Leadership Challenge on A Consulting Engagement
We will discuss a common leadership challenge consultants face on a consulting engagement. There are, of course, many challenges. But one central leadership challenge is how to balance needs for the success of a company/client and the personal happiness of the executive leading the company.
In many situations, the personal happiness of the CEO of a company is always subordinate to the success of the company. Even if the CEO is going through a bad personal situation, consultants tend to define success as whether the company is successful in the short-term. They do not define success through the metric of the executives’ happiness. The CEO may end up personally unhappy and burnt out from being forced to undertake the recommendations we put forward.
And that is a problem for the longer term, shareholder value creation, and succession planning. A company that is performing well but has an unhappy CEO is essentially going to lose that CEO soon.
Setting your consulting firm apart
The problem is that client is not the CEO. If you position your consulting firm so that your client is the primary shareholder, and this makes sense when you are serving a publicly listed company or a SOE (stated-owned-enterprise), the CEO is not your client. The shareholder is your client and you do what is necessary for the shareholder and the CEO gets dragged along to implement those things that are necessary to please the shareholder.
Consulting firms engage with CEOs, but they need to please shareholders.
As such, many consultants put the needs of shareholders first without paying too much attention to the needs of the CEO. The interest of the shareholder and the CEO are not the same. The company can be successful while the CEO may always be burnt out. And this is very common.
Positioning your client as the primary shareholder, and not the CEO, will also help you set your consulting firm apart. It will make you different from other firms like McKinsey and BCG, who would tell you that their primary client is the CEO. On a side note, we believe that serving CEO can be a good model in the private sector. But when you do work in the public sector or for a public company the CEO cannot be your primary client. It has to be the shareholder, which in case of a SOE will be the government and by default the people.
Leadership challenge analyzed: the career success and personal happiness matrix
And, as consultants, we don’t want our clients to burn out. That is something we have learned from many of our consulting engagements. You can implement the right strategy, everyone can be successful but you can end up with a CEO who is unhappy. CEOs who are unhappy leave and nobody benefits from that outcome. Not the shareholders, not the CEO, not his leadership team, not customers and certainly not employees.
That problem may be simplified in a two-by-two matrix.
One axis is made up of personal success, personal unhappiness/happiness and the other is made up of career success and career unhappiness/happiness. When management consultants come in, they focus on career success. They are not interested in personal success. They naturally assume that when the consulting engagement is successful and all the company’s problems are fixed, the CEO’s career would be secure as well.
But what we find with the studies is that executives often have a short shelf-life. They burn out fast. And this leadership challenge is especially noticeable if your client is a primary shareholder(s) and you are serving a state-owned enterprise or a public company.
One of the things that is very common is that while the consulting team is pushing through the project, no one is really helping the CEO and the management team to understand how they can leverage the changes taking place to set personal goals, achieve those goals and manage the uncertainty to balance their own success with the success of the business.
At the end of the day, what would be ideal for us is that we saved the company and developed the strategy that makes perfect sense but we do not alienate the CEO. To that end, we want to have someone who can ensure that there is a balance in the CEO’s life and that he/she is going through the process without burning out.
Who should care?
Sometimes CEOs suffer traumatic personal situations and there is no one looking after them. Consultants cannot do so given the way they have traditionally engaged clients and because we represent (or at least should represent) the shareholders. This comes back to what we call a ‘Jeanie Duck’ moment.
At FC, when dealing with this leadership challenge on consulting engagements we realized pretty quickly we needed someone who has the ability to work with the executive team, preferably one or two members, to ensure that while all the study changes are taking place, they are able to manage their personal development. So, that as a result of the consulting engagement, they are able to be fulfilled, happy and not burnt out.
We needed to find someone who would be a mentor to CEOs. A peer-counselor. When we first started doing this, all of the people misunderstood the role. We needed someone who is sincere and can gain the trust of the CEO and not breach that trust. That for us was the number one criterion.
Besides, we needed someone who was going to offer feedback to the engagement team without betraying the client’s confidence. We codified that into a set of rules to help with selecting the person.
When thinking about these rules, remember that the nature of the work we do in consulting is for male clients primarily. As a management consultant serving large organizations, you are not going to have many female clients. Unfortunately, this is still the case and going to be the case for quite a while. There are some positive changes occurring but they are happening very slowly.
The second criterion was that we did not want someone with big three (McKinsey, BCG and Bain / MBB) firm experience, but the person should have some exposure to management consulting. This was deliberate because, as an operating practice, we hire people with enormous potential and then train them in our way of thinking. We believe our value system is different and worth preserving.
Third, we felt that the person should be female because we are a bunch of alpha males and we needed a different viewpoint. Someone who is coming from a different background and who would challenge the things we are saying.
The other point is that we wanted someone who was young and accomplished because of all the changes taking place in management consulting with big data, restructuring and the new field of integrating psychiatry with leadership. Plus the person would have to deal with very senior executives. Moreover, if we just bring in a carbon copy like us we would never inject new ways of thinking into our firm.
Finally, we wanted someone who has done some thinking on issues facing big companies. It does not have to appear in any major journal but it has to do with practical leadership: motivating and getting the best out of them. That may be considered our Jeanie Duck moment.
Jeanie Duck was the first person appointed into BCG in 1988 directly into the partnership. She was an artist, a sculptor with a masters degree in arts education, and did not have an MBA background and she was brought in to lead the people development and change side.
So FC recruited a new partner initially dedicated to working with our executive clients. For every project, our objective was to make sure we engineer the delivery of shareholder value in a way that the CEO ends up having a fulfilling experience. We wanted to make sure we found a way to reinvent the CEO’s desires, passions, and enthusiasm for the business while we did the same for his/her company.
How to approach the CEO’s leadership challenge on any consulting engagement
The lesson here is that career success is not the same as career happiness. One can be very successful in their career but they may burn out quickly and therefore not grow. That would be unsustainable. We want to make sure that executives of our clients use our interventions as an opportunity to reinvent their careers in a way that enhances their happiness. Change is not meaningful if the consulting firm is only interested in shareholder value and the technical side of things. The people side of things is very important.
The CEO needs to feel personally motivated, invested and incentivized about what is happening. We believe if the CEO is happy through the process, his happiness would cascade across his leadership team. This is a new model but it has worked for us.
Fundamentally, we would like Firmsconsulting members to approach any consulting engagement from two sides. One side is from the pure and traditional consulting intervention where you have to fix the client problem. The other side is the human side where you have a team looking at how to grow with the leadership team and make sure that they see it as an opportunity to reinvent their careers.
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