of generic consultants is that they often are less expensive than the highly specialized expert. But the generic consultant, lacking in-depth knowledge of the particular situation, may prove to be a much more expensive solution than the knowledgeable, experienced, specialist consultant. You may end up paying a lot for the generic consultant’s learning curve. And if the generic consultant does not master the lessons well, you may pay much more in the long term than if you hired the specialist at the beginning.
Relying on the generic consultant can be a mistake.
34 Gurus at Cross Purposes
Some companies are intrigued by the idea of retaining and working with many
The objective of working with management gurus is that their ideas will be transferred to the company in positive ways, so that the company and its people will benefit and perform better than they might, had they not been exposed to the gurus and the gurus’ ideas. But too many gurus can be worse than no gurus, as their ideas may be in conflict.
Ideas that may be appealing when viewed independently can be confusing when viewed interdependently. Companies can encounter the difficulty of feeding the people too many guru ideas and thereby causing intellectual indigestion.
Too many guru ideas can be a mistake.
35 Ignoring Advantages of University Contact
Some companies are so anchored in the “real world” that they ignore the advantages of university contact.
While much that occurs in the university may be perceived as peripheral and unrelated to business, university contact can provide some definite advantages. One advantage is an inside track to hiring students. Another advantage is access to faculty for training programs. Or, faculty might make a company problem the subject of a special student project, enabling the company to get access to low cost “consulting in training” project work. University contact can facilitate tracking major trends and developments, especially in the technology realm. University contact can be a source of product development and technological innovation.
Ignoring the advantages of university contact can be a mistake.
36 Thinking you Need to Own the Factory
Many companies think that if they sell products, they need to own the factory.
The old style model of business presumed that companies that made products owned the factories in which the products were made. The thinking was that since the company was all about the product it was crucial to concentrate management talent on making the product, and the best way to do that was to own the factory. Indeed, some of the great manufacturing companies, such as automobile manufacturers, evolved out of innovative ways of making things—most especially Henry Ford’s pioneering assembly line. Today, however, many alternative approaches to making things can be employed. More and more, many companies that sell products don’t own the plants in which the products are made. Instead, they outsource manufacturing.
Thinking that the only way a product company can make its products is to own the factory in which the products are made, can be a mistake.
37 Decentralizing a Function That Logically Can Be Centralized
Activities that have common components and attributes may be more cost-effectively performed and coordinated in a centralized way.
If activities are coordinated and centralized, it is possible to apply systems to achieve economies that would be unachievable were the activities uncoordinated. Systems and coordination can reduce costs and improve service. Improved service can lead to more repeat business and more referrals. Systems and coordination can grow revenues and profits.
Failing to centralize a function that can thereby achieve superior service and lower cost can be a mistake.
Coming up Next, Finance and Accounting.