What is good advice worth?
By Scott Francis
From Northwoods Commerce magazine
When deciding to make an investment in hiring an outside consultant or advisor, one of the most common concerns most business leaders have is trying to justify in their own minds the cost of professional services. Since business owners and senior managers are paid to do many of the things that outside consultants and advisors often do, there can also occasionally be ego issues that have to be addressed. Good advisors can save companies lots of time and money, not only by the business building ideas they can deliver but also by the mistakes and errors they can help avoid. The following story helps illustrate just one way the value of outside advice should be considered.
The fable of the Vibrating Machine and the Consultant
There was a manufacturing company who was having a great deal of trouble with vibrations on their assembly line. They had run all sorts of trials to solve their problem, to no avail. The vibrations were costing them hundreds of thousands of dollars each year in quality defects and accelerated wear on their equipment. The company had brought in a number of experts, but none of them solved the problem. Many of the experts claimed to know everything about the machinery, yet they spent lots of time and charged a lot of money without solving the problem.
Just when the company was ready to give up and resign themselves to accepting the vibration problem as a cost of doing business, an advisor was referred to them by a business associate who had a similar problem that the advisor had fixed. Since the problem the manufacturer was experiencing was costing money by the hour, they contacted the consultant and had her come in right away.
The advisor arrived at the factory with a small toolbox and before going to the machine, asked the machine operator and superintendent a series of questions. She then went to the machine and took a nut, a bolt and a washer out of her toolbox. The consultant drilled a small hole in the machine, inserted the bolt and fastened it with the washer and nut. The vibration problem was solved.
The next week the factory owner received a bill in the mail from the consultant for $20,000. He immediately got on the phone and demanded that the advisor provide him with an itemized bill since he had heard from the superintendent that the advisor was just in the plant for 15 minutes and the only parts used were a nut, a bolt and a washer.
The advisor asked the factory owner if the vibration problem was solved and was assured that it was. She asked if the machine was running at full capacity and making the company money throughout the day. She was again assured that it was and that everything was working well. After this assurance the advisor said she would gladly provide an itemized bill. Her itemized bill, which arrived at the manufacturer’s office several days later, looked like this:
Vibration problem – consulting services itemized billing detail
- One bolt .07
- One nut .02
- One washer .01
- Knowing where to place above items $19,999.90
The advisor had solved a vibration problem that was costing hundreds of thousands of dollars in quality defects and accelerated part wear. Fixing the problem for $20,000 was indeed a bargain. The moral of the story is don’t be penny wise and pound foolish. When you are questioning the value of working with an advisor, don’t just ask yourself the cost. Consider what is at stake and what pain you could avoid, or what you potentially stand to gain from the advice. You can spend lots of money and perhaps eventually solve a problem through trial and error; however, with an investment in a good advisor who has “been there and done that,” you can often gain a great deal from their experiences at a lower cost and with less risk than spending your valuable time and money on trial and error.
About the author: Scott Francis is president of Topline Development LLC, a strategic marketing consulting group that provides new product identification, advertising plan development, go to market strategies and sales support programs. To learn more about Topline Development LLC, visit their website at ToplineDevelopment.com or contact Scott directly at [email protected]