Everybody likes to kick consultants these days, but a new breed of management consultant has some companies singing their praises.
Charles J. Caray had known two species of management consultant in his professional lifetime, and both of them gave him the creeps.
"First came the slobs who looked like they had dressed on the subway over here," says the President and owner of Laminaire Corp., a Rahway, N.J.-based manufacturer of electronic components and industrial air filters. "And then there were the superslick, overaggressive types who drove me up a wall. It didn't help my attitude that these guys had no tangible product to offer me, either. I guess you could say I was, uh, resistant to their basic sales pitch."
You could also say that Garay, despite his low opinion of the breed, found himself in an acute consultant-shopper's posture. Not that Laminaire was floundering. On the contrary: Over six recent fast-track years, the company had outgrown its first computer system, moved to a new facility, consolidated its three discrete divisions, and more than quadrupled its work force and sales figures, from 25 employees and $1 million annually to over 100 people and nearly $5 million. The market and the bottom line both looked good.
Still, Garay was a troubled man. Despite -- or, perhaps, because of -- such expansion, Laminaire was suffering awkward delays in implementing its new software program, and job costing on some of its more complicated assembly projects was proving to be an accountant's nightmare. Growth was not the controlled variable it had been in the company's infancy, either. As he struggled to pull together new people and new departments, Garay noticed that he was calling more and more meetings and getting less and less out of them. He also realized that his in-house chain of command was more hindrance than help.
"I knew what the issues were," Garay would later say, "but I had trouble getting my people to respond, because they were so influenced by my own thinking. My ideas had become iheir ideas, and vice-versa. To a certain extent, of course, you want that in a smaller company, but it can also be a liability. If I put pressure on a product manager to change something, he turns around and puts it on the people under him, which they resent. Conversely, if something new is tried, everyone wants credit for the solution. I didn't care about the credit: I wanted results. So it dawned on me that I needed outside help. The question was, What kind of help, and who?"
Did Garay envision an answer to his managerial prayers?
"Sure," he says. "A bright young punk who understood the new technology and could apply it to my business. But I wasn't too hopeful."
If anything, Jerry Reilly, Laminaire's comptroller, was even more skeptical than his boss was. "I'd had quite a bit of experience with management consultants," says Reilly, who had toiled among them at Arthur Young & Co. and worked with many more during his tenure at Republic National Bank of New York, "and most of it was poor. These guys came in and told you what you should be doing, without delving into what the people in the company were actually trying to do. In all my years at bigger companies, I never saw a consultant's plan implemented in its entirety. But I did see an awful lot of bruised feelings."
Enter Henry Ekstein, head of his own small consulting firm, Management Resources Iric., based in nearby Teaneck, N.J. Ekstein is unique within the industry: a one-man road show with a small support staff, who feels as at-home operating in $8-million companies as he does in $80-million or $800-million ones. Garay was a bit taken aback at the first sight of Ekstein. Regal, almost stiff in bearing, a man of thick accent, Old World pedigree, and exaggeratedly professorial mien, he hardly fit the profile of the business-school hotshot Laminaire's president thought he wanted. Nor, indeed, did he conform to other popular stereotypes of his profession. Engineering and scholar by inclination, Ekstein boasted solid credentials in marketing and management and came highly recommended by Laminaire's data processing consultant, of all people, who had heard of his track record with small to medium-size growth companies.
To Garay and Reilly, however, Ekstein remained an unknown quantity. After a tough round of interviews, the consultant convinced them to give him a shot at the contract. His selling points: a fixed fee, with guaranteed results, and a process he calls "interactive consulting." The latter is a term worth defining; even its originator finds the task a slippery one.
"I'm still struggling with the theory behind the method," Ekstein admits, "but, basically, interactive consulting means working closely from the outset with the people most likely to be affected by whatever changes seem called for. Together, we design and implement these changes as we go along. The employees share directly in the credit because they share directly in the creative process."
A concise working definition may elude him, but Ekstein is eloquent about what interactive consulting is not. First of all, it is not big on the standard leather-bound report.
"The problem with most consultants," he notes, "is that the reports they write contain the seeds of their own destruction. My reports are usually summaries of changes already implemented, not plans for what might be done. When I hear about a report gathering dust on some executive's shelf, I'm not surprised. Somebody in that company wants it to fail. Tell me, isn't it logical that if an outsider came into your company representing a threat to various employees or departments, those employees would fight tooth and nail to sabotage his work? Of course they would. My general rule is, the better the consultant's advice, the greater the resistance to it."
Secondly, interactive consulting is not big on open-ended fees. Large consulting companies normally command large per diem revenues. Ekstein is content working on a flat project rate, even if the length of time required to complete the job winds up gouging him. He figures that he makes up any losses through repeat business, while avoiding the usual conflict of interest between client and consultant.
