A Full Service Global Management Consulting and Executive Training Firm
by Kent F. Moors, Ph.D.
Executive Managing Partner:
Risk Management Associates, International, LLP
A medium sized distributor of home and office furnishings decided to retain a management consulting agency to increase employee oversight. The company serviced a multi-state area and believed certain middle managers were not following stated procedures. The consulting agency had been in business for almost thirty years and was well-regarded in the industry.
The agency developed a company-wide evaluation process for the furnishings distributor and assigned several of its own personnel to oversee the application. Owing to recent expansion resulting from a decision to increase its client base, the agency was administering several management evaluation projects at the time it decided to accept the distributor's contract. As a result, one of the consultants assigned had little actual field experience.
As luck would have it, the inexperienced consultant ended up overseeing a region where significant procedural problems were taking place. Unable to ascertain the nature of the compliance problems, and having erroneously concluded the region under his review was not causing any of the suspected problems, the consultant decided to allow regional management at the client company to provide the essential information for the process review. The consultant did so in the belief that both he and the managers would benefit from positive evaluations, which the consultant had concluded were deserved anyway. To add credence to his "work," the consultant filed frequent and detailed reports to the agency. Unfortunately, the reports were largely written by the distributor's managers, whose violations of company policy went undetected.
Shortly after the positive reports were filed and forwarded on to the client company, a multi-office business customer complained to the head office about furniture billed for but not received and other pieces received damaged. The company initially relied upon the consultant's report to shift blame to a shipper hired to deliver the furnishings, only to conclude later that the distributor's own regional affiliate was responsible. The company conducted its own investigation into the practices at the region and found numerous and significant violations of procedure.
The client subsequently sued the consulting agency and an out of court settlement for unspecified damages resulted. In addition to the financial loss, the agency also suffered a major blow to its integrity and reputation, hard won over three decades. Despite being in the business of providing management services to clients, the agency allowed its own expansion to adversely impact on its own managerial practices.