Proactive Versus Reactive Advice

One of the secrets of internal consulting is to be proactive. Most HR people, for example, content themselves to sit back and wait for line management requests, which they fulfill with pride. But this is a commodity mind set, and no more valuable than the pharmacist who fills the doctors’ prescriptions.

It’s far more helpful and valuable to be proactive, which means being diagnostic and not merely prescriptive. People often ask for the generic drug instead of the brand name to save money on the commodity, but they never say “Get me the cheapest internist” (or brain surgeon). The diagnostician is of great value, and we tend to follow the recommendations, no matter how painful.

The true calling of the internal consultant is not to respond but to anticipate. External consulting firms don’t wait around to be called; they try to create need. Internal consulting operations are no different in that regard, yet have a potentially much more powerful asset—they know the organization intimately and should, therefore, be able to project need much more accurately.

No matter what request may come streaming in or what objective is imposed upon the consulting function, every internal consultant should be examining the following strategic considerations on a frequent basis:

 

How to make the best operations better. 

A common mistake is to focus on poorer operations. In fact, about 80 percent or more of all corporate developmental investment goes toward improving poor performers, rather than further exploiting strong performers. Consequently, the focus on internal consultants should be on raising the bar even higher for strong performers. If you’ll forgive a baseball analogy, the benefits of improving a .310 hitter to .335 is far more beneficial than increasing a .210 hitter to .235. Don’t fall into the trap of trying to analyze and improve poor operations. Instead, focus on the unusual: Make strong operations even stronger. The corporate contribution will be huge.

 

Break paradigms. 

Early in my career I was asked to chair a task force to determine which rental car company was best for our company’s needs. In the midst of an arduous debate on frequency of use, the benefits of taking insurance coverage, and numbers of outlets, I suggested that we look at the alternative of requiring people to use taxis. After a nearly-acrimonious debate, a test was approved and, what do you know, the people using taxis exclusively had lower travel costs than people renting cars. Find better ways to do things, which may involve challenging existing beliefs and questioning present values.

 

Look outside the company at the environment.

Organizations tend to be extremely introspective and self-centered. They fail to consider the competition, consumer trends, economic developments, technological improvements, and so on. Find those outside influences that may have the greatest effect on the success or failure of current strategy and offer suggestions on how to avoid, escape, tolerate, or exploit such external factors. In the United States, especially, consumer trends tend to accelerate or undermine even the best corporate strategies.

 

Take risks. 

Staff functions are decidedly conservative. The legal people eschew anything that smacks of change, and the financial people want to eliminate risk altogether. This is not the formula of successful organizations (or careers). Seek dramatic ways to leverage sales, market share, time-to-market, and related high-impact areas. Become adept at risk/reward analyses.

 

The key is to be able to demonstrate to management legitimate and attractive rewards while undergoing prudent and manageable risk.

Here is one method to ensure that your view is always fresh and unburdened by the conventional. Ask yourself these questions:

1. Why are we intent on doing this?
2. What is the ultimate result to be achieved?
3. What alternatives exist that can meet this goal?
4. What alternatives can we create that can meet this goal?
5. What risks are attendant to these alternatives?
6. How may we mitigate or control those risks?
7. What is the reward/risk comparison?
8. How much risk are we willing to tolerate in return for how much benefit?

Note that “What are we doing now?” and “How can we expand what we’re doing now?” don’t enter this discussion. Paint a picture of the future and then determine how to get there. Don’t simply extrapolate on the present, which produces much more restrictive results.