The Top 2 Policies You Need To Protect Your Management Consulting Company

 

Even though the profession of a management consultant is not new (the first management consulting firm was created in 1886 by Arthur Little) many still do not fully know what a management consultant does on a daily basis. 

 

If we look at the big picture, a management consultant is your one stop shop when it comes to improve company’s operations and performance and solve any problems that arise. A management consultant reports and advises directly to senior management. A big part of their job is collecting data and aggregating that data into digestible reports that allow to pinpoint potential (or existing) problems. 

 

As you can see, the job of a consultant is multi-faceted. If you are a management consultant yourself, we don’t need to tell you all the different jobs you do – driving to and from client’s side, collecting data, managing relationships etc. But most importantly businesses, big and small, put the future of their companies in your hands. A lot is at stake and a simple mistake or an incorrect advice can lead to your client loosing revenue, employees etc.

 

So what happens then? What happens if distraught client who lost profit following your advice sues you for damage? 

 

One of the most essential insurance policies you can have is a Professional Liability Insurance for Management Consultant (also called Errors & Omissions) insurance. Professional Liability insurance was designed to protect businesses who provide professional advice or services for a living from lawsuits. While the insurance policy can not guarantee you won’t get sued, it will help cover the expenses related to the lawsuit. In the next section of the article we’ll talk more at length on what this key policy covers. 

 

Of course a Professional Liability policy will not protect your business from everything. Let’s take a look at the important insurance policies for a management consultant. 

 

Professional Liability – The policy that we mentioned above, is one that will protect/lawsuits are by far the most common and costly for businesses like yours. The PL policy will cover the costs associated with defending your case – cost of hiring an attorney, miscellaneous legal and administrative fees and of course the settlement. It’s important to remember that even if the lawsuit is baseless and is thrown out in court it would still cost money to defend yourself. The cost of attorney alone can amount to thousands of dollars. The Professional Liability policy will cover these costs regardless of the outcome of the lawsuit. 

 

Please note that this policy only covers lawsuits/claims alleging professional wrongdoing. 

 

General Liability – This policy also covers lawsuits from third parties, however unlike the Professional Liability policy, the coverage is only for general lawsuits. These include claims such as libel/slander, advertising related, property damage of the third party etc.  A General Liability policy is very important because many clients will require its’ purchase as part of your contractual obligations. This policy contains a few notable exclusions, common in the insurance industry, however it is one of the broadest policies available. These exclusions include war, malicious intent such as assault and battery, and illegal actions. The policy is usually written based on “all risk” which means that everything is covered unless specifically excluded.

 

Conclusion

The policies above are the cornerstone insurance products that every management consultant needs. General Liability and Professional Liability while seem similar, could not be more different. In fact, each policy excludes the types of claims the other policy covers. This means that a General Liability policy will deny claims related to professional wrongdoing and vice versa.

Qualities of a CEO: 5 Things the Board Expects from You

Whether you’re looking to land a CEO position or seeking to hire a CEO for your organisation, certain qualities constitute the ideal candidate.

 

Is Education Important to Become a CEO?  

 

Although several well-publicised college dropouts have gone on to become successful entrepreneurs and CEOs, Forbes reports nearly 40% of the Fortune 100 CEOs achieved an MBA status — and 60% were elite school graduates.  

 

Credentials from the world’s top academic institutions will not harm a candidate’s chances of becoming a successful CEO. However, having an elite education doesn’t guarantee success. In fact, some of the world’s most famous business brains have landed the top job with little academic achievement.

 

Egon Zehnder recently surveyed 800 executives. 78% of them believed a person’s track record is a poor indicator of future success.  A notable, 87% also stated an individual’s qualities and personal traits “explain the difference in performance between good and great.”

 

Qualities of an Effective CEO

 

Whether you’re part of a big business, or you choose to register as a sole trader and self-identify as a CEO,  the following qualities are worth noting. 

 

  1. Be a Good Strategist

 

You should be able to effectively collaborate with fellow employees at all levels, know what is required and explore potential opportunities. In an interview with Forbes, Cathy Anterasian points out a worthy CEO candidate can be a great strategist without mentioning “strategy” in their resume. She illustrates this point with an example from her time working with a healthcare board. The board was evaluating a candidate for employment who used the word “strategy” in his job application. However,  he failed to convince them he was the right candidate for the job because of his inability to act in an ever-changing market. 

 

“When we assessed his actual work, we discovered he was brilliant in ‘keeping the trains running on time’, “Anterasian explained, “but less prepared to deal with the ambiguity and complex market dynamics created by ObamaCare.” 

 

  1. Be an Excellent Operator

 

Although the previously mentioned candidate may only have kept the trains running on time, the ability to do so is, in fact, a valuable skill. If a candidate is good at planning a company’s next steps — but incapable of mobilising processes to get results — it’s unlikely he or she will become a successful CEO.

 

An excellent operator should have the ability to analyse the company’s options and put them into action. Anterasian recalls a situation where a candidate missed out on a position because he was unnecessarily over analytical. His actions immobilised the company because important decisions were left unsettled and the candidate was unable to take action in critical situations. “Strong operators deliver performance. They cascade vision down to specific goals, objectives and metrics,” explains Anterasian.

 

  1. Be Compatible with the Company’s Culture 

                                             

An organisation’s board members will pay particular attention to whether an individual can fit into the company culture and ethos. Anterasian reveals a damning statistic that suggests 70% of failed hires across all positions result from incompatibility. 

 

Anterasian worked with a board in a family-owned agribusiness that was looking for a new CEO. The board decided to reject the application of an internal candidate because they felt the leader had to be performance-driven and less “family-oriented”.

 

An ideal candidate should find the right balance between the ruthless nature of achieving results and adapting and having an impact on existing company culture.

 

  1. Create a “Followership”

 

A good CEO must inspire the whole team, from board members right down to the rank-and-file employees, so creating a sustainable, healthy work environment that reaps positive results.

 

To achieve this, you must be clear when communicating your company’s plans for reaching its goals. You must also provide incentives for reaching those targets that will motivate your team. As a result, you will meet your objectives and your employees and fellow executives will trust you enough to follow your subsequent actions. The following 3-step plan is a good way to communicate goals and create an atmosphere of trust and teamwork.

 

1)   Set a clear and compelling target

2)   Communicate how you plan to achieve that target

3)   Give an encouraging and results-driven purpose for reaching that target

 

Anterasian suggests that “followership” — where a leader creates an inspirational path and “following” for their employees or audiences— could be a deal-breaker if you can’t evoke passion, creativity and a sense of fulfilment. In an insurance succession she handled, one candidate appeared to be an excellent candidate for the CEO position, demonstrating a strong set of skills and experience. But he didn’t land the role.

 

His application was unsuccessful because Anterasian and the board heard some employees say that they would “march forward – but with no passion” if he became CEO. So they chose another candidate with less experience but with much more positive employee feedback.

 

  1. Be a Flexible Leader

 

With technological, financial and political circumstances ever-changing, it’s important to demonstrate your ability to adapt to the variables that may affect your company. 

 

“No one survives as CEO who doesn’t have the aptitude and potential to adapt to suddenly changing circumstances,” says Anterasian. “Boards look for that, especially with internal candidates who, by definition, are unproven at the CEO level.”

 

The most telling sign of a candidate’s inability to adapt — and one that will result in rejection — is a distinct arrogance.  A good CEO needs a sense of humility and the ability to take on new ideas and accept changes. They will not believe they are above everyone else. 

 

 It can be challenging to embrace new techniques and processes if you can’t adapt. The only way out of this is to align your perspective with current trends that could directly impact your company’s longevity. 

 

Be Shortlisted!

 

Take on board the tips discussed in this article,  and you should persuade the board you are the perfect candidate for CEO. You’ll also convince them you are the right person to keep the company fresh and profitable.

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