Restructuring II
I returned to the same city several months later at the invitation of a business partner of the majority owner of the two banks. He wanted me to look at the insurance company he headed because he intended to begin acquiring insurance companies in other island nations and needed to be sure that his own house was in order before expanding inro other Caribbean nations. I had been invited into the island nation by a representative of a technology company and was using their business cards and email/phone services. They paid me a daily fee and expenses. They doubled by fee to the organization, which is the model I used when I learned issue-based consulting. There is a difference between expertise-based consulting and issue-based consulting. An expert in warehousing will tell you how to build the warehouse, how to arrange the shelving and the bins, how to create an ABC system for inventory counting and a dozen other warehouse-associated things. The issue-based consultant will advise whether you need a warehouse at all, and which of your functions should be executed there; perhaps she will advise you on staffing levels and skill requirements.
I learned issue-based consulting. I didn’t need to be an expert in specific functions to know whether the insurance company was doing what it should. It was wasting more than a million dollars a year by ineffective and inefficient management of tasks. A full-service insurance company, it sold life, health, automobile and home insurance to individuals, and group policies to businesses. It also offered building insurance and a few other policies to businesses. The largest source of revenue was individual life policies.
Theory of Constraints
Keep reading with a 7-day free trial
Subscribe to One Foot in the Gravy to keep reading this post and get 7 days of free access to the full post archives.