Despite the collective best efforts of management consultants, less than about 1% of the world’s SMEs / SMBs today have a well structured approach to pursuing Business Excellence.
Failed Consulting Model
Given that the few successful implementations in SMEs / SMBs have usually involved engagement of external consultants, any objective analysis would have to conclude that the traditional consultant-led business model for implementing full Business Excellence in SMEs / SMBs has failed miserably over the past 50 years.
It is true that we management consultants have earned a healthy living through our efforts. But what have we really achieved collectively for the SME / SMB sector as a whole?
Crux of the Matter
Following a recent public speaking engagement, we were chatting to a representative of a small management consultancy here in Australia. He indicated that his firm had failed to make any money when consulting to SME clients on how to implement Business Excellence – because they found that the hidden costs of bringing their clients ‘up to speed’ with even the most basic management practices were simply too great. This resulted in the firm’s decision to ignore the SME sector and concentrate instead on larger client organizations for their firm’s consulting revenue.
We are aware of several large management consultancies that are finding it difficult to sell their services to SME clients at their normal daily billing rates. The daily fee rates of the large consultancies are relatively high due to the extra overheads that they carry.
And so we have a vicious circle here. On the one hand our SMEs are unaccustomed to engaging consultants for substantial Business Excellence input, and on the other hand, the consultants find it difficult to offer their services at low enough rates to be appealing to SME clients.
Something’s got to give!