Private Companies Can Be Better Served

Many private companies, including closely held, owner operated, family-owned, current or potential ESOPs, etc. often plateau in the mid-tier range of $5-100M, 50-500 employees. They have a bank, an accounting firm, an attorney, etc., but are typically not served as well by a business improvement adviser.

Edwin G. Booz determined that companies could benefit from the expert, impartial advice of someone outside their own organizations. This led to management consulting. Arthur D Little, Accenture, Booz Allen, McKinsey & Company, The Boston Consulting Group, and Bain & Company advise leading corporations (Fortune 1000 companies for the most part), but these consulting firms tend not to match the needs of the numerically larger tier of higher-growth potential smaller companies with employees of 50 to 500 or annual sales of $5-100M, whose owners tend to be more independent and distrustful of outside professionals who charge highly for their time, not necessarily for their value.

Michael Gerber/e-myth targets this tier with educational information. George S. May offers a service that has been characterized as too much of a “one-size fits all” approach. Other service offerings come from Vistage, IIB, and a variety of boutique consulting and coaching firms and individual specialists.

There is an opportunity to improve how to provide (for a modest retainer plus value-based incentive compensation) highly customized value improvement services especially for private companies in the high-growth-potential mid-tier.

Advances in best practices in some industries, e.g., Agile project management and Scrum in software development, can be adapted for much wider application in other industries.

In a time of increased government regulation, those dedicated to private enterprise have an opportunity and obligation to help our national and global economy by doing more to improve the value of private enterprise.

New roles that help management teams and their private companies improve might evolve out of improvements made in the traditional roles of members of boards of directors, advisers, consultants, educators, etc., leading to a more hands-on applied role with their corporate “clients.”