The results depend on the type of firms to be involved. Complementary one-on-one management consulting seems to have positive medium-term effects only for larger microbusinesses and those run by more entrepreneurial individuals. Consulting based on Kaizen seems to work better for light than heavy manufacturing firms.
What’s the rationale behind this?
Traditional business training programmes for micro and small firms have not always met expectations. A potential explanation is that training entrepreneurs on business concepts and practices in a classroom setting isn’t enough for them to be able to properly identify the weaknesses in their businesses, adapt theoretical concepts to their business reality and implement fixes that can eventually lead to improved business outcomes.
Complementing training programmes with personalised consulting sessions is seen as a potential solution to those challenges, as entrepreneurs can work with the consultants to jointly identify and act on the identified business flaws to improve performance.
Small business owners and managers
Outcomes of interest
Business knowledge, business practices, business performance, business growth
Does it work? Here’s what we know so far…
Management consulting for micro firms
- Adding a few one-on-one consulting sessions at the end of an intensive training can help micro and small firms to adopt more recommended business practices than they would do if they had received only the training component and increase business knowlegde.
- Seven to ten months later, access to the complementary individual consulting sessions seems to have positive effects on business performance, as measured through higher survival rates and increased sales and profits, regardless of whether it is a one-off session or more continued support.
- In the only study using a longer observation window, the sales gap between those who only received the training and those who received both the training and the continued individual consulting sessions closes after two years.
- In the medium run (two years after the programme), there only seems to be persistent positive effects for certain types of micro firms: larger micro firms and those run by more entrepreneurial individuals.
- Adding individual consulting sessions at the end of the training does not seem to help microentrepreneurs to increase the number of employees in their businesses or improve formal access to capital, even when the consulting support expands over three months and combines individual and group sessions.
Kaizen consulting for manufacturing firms
- Complementing management training with one-on-one Kaizen consulting sessions can help manufacturing firms to adopt recommended production management practices at a higher rate right after the programme.
- The higher rate of adoption of Kaizen practices doesn’t seem to lead to improvements in business performance for firms that use heavy equipment, materials and products.
- On the contrary, and despite the adoption-rate converging after three years, the consulting seems effective at increasing the sales and value added of firms with more flexibility to introduce changes to their production processes.
- This suggests that the consulting complement might help business owners and managers to better choose which practices to keep and which to discard.
- The effects on business performance only show two years after the consulting sessions. This indicates the existence of a relatively long assimilation period during which managers try out recommended practices and keep only the useful ones.
Who benefits the most?
- Micro firms with higher sales volumes, those that have been in the business longer and those run by more entrepreneurial individuals seem to benefit more from the addition of tailored management consulting sessions.
- For smaller and new micro firms, adding a one-hour talk by successful programme alumni as part of the training can be more effective than doing one individual consulting session with each participant and at one tenth of the cost.
- Firms that have more flexibility to introduce modifications in their production processes seem to benefit more from the addition of Kaizen consulting sessions.
- If offering only a one-off diagnosis session, running it at a single central location instead of at the business site can reduce commuting costs for the consultants without affecting session effectiveness.
Ideas worth trying
- If running a business training programme for micro and small firms, consider offering follow-up consulting sessions to participants running larger and more flexible firms and those with a stronger entrepreneurial mindset.
- If offering management training to light manufacturing firms, try adding one-on-one consulting sessions based on Kaizen principles at the end of the training.
- If aiming for a cheap complement to your business training programme for microbusinesses, try using a talk by a role model instead of a more expensive one-on-one consulting session.
What to avoid
- If working with micro and small firms, avoid complementing intensive training with business consulting sessions across the board without taking into account the entrepreneurs’ characteristics.
- If only offering a one-off consulting session after a training programme, avoid running it at the business location instead of at a central location. The evidence suggests that doing it at the business location might not add value but would increase the cost of the programme.