CONSULTING WITH SMALL BUSINESS:A PROCESS MODELby John Charles Bruckman and Steve Iman

Increasingly, business professors,students, and retired business execu-tives are using their knowledge toassist small businesses. This is par-ticularly true of those who participatein the Small Business Institute classessponsored by the Small Business Ad-ministration. Few participants in theseassistance programs are trained inconsulting processes, although theyare usually highly skilled individuals.Solving organizational problems re-quires more than academic training.Beyond the consultant's basic busi-ness knowledge many non-technicalskills and values are required to useknowledge effectively for improvingthe client's organizational situation.

There are approximately 3,500management consulting firms in NorthAmerica which can assist any busi-ness with operational or managerialproblems, providing the client canmeet the costs of the services. Untilrecently the majority of small busi-nesses in this country were unable totake advantage of these professionaladvising firms because they could not

Dr. Bruckman chairs the Department ofHuman Resources and Small Business Man-agement of the School of Business Adminis-tration at Califomn State Polytechnic Uni-versity, Pomona. Having published widelyand consulted with both federal and privateagencies, Dr. Bruckman was recently awardeda Senior Fulbright Fellow In MontevideoUruguay.

Dr. Iman is a professor of management atCalifornia State Polytechnic University inPomona, where he teaches in the Depart-ment of Human Resources and Small Busi-ness Management and is actively Involvedwith the Small Biisine

ment, and Implementation require dif-ferent activities and provide separatechallenges for both the client and con-sultant. An understanding of the re-quirements of each phase is especiallyimportant in the overall planning ofproject activities, within a frameworkof time available to the consultant.

PHASE A: CONTACTStep 1: Solicitation. Consultants

generally have a rather informal ap-proach for "getting the word out"about their available resources andservices. The communication networkwhich yields initial contact may haveimportant consequences on the typesof clients one obtains, as well as theexpectations the clients bring to theproject. The authors are currentlyparticipating in a Small Business In-stitute (SBI) assistance program com-posed of faculty, students, and ServiceCorps of Retired Executives/ActiveCorps of Executives (SCORE/ACE).Both faculty and SCORE/ACE ex-ecutives are involved in presentingnumerous assistance programs withinspecific geographic areas. They pur-posefully use a variety of media topublicize their programs. A variety ofsolicitations have provided access tobusinesses outside of the normal con-tacts of the business school; many arenew businesses. In a number of "overthe transom" cases, potential clientscontacting the authors have heardabout the authors' successful programswith prior clients.

Step 2: Reconnaisance. The initialcontact between a potential client andthe consultant is a critical one; boththe client and consultant must estab-lish expectations of commitment andresourcefulness. At the earliest oppor-tunity, client-consultant dialogue onthe following topics is deemed critical:

Nature of the overall program. Limitations of the specific assist-

ance program.

Available resources. Experience and formal training of

individual staff members. Composition of consulting teams. Methods of operation. Consultants' desired results for the

project. Project parameters and constraints

such as timing, budgets, etc.It is important at this phase to en-

courage statements from the clientabout: Purposes for requesting assistance. Perceived nature of the problem

or problems. Brief information about the firm. Client's reservations about seeking

assistance. Desired results of the process. General ground rules they have

about involvement of outsiders.At this early stage the consultants

must be aware of the key figures inthe client's system and be sensitive totheir concerns. Since consultants areoften dealing with the "life blood" ofmanagers and owners, strong emotion-al elements are often apparent in thethinking patterns of the client. Theclient's behavior must be met withrespect. Effective consulting involvesmore than solving mere technical prob-lems; sensitivity to the feelings andpersonal needs of clients is extremelyimportant for establishing the trust andunderstanding which will later be re-quired for developing commitment toa sound course of action.

Step 3: Go/No Go. Based on thefirst two steps, both parties must cometo a decision as to whether or not toproceed with the process. The clientmust decide if there is a good chanceof a positive end result. The consult-ants must understand their own mo-tivations and assess their available re-sources.

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Step 4: Team Building. The con-sultant must build a team around theperceived needs of the client. Thisshould involve selecting team mem-bers who have talents and skills whichfit the particular situation. A varietyof viewpoints, experience, and analy-tic skills should be built into the re-source team. The more varied theviewpoints, the better the changes arefor an objective and successful output.Yet the team members should possessa generally similar set of values. Thisstep should also involve activities de-signed to facilitate effective relation-ships and communications among par-ticipating consultants. Prejudice ornarrow-mindedness on the part of anyteam member should be avoided at allcost. The team members should becomfortable expressing their own feel-ings of discomfort and lack of experi-ence, and learn to deal openly withthe insecurities of othersespeciallywhen working with fledgling consult-ants. Consultants who maintain a sup-portive and trusting relationship witheach other are less likely to evokedefensive behavior towards clientswhich can disrupt the working rela-tionship.

PHASE B: PROBLEM DEFINITIONStep 5. Defining problems. This is

one of the most crucial steps in theprocess. Generally, not enough workgoes into this phase. It is rather easyfor a manager or an inexperienced con-sultant to mistake symptoms for centralcauses of problems. It is important thatconsultants pay close attention to theirdiagnostic approaches, avoiding ad-herence to the first "problem defini-tions" which arise out of the initialchaos of information. Experience re-peatedly demonstrates that problemsare rarely as simple and recognizableas they may seem to be. "Problemdefinitions" must be reviewed through-out the consultation process; the con-sultants and clients should either re-affirm the validity of the definitionsor redefine the problems.

At this point the future working re-lationship between client and consul-tant should be more carefully ex-amined. Consultants should be morespecific about who will work on theproject, for how long, and explainwhat the team hopes to accomplish.Clients should be encouraged to setlimits on time and funds. They shouldclearly state restrictions regarding ac-cess to staff and available data. Clearrepresentation by both parties will pre-vent unnecessary conflicts during thecourse of the project.

PHASE C: DATA SEARCHStep 6: Research Planning. In plan-

ning their research activities the con-sulting team must:

a. Define specific purposes for thestudy including any limitations on theresearch. The boundaries must beclearly established.

b. Determine a study approach.How shall the team proceed with dataon a step-by-step basis? Who is to leadthe team? What are the respectiveduties of each participant? Deadlinesmust be set for the production of re-ports or working memos.

c. Be sure that all team membersunderstand the desired end products.If the team knows what the end prod-uct will resemble, it can move quick-ly toward its development.

d. Detail in a working memo thelevel of intended fact finding. Thememo should answer questions such asthe following: Who will be inter-viewed? What documents will be re-viewed? What literature will be re-viewed? What outside resources mightbe needed to assist the team? Willquestionnaires be utilized? Shouldflow charts be developed?

All of the answers to the preceedingquestions should be clearly presentedin a written proposal to be sharedwith the client for discussion and re-vision. Creating an environment which

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will be conducive for change canonly be realized when the consultationteam brings the key members of thebusiness into the team effort as work-ing participants. They should be in-volved in as many levels of decision-making as time allows. They are morelikely to accept the final plan if theyhave been involved in a strong com-municative relationship with the con-sultants throughout the work of theproject. The owners of small busi-nesses are not only information sourc-es but are often actual embodimentsof the problems and solutions.

Step 7: Data Collection. A numberof alternatives are available for col-lecting data relevant to effective con-sultation. Seven assessment techniquesparticularly applicable to small busi-ness settings are outlined below:

a. Structured and Unstructured In-terviews. Structured interviews withpredetermined questions can be usedin most cases. Having taken the timeto think out questions, consultantshave a better chance of collecting use-ful data. Unstructured interviews (nopredetermined questions) are bestused toward the beginning of a projectwhen problems are not clearly under-stood, or when contradictory "prob-lem definitions" exist. Key members ofthe organization, customers, suppliers,employees, supporters, and competi-tors are all sources of useful informa-tion.

b. Review of Documents and Pro-cedures. Document and procedural re-view is an essential early assessmentstep in many projects. Basic data aboutconstraints and key problem areas willemerge from this review. Key questionscan also be developed from this ma-terial.

c. Statistical Evaluation. Many toolsare available for assessing quantita-tive data which may be collected.Analysis of data used for purposesseemingly unrelated to the problems44

within the organization often will pro-vide important information which willhelp the consultants establish goals.

d. Direct Observation and Feed-back. The organization should be ob-served in many of its normal functions.Regular discussions with the clientabout the consultants' observations ofon-site operations will keep communi-cation lines open. Times spent "justobserving" the daily activities of a firmis often extremely productive.

e. Pre and Post Questionnaires.Written surveys can be used in a var-iety of ways to assess organizationalfunctioning; they might be used to ex-plore marketing problems and situa-tions, employee morale, or they mayreview the effects of management de-cisions on general operations.

/. Client Feedback. Clients will us-ually provide consultants with an as-sortment of reactions to their team'sobservations and assessments. Thesereactions are valuable for testing thevalidity of information, as it isobtained. Sensitivity to client feedbackis essential for maintaining the client'sbelief in the possibility of change, andcommitment to the final plan.

g. General Monitoring. Throughouta consulting project, periodic activitiesof the business must be monitored inorder to detect changes or trends inthe organization. A problem well infocus in January might be mistakenlyidentified by tax time.

h. Self-Evaluation. Client evalua-tions of their own professional prob-lems are valuable in a wide variety ofsituations. Self evaluations can be soli-cited by distributing questionnaires de-veloped by the consulting team to allemployees. This information can beused by the consultants for projectplanning. The client also obtains val-uable feedback from employees.

Although data collection systemsshould be developed with an eye to

consulting problems, effective diag-nostic approaches will probably com-bine a variety of the techniques out-lined above. An effective system of as-sessment combines informal memo-randa with more formal reports basedon specific data gathering points inthe process.

PHASE D: ANALYSISStep 8: Pattern Delineation. As data

is reviewed, patterns similar to thoseof a crossword puzzle begin to appear.Parts of the pattern are clear fromthe beginning and help to delineateprospective solutions; empty spacesprovide opportunities to "test fit" avail-able data for developing a more com-prehensive understanding of the situa-tion. If available data fails to fit thegaps, either additional data needs tobe collected, or consultants must ac-cept the fact that some of their solu-tions are inconclusive, or at best rea-sonable assumptions. The two lattersituations are common to many pro-jects.

Step 9: Development of AlternativeResponses to the Problem. At thispoint the objectives of a solutionshould be clearly defined. Do soughtafter goals include higher profits, or agreater return on investment? Typi-cally, a constellation of objectives willarise and consultants are advised toput them in a priority order. Objectivesshould be stated in detailed terms inorder that solutions may be specificand operational. Alternative approach-es should then be outlined in a work-ing memo to be reviewed by the client.Each alternative solution should betested in relation to such factors as:

Selection criteria as establishedby the consulting team.

Limiting factors as established bythe client or inherent in the work-ing environment.

Pertinent facts established by con-sultants' research.

Cost benefit analysis conducted byconsultants.

Step 10: Ranking of Alternatives.The analysis just described should pro-vide the consulting team with sufficientinformation to rank the alternatives indescending order. Client involvementin this step will be helpful in assessingthe validity of research to date.

PHASE E: PLAN DEVFIOPMENTStep 11: Plan Preparation. Depend-

ing on available time and resources,the consultants should consider thepossibility of developing comprehen-sive plans for at least two alternativesolution approaches. Often, the de-tailed preparation of a plan will re-quire a reordering of alternative plans,for one may prove to be unworkablein actual preparation. The plans shouldgive detailed descriptions of the fol-lowing:

Activities required. Responsibilities of each of the

parties. Time schedules. Available resources.

In the absence of client involvementat this phase, consultants need to askthemselves, "Is this plan going to beacceptable to the client?" "Is it practi-cal?" "What about its timing?" "Whatrisks are involved?" "What long runimplications need to be considered?""Is the solution technologically soundfor this particular industry?" Whenquestions of this type have been satis-factorily answered, the consultants areready to market their ideas.

Step 12: Plan Marketing. The con-sulting project normally entails theconsultants submitting data previouslyunknown to the client for his or herinspection. Key members of the clientsystem are often too ego-involved inthe activities of the business to analyzeorganization problems objectively. Theconsultants can rarely expect instant

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acceptance of their ideas, so they mustdevelop strategies for fair assessmentsof their proposals, as reasonable andworkable plans. In part, resolving thisproblem involves laying the ground-work for commitment, understanding,and support early in the project. Theteam should bring the client alongslowly, in an informational sense.Client involvement in early decisions,and regular feedback activities providethe consultants with opportunities tointroduce the data base in small mod-ules in order that a client is not over-whelmed during the latter stages. Con-sultants must also develop plans forpresenting and marketing their pro-posals. The approach at this pointshould remain sufficiently flexible torespond to client reactions and antici-pated resistances.

PHASE F: IMPLEMENTATIONStep 13: The Missing Link. Deep in

the gap between knowledge and prac-tice lie innumerable consultant reports.The energy generated by effective con-sulting often vaporizes in the absenceof follow-up plans or when implemen-tation of solutions begin to threatenthe client. In planning consulting pro-jects, time should be budgeted forfollow-up procedures. The consultingteam should also support the clientduring the initial stages of implementa-tion.

Step 14: Evaluation. In addition toevaluating the effectiveness of consult-ing solutions, every project which as-sists small businesses provides oppor-tunities for the consultant to learnmore about the consulting pro-cess itself. In addition, group evalua-tions of a team's work provide uniquelearning opportunities. Evaluation ac-tivities should be part of any compre-hensive project planning; too oftenthey are not. Any of the assessmenttechniques outlines in Step 6 may beuseful for conducting evaluations ofprevious projects.46

The authors also conclude that con-sultants with small businesses by aca-demic teams can be a fruitful educa-tional experience for the academiccommunity, and a practical cost-effec-tive means of solving small businessproblems. The quality of the outcomeof the process is in direct relationshipto the pre-planning and supervision ofthe professor in charge of the con-sulting process, and to the receptivityof the client.

ReferencesAdams, John, Theory and Method in Orga-

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Albert, Kenneth J. How to be Your OwnManagement Consultant, New York: Mc-Graw-Hill, 1978.

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Lippitt, Ronald; Watson, J,; and Westley, B,The Dynamics of Planned Change. NewYork: Harcourt, Brace and World, 1958.

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Nadler, David. Feedback and OrganizationDevelopment: Using Data-Based Meth-ods. New York: Addison-Wesley, 1977.

Schollhammer, Hans and Kuriloff, A. En-trepreneurship and Small Business Man-agement. New York: John Wiley & Sons,1979.

Steele, Fritz. Consuttin^ for Orf>aniialionatChange. Amherst: University of Massa-chusetts Press, 1975.

Stegall, Donald P.; Steinmetz, L. L.; andKline. J. B. Managiitf; the Smalt Bu.siness.Illinois: Richard D. Irwin, Inc., 1976.revised.

Steinhoff, Dan. Srt^atl Buslne.s.'i Manage-ment Fundamenlats. New York: Mc-Graw-Hill Book Co.. 1978.

Sullivan, Harry Stack. The Psychiatric In-terview. New York: W. W. Norton &Co., 1954.

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