The key differentiator between good and great organizations is the ability to find, develop and retain human talent. If an organization is to survive, it will only be through ensuring the continuity of good business practices and having the skilled people at the right place and at the right time. The following examples show how important human capital is along with the financial capital.
Case 1: Failing to succeed in 5 years, the owner is considering to closing down the company. Why do they reached to this stage when they had spent huge amount in business? The investigations showed that the firm key persons were more or less taking ineffective decisions without evaluating the situation.
Case 2: One of the educational institutions hired services of an ex-Brigadier, who served in education branch in military, as Director General to grow the institution but failed to put the institution on the right path. The crucial question is why did the institution could not grow? Discussion with the owners and observation revealed that the DG spent more time in shouting at others and developing differences between partners than concentrating on other aspects of business. Qualified educationists were either fired or left the system. Students were dissatisfied with his policy of interference in their private matters that decreased number of enrolments. Eventually, the institution was sold.
Why Do You Need External Consultants
Learning Organisations always busy in finding new ways to achieve strategic advantage in a growing and competitive economic environment. As shown in the above examples, financial capital alone is not sufficient to bring effectivity and efficiency in organizations unless appropriate Human Capital is developed. It can be said, if finances are extrinsic factors for running an organization so managing human capital is an intrinsic factor for organizational growth. Contemporary research shows that only those organizations grow, maintain quality, absorb internal and external pressures and survive in a long run that spend on human capital through retaining skilled human capital and enhancing employees' skills.
In the era of globalization, speculative management style cannot be effective because speculative decisions are more prone to fail in a long-run. One of the reasons of a large number of businesses failure in developing countries is that owners are reluctant to learn new learning and rely speculative style of management. Spending on the development of employees is seen as waste of financial resources. They are unconcerned about the growth needs of their employees that can help business to grow further. Gained profits by spending on employees development might not be assessable in short span of times; however visionary organizations are more concerned about the growth in long run.
For the growth of any organization, it is imperative that issues such as employees’ motivation, division of work, organizational culture, delegation of power, and required skills in managing people should be addressed properly.
It is often asserted by the senior management that we have qualified people; hence we do not need external consultants. This is a wrong conception. If external consultants are not important, multi-nationals companies never hire services of them. We do not argue that qualified people are not working in your organization but possibility is that they might not be able to see the angle from which the external consultant will view it. There are many reasons why this is possible that they could miss a key point(s) that is important for the growth of the organization.
Being a permanent member of the team they might be so busy in handling day to day affairs that they oversight the situation.
Studies on culture show that it is difficult to see beyond ones own culture that you have internalized over the period of time and this finding is also applicable on your team members.
Another factor that may hinder you and your managers to view the system innovatively is human bias, which is very common in organized systems, thus you and your members might not be so open in accepting and appreciating new situations as they should be.
External consultants are free from any cultural effects and bias because they are not part of your system. They are neutral and act professionally. They prepare reports and recommendations based on the research that they conduct in your system.
We have a pool of qualified professionals who
Free service: If you have any question regarding management and organizational development, send us your QUESTION and we reply back to you as soon as possible. We do not charge any fee for consultancy that is given by email.