Suitcases packed, armed with a PowerPoint presentation of matrices and frameworks, and an eloquent vocabulary of “synergies” and “core competencies,” another consultant prepares to deliver million-dollar advice to some of the leading executives of Fortune 500 companies. We all know who they are, but we have no idea what they do. In 2019, over 20% of the graduating MBA class from Harvard university chose to pursue management consulting, a number that has been progressively increasing from years prior. With over 300 million people in the United States, and another 8 billion across the globe, a decision is being made every nano-second. From which stock to buy to which color socks to purchase, to every innovative (and incompetent) decision made, consultants have a hand in it all. While consultants contribute a healthy service in stimulating the economy and keeping big business, in business, there are a multitude of pitfalls that can occur in the profession and have drastic legal and ethical implications. <br/> To further examine this dichotomy of theoretical versus applied consulting, I decided to put my consulting skills to the test. By partnering with the New Venture Group, we delivered consulting services to Marni Anbar, the founder and creator of the DiscoverRoom, a hands-on, self-directed initiative allowing students to explore their curiosity in fields ranging from evolutionary studies to geology and astronomy. In response to the DiscoverRoom’s increasing demand and capacity to grow, New Venture Group consultants engaged with Marni Anbar in an attempt to analyze the important question of “what steps (from a business perspective) should Marni consider to further the DiscoverRoom (in a way that can make it both profitable and continue to serve as a creative space to further child development)?” <br/> This project was a hands-on way to examine the fundamentally complicated relationship that exists between consultants and their clients, and whether or not it was possible for college students to advise an initiative to remove the disparities that exist in STEM education in one of the worst-rated states for public school education in the country. By applying the research and findings uncovered when analyzing the theory of management consulting to this real life engagement, several parallels were discovered. As in the case of many consultants, our solution was never implemented due to external factors, which further creates a gap in allowing us to analyze whether or not our proposed solutions contained any value or not. As seen in our case, consultants often fall victim to not having their solution implemented due to a variety of external environmental trends and factors. This “incomplete” understanding of the picture further creates an aura of skepticism behind consultants and the work they do.

In the end, an increase in repurchases of company stock will also influence the rate of dividends to increase. This means, an investor should not necessarily worry about the dividends they receive, but rather to see if the company is making profit at a consistent rate and reinvesting into value-added activities. Through the major pillars of finance, technology, legal, and human resources, the budget for reinvestment can be optimized by investing into these respective categories with percentages that are mindful of the specific companies needs and functions. Any firm that chooses to ensure proven methods of growth will enact a combination of these four verticals. A larger emphasis on finance will branch out efficiency in the entire organization, as finance control everything from the toilet paper to the acquisitions the company is making. The more technology is used to reduce redundancy and inefficient or costly operations, the more capability the organization will have. IT, however, comes with its technical challenges; having a team on-hand or even outsourced, to solve the critical problems to help the business continue operation. Over-reliance into technology can be detrimental to a business as well if clear processes are not set about straight to counteract problems the business will face like IT ticketing systems or recovery and continuity support. Therefore, technology will require a larger chunk of attention as well.

The upcoming legal and HR investments a company will make will depend upon its current position and thus the restructuring will differ for every firm. Each company has its own flavour and style of work. In that regard, the required legal counsel will vary; different problems will require different solutions for risk control and management, which are often professionally advised by intelligent corporate counsel. This ability to hire efficient legal counsel would not arise in the first place if a firm were to give out dividends; the leftover profit would have gone towards the shareholders and not back into growing the equity of the business. Lastly, nothing is possible without the contribution of people, and their efforts. A quality that long-lasting, successful businesses have, is they are investing in their people and development. Paying salaries, insurances, bonuses, all requires extra capital that is needed to be set aside in order to grow human capital. Good people, better people. There are qualities for each role that need to be defined and a process for attracting talent needs to be invested in. This process can also include outsourcing to an external firm who specializes in these strategies. By retaining profits internally, the company is able to stretch its legs to have further reach upon the market they work in. Financially and statistically, dividends are likely to grow as well with the increase in equity due to the increase in security an investor feels with more cash reserve and liquidity within the company.

All in all, a company should not be pressured into giving out periodic payments in predetermined timeframes, in other words a dividend, to investors even when they are insisting. Rather, pitch and prove, a new method for reinvestment within the company that will raise the value of the company, through proven methods like the value chain model, to increase the equity in the company. By expanding the scope and capability, the company is allowing for a larger target market which will reap more benefits; none of it would be possible if it had continued to give out large percentages of capital to investors as dividends. Companies, and investors, should not be worried about dividends at all as a matter of fact; an increase in stock buyback, in other words reinvesting into the company, will increase the rate of dividends anyway, due to increased confidence and capital within the company.