The ambidexterity of a triad structure in consultant-involved lean projects: cases from Chinese SMEs

Abstract

The existing literature on consultancy-involved lean projects identifies two ambidextrous consultancy models, i.e. hard management consultancy and soft management consultancy. This study aims to explore how consultants leverage these two ambidextrous consultancy models, especially in a triad structure of consultants, SME owners, and managers and from an organisational ambidexterity perspective. Based on four case studies of consultancy-involved lean projects in Chinese SMEs, this study identifies two scenarios of the triad relationships of consultants, owners and managers and two rationales behind the selection of two scenarios. It further reveals two approaches adopted by consultants in these two scenarios to achieve ambidexterity. In doing so, this study extends the understanding of consulting practices in SMEs by focusing on not only the relationship between consultants and SME owners but also the relationship between consultants and managers. Through the theoretical lens of organisational ambidexterity, it further sheds new light on the dynamic nature of the consultant-client relationship by unfolding consultants’ adoption of sequential and contextual ambidexterity approaches in two identified scenarios.

Keywords:

• SMEs
• consultancy
• lean project
• ambidexterity
• a triad structure
• china

1. Introduction

Small and Medium Enterprises (SMEs) play a major role in the world’s economy, as they represent approximately 90% of global businesses and more than 50% of employment worldwide (World Bank 2022). Particularly in emerging countries, SMEs are often considered as the ‘backbone’ of their economies. For example, SMEs contribute to about 50% of national tax, 60% of Gross Domestic Product, 70% of technological innovation, 80% of employment in China (China Daily 2021). While SMEs have been recognised as important players in the marketplace, many of them are actually operating in a reactive and fire-fighting manner (McGovern, Small, and Hicks 2017). Although a number of process and improvement practices, such as lean practices, have been developed to assist them to reduce costs and enhance operational performance, many SMEs are still struggling with the adoption of lean practices due to the lack of sufficient knowledge or human resources (Antony et al. 2021). In this sense, when learning and implementing lean practices, SMEs are more likely to employ management consultants to provide training and solutions (Yadav et al. 2019).

Given the importance of the use of management consultancy services, a large number of studies have been conducted in this area, most of which focused on the consultant-client relationship (O’Mahoney and Markham 2013). The ambidextrous consultancy models, including hard management consultancy and soft management consultancy, have been identified in the existing consultancy-involved lean literature (Holmemo, Rolfsen, and Ingvaldsen 2018). The hard management consultancy model positions consultants as the external people who diagnose problems and provide solutions to their client organisations. In comparison, the soft management consultancy model suggests that consultants and clients are interdependent with each other, as they need to work jointly during the problem diagnosis and solving process. However, it is still unclear when and how to adopt these ambidextrous consultancy models in lean projects and why. In addition, the existing consultancy literature often views SME owners as key clients to consultants and focuses on the relationship solely between consultants and owners. Managers who are involved in consultancy project steering teams and play an important role in lean projects are somewhat ignored by the consultancy literature (e.g. Kanda et al. 2018; Witjes, Vermeulen, and Cramer 2017). The possible reasons may be threefold. The first reason relates to the complexity of the term ‘client’ in the consultancy project. At a macro level, the client is considered as the one who actually pays the consulting fees (Alvesson, Bridgman, and Willmott 2009). However, at a more micro level, Schein (1997) points out that there are six types of clients in a consultancy project, including contact clients (i.e. people who first contact the consultants), intermediate clients (i.e. people who are involved in different activities during the project), primary clients (i.e. people who own the problems), unwitting clients (i.e. people who will be affected but may not know they will be affected by the consultancy project), indirect clients (i.e. people who are unknown to the consultants), and ultimate clients (i.e. the community, organisation or groups whose welfare must be considered by the consultants). In this case, it is more straightforward to investigate the client at a macro level rather than clients that are ‘hidden’ at a more micro level. This is particularly related to SMEs, as SME owners are usually the decision makers of paying consulting fees. Hence, they attract more research attentions, rather than managers. Second, as noticed by Spring and Unterhitzenberger (2022), middle managers such as operations manager have long been regarded as the one who adopts management ideas from external sources. However, they are normally viewed as implementers, passively implementing the decisions from owners. Hence, the existing literature tends to neglect their active role in consultancy projects. Third, given the commercially sensitive nature of many consultancy projects, it can be difficult for researchers to gain access to the managers who are involved in consultancy project steering teams. Addressing these gaps, this paper considers the triad structure of consultant-involved lean projects (i.e. owners, managers, and consultants) and explores how consultants can leverage the ambidextrous consultancy models in such a triad structure, in the context of consultant-involved lean projects in SMEs, aiming for better operational and project performance.

The remainder of this paper consists of five sections. Following this brief introduction, the literature in relation to the ambidexterity in consultant-involved lean projects and the triad structure of management consultancy in SMEs is reviewed in Section 2. Section 3 describes the multiple case study method employed in this research. The case results are presented and discussed in Sections 4 and 5 respectively. Section 6 concludes by elaborating theoretical contributions and managerial implications of this study, as well as reflecting its limitations.

2. Literature review

2.1. The ambidexterity in consultant-involved lean projects

In the context of consultancy-involved lean projects, two ambidextrous consultancy models (i.e. hard management consultancy and soft management consultancy) can be observed (Holmemo, Rolfsen, and Ingvaldsen 2018). The classic view usually positions the main task of a consultant as diagnosing problems and transferring standard solutions to client organisations. Holmemo, Rolfsen, and Ingvaldsen (2018) refer to this classic view as the hard management consultancy. In practice, it is not uncommon for consulting companies to position themselves as knowledge donors (Kipping and Armbrüster 2002). Indeed, many consulting companies describe their business as sending smart people to solve difficult problems encountered by their clients (Christensen, Wang, and van Bever 2013). Consultants are considered as external problem solvers, who possess decontextualised knowledge of advanced management practices (e.g. Greiner and Metzger 1983; Kubr 2002). Based on their professional judgement, consultants efficiently identify problems and provide solutions for their clients. Clients, who have not been specially trained, play a passive role in such consultancy projects, as they rely on consultants’ expertise to solve problems (Freidson 2001). Holmemo, Rolfsen, and Ingvaldsen (2018) contend hard management consultancy may contribute to the basic training of lean tools and techniques. However, it adds limited value to understanding the local contingencies of client organisations, which is critical to the implementation of lean practices (Hong and Leffakis 2017).

In comparison to the hard management consultancy, the soft management consultancy (Holmemo, Rolfsen, and Ingvaldsen 2018) emphasises the collaborative relationship between consultants and clients. It tends to be more appropriate for SMEs. In this case, consultants should be positioned as a facilitator who help their client organisations to learn. While consultants have knowledge of management practices, clients are more familiar with the contexts of their own organisations (Schein 1999). Consultants and clients are thus interdependent on each other, as they need to work collaboratively to diagnose and solve problems. Consultants should become facilitators who enable clients to have a better understanding of their own organisations (Schein 1990, 1999). McGovern, Small, and Hicks (2017) further argue that the involvement of employees in the implementation of process improvement initiatives may prevent a decoupling between the process improvement and internal practices. However, while the two consultancy models are discussed by various researchers, little has been done to explore the concept of ambidexterity within a project and even less is known about how ambidexterity can be achieved by consultants for gaining better performance of conducting lean project (Sohani and Singh 2017).

In order to develop more understandings about two ambidextrous consultancy models on the level of project, we apply organisational ambidexterity as the theoretical lens. It is argued that to succeed over a long-time period, organisations need to adapt their structural alignments to environmental and technological changes. Hence, O’Reilly and Tushman (2013) adopt the term organisational ambidexterity to describe the ability of an organisation to both exploit its existing capabilities to achieve efficiency, control, certainty and variance reduction and explore new capabilities to ensure its future viability. A large number of empirical studies show that ambidexterity is positively associated with organisational sales growth, innovation, market valuation and firm survival, as well as project performance (Ojiako et al. 2021). To achieve organisational ambidexterity, three approaches are suggested, namely sequential ambidexterity, simultaneous ambidexterity, and contextual ambidexterity (Petro et al. 2020). Sequential ambidexterity refers to adaption to environmental shifts by realigning organisational structures and processes. Simultaneous ambidexterity indicates the behavioural capacity to simultaneously demonstrate alignment and adaptability across an entire business unit. Contextual ambidexterity highlights the ability to balance exploration and exploitation in an organisational context (O’Reilly and Tushman 2013). Although each of three approaches was initially proposed as separate ways to deal with the need for exploitation and exploration, the evidence clearly suggests that firms are likely to achieve ambidexterity through a combination of three approaches. Successful firms might initiate exploration and exploitation via one approach but switch to others over time (Jansen, Andriopoulous, and Tushman 2013). The different ways of achieving ambidexterity may be more or less useful contingent on environment (O’Reilly and Tushman 2013). We will use these three approaches to guide our discussions and seek for when to use what approach in the context of consultancy-involved lean projects.

2.2. The triad structure in the consultancy-involved SME project

An expert service, such as management consulting, plays an important role in helping SMEs gain access to the new knowledge of advanced business practices, such as lean practices (Klewitz, Zeyen, and Hansen 2012). For example, SME owners hire consultants to educate and train their employees (McAdam et al. 2014). Consultants also advise on, or are involved in, the implementation of lean practices in SMEs (Heras-Saizarbitoria and Boiral 2015).

Given the centralised decision structure in SMEs, the relationship between consultants and owners is often viewed as the core of the consultant-client relationship in SMEs. It is found that top management commitment is crucial to the adoption of lean practices in SMEs (Panizzolo et al. 2012). While the importance of SME owners has been recognised in the consultant-client relationship in SMEs, it is argued that providing consulting services to SME owners can be a challenging process. SME owners are more likely to be circumspect with regards to consultants’ advice due to their strong belief in the uniqueness of their own business. Instead of using formal and written forms of communication (which are usually adopted by consultants), they prefer to communicate with employees orally and informally (Dalley and Hamilton 2000). Hence, it may be challenging for consultants to make sense of their SME-client organisations within a short period of time (Mole 2007). Besides, SME owners also concentrate on learning by experience and dealing with practical problems they encounter rather than learning theoretical knowledge (Dalley and Hamilton 2000; Gibb 1997). Thus, consultants who have little experience of applying these improvement practices in SMEs often find it difficult to interpret the new knowledge in an accessible way and adapt to their client’s specific business needs (Kanda et al. 2018; McAdam et al. 2014). In this sense, consultants need to build a good relationship, based on confidence and expertise, with SME owners from the outset of the projects (Chen et al. 2008). It is insufficient for them to simply construct a project plan when advising their SME clients (Soriano et al. 2002). SME owners and consultants also need to develop mutual collaborations and co-produce solutions to foster a more innovative learning process in consultancy projects (Christensen and Klyver 2006; Soriano et al. 2002).

While SME owners are often viewed as the key client to the consultants, it is argued that inputs from managers also needs to be considered during the consultancy project (Sturdy et al. 2009). This is particularly important for lean projects in SMEs. On the one hand, the implementation of lean practices includes changes at both shopfloor and company levels (Zanon, Ulhoa, and Esposto 2021), implying that managers such as general managers and production managers may need to be involved in the implementation of lean projects. On the other hand, since the organisational structures of SMEs are more centralised with fewer management layers than large enterprises, it is more likely for consultants to directly communicate with managers. In other words, the potential clients in the management consultancy projects should be understood as not only owners but also managers who are directly involved in project decision making. Although the previous research has examined the relationship between owners and consultants in the context of lean projects, there has been limited focus on the relationship between managers and consultants. Hence, this paper aims to address the triad structure of consultant-involved lean projects including owners, managers, and consultants and explore how and when consultants can leverage the ambidextrous consultancy models in such a triad structure for better operational and project performance. Specifically, operational performance stands for the improvements of product quality, production costs and on-time delivery rate for the SME, and project performance stands for the completion of the project on time for the consultants. Taking all above into consideration, the research question is accordingly formulated as from the lens of organisational ambidexterity, how can consultants leverage the ambidexterity in a triad structure of owners, managers, and consultants, in the context of consultant-involved lean projects in SMEs aiming for better operational and project performance?

3. Methodology

3.1. The selection of the case study method

A multiple-case study method was selected for this study due to following reasons. First, it is suggested that case studies are most suitable for investigating ‘how’, ‘why’ and ‘what’ questions (Yin 2018). Hence, case study is considered as appropriate, given the nature of the research question of this study. Second, case study research is also suitable for addressing an under-developed topic (Eisenhardt 1989; Stuart et al. 2002). As previously noted, only a few studies directly focus on the triad structure among consultants, owners, and managers in lean projects. Hence, this study adopted an inductive approach to carry out the multiple case study and to facilitate a greater understanding of the subjects in an exploratory manner. Third, in comparison to a single case study, the evidence from a multiple-case study can be more robust and compelling. Although the results from the multiple-case study cannot be widely generalised, they can be generalisable to theory based on the examination of an extensive body of evidence (Yin 2018).

3.2. Sampling

Purposive sampling, which allows researchers to select cases with a feature of interest and to critically consider the parameters of the population (Miles, Huberman, and Saldana 2013), was adopted for this study. The basic unit of analysis was consultant-involved lean project undertaken in Chinese SMEs. The reasons for choosing China as the research context are threefold. First, SMEs contribute to 90% of total business enterprises in China which is the second largest economy in the world. Second, in China, companies that have less than 1000 employees are defined as SMEs. Such a definition provides us with more opportunities to examine the triad structure of consultants, SME owners and managers, as it is more likely for the owners of these companies to appoint other managers. Third, undertaking case studies in Chinese SMEs can avoid cultural differences among different nations. In addition, to minimise the influences of internal operations and external environment that may lead to performance differences, other factors were controlled, including employees lean skills available, project budget, motivation to conduct lean projects, and number of core products and processes (see Table 1). Finally, more selection criteria were also developed to ensure that the research aim could be achieved, including:

1. The consultancy projects were advanced in the lean projects, as this could ensure the better availability of project materials;

2. The roles played by the consultants in the projects demonstrated discernible differences to enable researchers investigating different relationship models;

3. The SME-client organisations were willing to allow researchers access to their managers and employees;

4. The performance of the projects should show some differences in order to observe the impact of the consultants’ roles on the implementation of lean projects.

Table 1. An overview of the Chinese SME-client organisation in each case.

	Case 1	Case 2	Case 3	Case 4
The SME-client	Autoparts Ltd.	Textile Ltd.	Glass Ltd.	Fasteners Ltd.
Ownership	Private	Private	Private	Private
Sector of activity	Automotive manufacturing	Textile manufacturing	Glass manufacturing	Machinery manufacturing
Main markets	China and Japan	China	China	U.S.A
Number of core products	6	4	4	5
Number of core processes	21	16	19	18
Motivation to conduct lean project	Main customer’s requirement to improve product quality, employees’ work safety and reduce production costs	Main customer’s requirement to improve product quality and delivery	Main customer’s requirement to improve product quality and reduce production costs	Main customer’s requirement to satisfy key customer’s requirement of improving shop floor management
Employees lean skills available	Only the mangers have basic training of 5S housekeeping	The managers and employees have no formal training of lean practices	The managers and employees have no formal training of lean practices	The managers and employees have no formal training of lean practices
Implementation resources available	150,000RMB project budget	165,000RMB project budget	140,000RMB project budget	150,000RMB project budget
Key improvement tasks included in the project	5S^a housekeeping and work safety Equipment maintenance Standard work Visual management^b		5S^a housekeeping and work safety Standard work Visual management^b
Personnel involved in the project steering team	Two consultants^c, the general manager, two deputy general managers and operations manager	The senior consultant, two deputy general managers and production manager	The senior consultant, the general manager, one deputy general manager	Two consultants, one deputy general manager, the production manager
Project performance	Most project tasks were delayed at the early stage, but the completion of project tasks was improved at the mid-to-late stage	The project went on well and was expected to be completed on time	The project went on well and was expected to be completed on time	Some project tasks were delayed at the early stage, but most tasks were expected to be completed on time
Improvements of operational performance	The operational performance was not improved at the early stage. But the product quality rate was improved from 92.2% to 96.7% and employees’ work safety rate was improved from 90.1% to 95.5% by the end^d	The product quality rate was improved from 90.4% to 97.7% and on-time delivery rate was improved from 84.5% to 95.6%^d	The product quality rate was improved from 89.7% to 96% and production cost was reduced from around 37 RMB per square metre to around 35 RMB per square metre^d	The performance of shop-floor management was not improved at the early stage. But the order fulfilment rate was improved from 90.5% to 95.4% and product quality rate was improved from 91% to 96% by the end^d

Notes: ^a5S is a specific tool used for improving the organisation of the workplace and the five “Ss” refer to Sort, Stabilise, Shine, Standardise and Sustain. ^bVisual management is the visualisation of the production system (e.g. activities, performance indicators) to ensure employees understand system status at a glance. ^cThe consultants involved in Cases 1 and 4 and the consultants involved in Cases 2 and 3 are not the same. ^dDuring the follow-on interviews, all these improvements have been recognised as significant improvements in their organisations by the interviewees.

However, as noted by Sturdy (2012), the commercially and politically sensitive nature of many consultancy projects actually inhibits researchers in their access to consultants and their clients as well as project materials. Hence, Sturdy (2012) suggests that developing a good relationship with case organisations can be helpful in terms of negotiating the access to the consultancy projects. In this study, one of the researchers had a good relationship with senior managers in AB consulting company (the pseudonyms are used for study participants and organisations to protect anonymity). The company has a good reputation in the consulting industry in the eastern part of China and it is recognised as one of the ‘most influential consulting companies in China’. It offers a range of services, such as strategic management, human resource management, marketing planning and, most recently, lean practices, to the client organisations (90% of them are manufacturing SMEs). It has 53 full-time consultants and 169 part-time consultants, among which seven are Certified Management Consultant (CMC), ten are senior engineers, and fifteen are senior consultants. The consultants in AB consulting company have all passed the professional qualification examinations, which include management consulting methods and practices. The good reputation of AB consulting company helped the researcher to gain access to its client organisations. In addition, the diverse background of the consultants in AB consulting company provided more opportunities to investigate their different roles in lean projects.

With the support from AB consulting company, invitation letters were sent to its SME-client organisations and six manufacturing SMEs expressed their interest to participate in the study. By applying the case selection criteria, four cases were further chosen for this study. The details of each case and the corresponding Chinese SME-client organisations are shown in Table 1.

3.3. Data collection

Semi-structured, face-to-face interviews were conducted with the consultants involved in the projects between Oct 2018 and June 2019. The owners, senior (e.g. general and deputy general managers) and middle managers (e.g. operations/production manager, quality manager, warehouse manager, workshop directors or equivalent), as well as front-line employees (e.g. supervisors and operators), from the Chinese SME-client organisations were also interviewed (see Table 2). The participants were assured of the confidentiality of their responses before the interviews and were clearly informed that they held the right to refuse to answer any questions or could withdraw from the study at any time. The durations of interviews were usually between fifty and ninety minutes. Additional interviews were also conducted between March 2023 and June 2023 (as all the projects have been completed during this time), where some follow-on questions about the project performance and the factors that may influence the project performance were asked. All the interviews were conducted in Chinese and transcribed by one of the researchers and reviewed by the participants. The transcribed interviews were then translated and cross-checked by the researchers (two of our researchers can speak both Chinese and English fluently).

Table 2. The number of interviewees in each case.

Interviewees involved in the original interviews	Case 1	Case 2	Case 3	Case 4
Consultants	2	1	1	2
Owners	1	1	1	1
Managers (e.g. general manager, deputy general manager, production manager, workshop director)	8	7	7	7
Interviewees involved in the additional interviews	Case 1	Case 2	Case 3	Case 4
Consultants	2	1	1	1
Owners	1	1	1	1
Managers (deputy general manager, production manager and operations manager)	2	1	2	1

Data were also collected through direct, non-participant observations of the consultancy project steering team meetings and training courses held in each Chinese SME-client organisation. The durations of the observations were normally between one and one and a half hours. Documents in relation to the consultancy projects were gathered to validate the interviews and observational data, including project plans, consultant presentation materials, project progress reports, implementation guidelines of the consultancy projects, training materials, and new rules and procedures issued by the project steering teams.

3.4. Data analysis

Template coding was used in the analysis (King 2012), which involved using a list of codes (i.e. template) to represent themes identified from the literature, such as two ambidextrous consultancy models, three approaches to achieve organisational ambidexterity, the relationship between consultants and owner and the relationship between consultants and managers. Template analysis also enabled the researchers modifying pre-developed codes and adding codes that emerged from the empirical data into the initial template. For example, two scenarios of the relationship between consultants and owners have been commonly mentioned by the interviewed owners and consultants. Thus, two codes named ‘consultant as external expert’ and ‘consultant as senior manager’ were respectively added into the initial code list. The final codes were checked and agreed by the researchers. To enhance the efficiency of coding, categorising, displaying and retrieving data, the qualitative data analysis software NVivo12 was applied.

Since four selected cases could be categorised into two identified scenarios (i.e. ‘consultant as external expert’ and ‘consultant as senior manager’), cross-case analysis was further employed to compare and contrast the similarities and differences of ambidexterity among consultants and owners, managers in two identified scenarios. To improve the efficiency of cross-case analysis, group meetings were held among the researchers. The researchers also presented the case findings to the consultants, the SME owners and the managers, who were involved in this study. Their feedbacks facilitated the researchers to enhance the robustness of the multiple case study.

3.5. Reliability and validity

To ensure the overall quality of this case study, the following strategies were employed. First, a case study protocol, including research aims, case selection criteria, data collection and analysis methods, and interview guidelines, was developed and agreed among all the researchers. The use of the case study protocol enhanced the reliability (Yin 2018) of this study. Second, the external validity was ensured by using replication logic (Yin 2018). In this study, theoretical replication logic was applied, since the selected cases differed in terms of consultants’ roles in decision-making (during the implementation stage) and their knowledge base of the Chinese SME-client organisations: in Cases 1 and 4 the consultant adopted only an advisory role in making decisions while in Cases 2 and 3 the consultants were able to take up a more decisive role with their clients. Third, multiple sourcing and the use of cross-checking in data collection and analysis by different researchers were all deployed to establish a chain of evidence. These tactics improved the construct validity of this study. Finally, the internal validity was achieved through pattern matching in the interpretation and explanation of the results. Moreover, the preliminary results from this study were presented to practitioners and academics at international conferences. Their feedbacks helped the researchers to finalise the results and further enhanced the internal validity of this study.

4. Results

4.1. Different scenarios of the triad relationship among consultants, owners, and managers

According to the case analysis, it was possible to identify two scenarios of the triad relationship among consultants, owners, and managers, namely ‘consultant as external expert’ (Cases 1 and 4) and ‘consultant as senior manager’ (Cases 2 and 3).

In Cases 1 and 4, the consultants were positioned as external experts in the project steering teams (see Figure 1). During the interviews, the owners in these two cases commonly mentioned that they expected the consultants to find out the problems of their operations and provide solutions (such as lean project implementation guidelines, key tasks, training plans) for improving the status quo. The owners in these two cases acted as the ‘big boss’ (the term adopted by the consultant in Case 1), as they kept tight control of the overall project progress and activities related to financial management (i.e. paying the consulting fees and other associated costs) and human resource management (i.e. the change of management teams during the project). During the interviews, the consultants mentioned that they were required to submit the progress reports to the owners monthly to update their work. The owners decided whether the progress reports could be approved and whether the rest of the consulting fees should be fully paid. Managers involved in the project steering teams discussed the lean project implementation guidelines and plans proposed by the consultants and provided their comments to facilitate the consultants revising and re-submitting the materials. The general manager (in Case 1) or deputy general manager (in Case 4) decided whether the consultants’ proposals and suggestions could be adopted.

Figure 1. The ‘consultant as external expert’ triad relationship in Cases 1 and 4.

In Cases 2 and 3, the consultants were positioned as senior managers in the project steering teams (see Figure 2). They were responsible for not only developing lean project related guidelines, plans and key tasks, but also making decisions on the adoption of these guidelines and rules for carrying out the key tasks. During the projects, the managers involved in the project steering teams acted as the ‘internal advisor’ (the term adopted by the consultant in Case 2). The consultants discussed project guidelines and plans with other senior and middle managers, who could provide feedback and suggestions to them for further revising the plans and guidelines. The consultants in these two cases decided whether the feedback could be integrated into the developed guidelines and whom the tasks should be assigned to.

Figure 2. The ‘consultant as senior manager’ triad relationship in Cases 2 and 3.

4.2. The ambidexterity among consultants, owners, and managers

As external experts, the consultants in Cases 1 and 4 proposed the implementation guidelines, training activities, and changes to existing management rules and teams at the beginning of the lean projects. However, they argued that it took them more time to wait for the approval of project financial expenditure and human resources changes from the owners after submitting lean project progress reports (e.g. even buying an Internet cable should be approved by the owners during the projects). The consultant in Case 1 contended that he worked in a very stressful environment, as the lean project tasks may be delayed if he could not get the approvals as quickly as possible. In addition, the consulting companies also expected to receive the rest of the consulting fees on time. To ensure the approvals could be gained, the consultants in these two cases actively negotiated with the owners by providing solid evidence to show the progress of lean projects. The consultant in Case 1 mentioned that the evidence should be objective: for example, figures related to the improvements of operational performance and pictures that could show the changes on the shop floor. The consultant in Case 4 stressed that the presentation of the evidence was a kind of art. He argued it was important to impress the owner by showing visible improvements in the organisation and highlighting how challenging the work was as well as the efforts they made to deal with these challenges. The interviews with the owners in these two cases showed that they would like to see substantial evidence to summarise how the projects were going. The owner in Case 4 mentioned that it was useful for the consultant to provide objective evidence particularly when the project progress needed to be adjusted.

The consultants in Cases 1 and 4 were also expected to deliver training courses on lean practices during the lean projects. However, they lacked a sufficient knowledge base of their client organisations’ contexts, which made them struggle to translate knowledge of lean into accessible and practical techniques in a short term. As the consultants in these two cases were unable to deliver quick solutions to their clients, the managers in the project steering teams started to complain and even question the consultants. The deputy general manager in Case 4 complained that the procedures of work safety proposed by the consultant were still too broad. He then asked the consultant to ‘dive deeply into the workshops and check with the workshop directors’. The general manager in Case 1 also mentioned that he felt disappointed, as the project guidelines and procedures delivered by the consultant were not practical and applicable. To bridge the knowledge gaps, the consultants made significant efforts to proactively and deeply involve middle managers and experienced employees in designing the project plans, training materials and solution development through cultivating guanxi connections (the term commonly adopted by the consultant in Case 1 which means personal relationship) with them. The consultants usually invited middle managers (e.g. production/warehouse managers, workshop directors) and supervisors to attend informal discussion sessions. They also actively chatted with middle managers during breaks, mealtime or other spare time. The consultants believed that these guanxi-building activities helped to provide valuable insights of their clients’ daily operations.

Usually, I walk around the shop floor in the morning and say hello to or chat with our workers and workshop directors. I also have lunch with our middle managers, and we can chat freely during lunch. I think it is very useful to build good guanxi connections with them, as they are more likely to tell me the details of their operations and how they think when they feel they know me better. (The senior consultant, Case 1)

Meanwhile, from the perspectives of the involved managers, these ‘guanxi-building activities’ enabled them connecting with the consultants and raised their awareness of why they should use lean practices and how this could be done.

He (i.e., the consultant) is very nice and friendly and he talks a lot about the details of the project when he comes to my workshop. This makes me better understand why some practices should be done first and others should be in the next stage. We also have more specific discussions about how to apply these improvement practices in my workshop. (The workshop director, Case 1)

The consultants in both cases also attempted to use context-specific evidence to enhance the legitimacy of their advice. They attempted to stress their proposals were ‘practical’ and ‘had a direct and explicit connection to daily operations’, which would make the key decision-makers more likely to accept their proposals. For example, the consultants in both cases supplied the summaries of discussion meetings with middle managers and employees in their proposed implementation guidelines to demonstrate that their advices were grounded from the practice. Photos, taken from past projects (related to their clients’ contexts), were also adopted in their training materials to help visualising and evidencing the potential benefits of using certain lean practices. The use of these context-specific evidence assisted the consultants in effectively managing managers’ impression of the quality of their advice and reducing time spent on revisions.

It is good to see the guidelines and advice given by him (i.e., the consultant) were developed based on our industrial standards and the status quo of our company. It ensures that the advice fits our company. (The owner, Case 1)

The fundamental question is where these advice and project guidelines come from. Do they just come from our wishful thinking or from real evidence? Obviously, I need to ensure that they are evidence-based and relevant to our companies. Otherwise, I cannot accept or agree them. (The owner, Case 4)

During the additional interviews conducted in 2023, it was further agreed by the owners and managers in Cases 1 and 4 that the consultants played a crucial role in improving the project and operational performance. For example, both owners in Cases 1 and 4 reflected that the project progress was much faster and the operational performance was significantly improved in the later-to-end stage, as the consultants were more capable to get into the point of the problems and provide context-specific solutions, instead of just listing a number of lean practices from other industries. Similarly, the operations manager in Case 1 and the production manager in Case 4 commonly found that it was more efficient to communicate with the consultants in the later stage of their lean projects as the consultants developed the common language with them. From the consultants’ point of view, the senior consultants in both Cases 1 and 4 mentioned that they could have more influence on the development of lean implementation solutions, such as 5S house-keeping and visual management in the later stage of the project, as they knew more details about the client’s operational context through guanxi-building activities.

In contrast to the consultants in Cases 1 and 4, the consultants in Cases 2 and 3 played a decisive role in the project steering teams. The consultants commonly agreed that the owners empowered them to directly make project decisions. The owners in these two cases trusted the consultants and empowered them to make decisions for three reasons. First, the consultants in both cases possessed work experience of more than ten years in their clients’ industries and, therefore, both had a good understanding of the operational details in their clients’ organisations, e.g. the operational processes, the techniques and equipment adopted in their clients’ organisations. Second, the owners had known the consultants for more than five years. During these years, they kept communicating the problems and updating information in their operations with the consultants and the consultants sometimes provided their ideas to deal with these problems or supplied some relevant learning materials to the owners without charging any consulting fees. In Case 2, the owner described his relationship with the consultant as ‘both friend and teacher’. Third, the owners in both cases accumulated their knowledge of consultancy practices by attending meetings and conferences organised by trade associations, local government, and research institutes. These meetings and conferences helped the owners to make sense of ‘what the consultants can do’, thus making them feel more confident about how to choose the right consultants and identify the roles of consultants in the projects. As a result of being given more authority and accessibility, the consultants felt that the project decision-making process was generally ‘fast and straightforward’. Such a new role also aided the consultants to track the projects’ progress and allowed them to receive immediate feedback from middle managers and other employees.

In most cases, I give them (i.e., managers in the project steering team) a brief summary of why I propose and decide certain procedures or rules during the meeting. If most of them do not object to my decisions, we would directly issue and implement these procedures or rules. (The consultant, Case 2)

The managers believed that the consultants possessed substantial contextual knowledge, as well as more advanced knowledge of lean practices. They generally felt the consultants should tell them what areas should be improved and they used to follow the commands from the consultants about how to carry out the lean projects.

I adjust my perspectives and follow the consultant’s decisions because he knows more about our industry and is more professional and experienced in applying these improvement practices. (The deputy general manager, Case 2)

We do not know much about 5S or visual management. The consultant is our laoshi (i.e., teacher in Chinese) and he is the expert in terms of doing 5S etc. We should show our respect to laoshi and follow laoshi’s guidance on what to do and how to do. (The deputy general manager, Case 3)

Although the consultants in Cases 2 and 3 had previously developed a strong understanding of their clients’ context, it was still necessary to involve managers in developing project guidelines and plans, due to the SMEs’ limited availability of company documents and their informal operations management. Similar to Cases 1 and 4, guanxi-building activities were adopted by the consultants in Cases 2 and 3. For example, the consultant in Case 3 organised some informal discussion sessions with middle managers and provided snacks and beverage to create a pleasant and relaxed atmosphere. The involved managers, such as workshop directors, warehouse managers, production manager, could express their opinions openly. The involved managers believed that the discussions they had with the consultants triggered them to reflect on their traditional ways of working.

During the additional interviews conducted in 2023, the owners in both Cases 2 and 3 believed that the consultants played a determinant role in achieving the improvements of their lean projects. For example, the owner in Case 2 pointed out that the consultant was very professional and able to make the appropriate project-decisions which ‘kept the lean project heading to the right orientation’. The owner in Case 3 mentioned that it was impossible to achieve such an efficient performance improvement without the consultant’s professional and resolute decisions. The interviewed managers in both cases agreed that with the consultants’ guidance they were able to apply lean practices for improving the shop floor effectively. As mentioned by the deputy general manager in Case 2, the consultant ‘brought a breath of fresh air that could allow them to actively think about problems and potential solutions of their operations management, rather than just repeating daily work’. The consultants in both cases believed that their prior knowledge of the clients and good relationship with the owners and managers helped them make the right project decisions and improve the project performance efficiently.

5. Discussions

This study identified two scenarios of triad relationship among the owner, managers and the consultants namely ‘consultant as external expert’ and ‘consultant as senior manager’. It is also found that the consultants’ contextual knowledge and their relationship with the owner are the two key factors that influence the selection of these two scenarios. In Cases 2 and 3, the consultants possessed sufficient contextual knowledge of their client organisations, such as the operational details and technological processes of their client organisations. In addition, they also had a long-term guanxi connection with the owners. For example, in Case 2 the relationship between the owner and the consultant could be described as ‘both friend and laoshi’. In this sense, the owners were more likely to give authority to the consultant to make project-related decisions and access to the internal management information. Managers involved in the project steering teams in both cases intended to play a relatively passive role in lean projects and rely heavily on more senior and experienced consultants to provide advice and even make decisions. In this sense, the consultants’ sufficient contextual knowledge and their good relationship with the owners again enabled the development of ‘consultant as senior manager’ triad relationship in Cases 2 and 3.

However, in Cases 1 and 4, the consultants had experience of applying lean practices but had no prior contextual knowledge of their client organisations. In comparison to the consultants in Cases 2 and 3, the consultants and the owners in both cases had no guanxi connections before and this meant they lacked a trustful relationship with each other. Hence, the owners and managers in both cases viewed the consultants as professionals who were just external to their organisations and gave them limited authority to make project decisions and limited accessibility to the internal operational processes. In this sense, it was indicated that the consultants’ limited contextual knowledge and their poor relationship with the owners led to the selection of ‘consultant as external advisor’ triad relationship in Cases 1 and 4. Based on the findings and discussions elaborated above, the first proposition can be formulated as:

Proposition 1: The consultants’ contextual knowledge base and their relationship with the SME owners are the two main factors that influence the SME owners’ decision on giving the authority to the consultants during the projects, and this further results in the selection and development of different triad relationships among owner, managers and consultants.

Our study showed that different approaches to achieve ambidexterity were adopted by the consultants according to diverse scenarios of triad relationships among the owner, managers and consultants. In the scenario of ‘consultant as external expert’ triad relationship, the sequential ambidexterity approach (O’Reilly and Tushman 2013) was adopted by the consultants. From the perspective of SME owners and managers, as the findings from Cases 1 and 4 indicated, they expected the consultants to adopt the hard management consultancy model at the beginning of lean projects. However, from the perspective of the consultants, they lacked sufficient contextual knowledge to carry out the hard management consultancy model. Particularly in the SME context where the operational processes were informal (in many cases, undocumented), the consultants were unable to gain a quick and precise understanding of their client contexts. In order to accumulate the contextual knowledge, the consultants moved to the soft management consultancy model, when communicating with the managers during the lean projects. For example, instead of acting as the expert who delivered solutions, the consultants intended to work more jointly with the managers through building guanxi connections during the lean projects. The interactive nature of the guanxi-building activities offered a two-way benefit: improving consultants’ contextual knowledge and raising managers’ awareness of lean practices. It also prevented the decoupling between the internal operational processes of SMEs and the introduction of lean practices (McGovern, Small, and Hicks 2017). As their contextual knowledge base was increased by implementing these guanxi-building activities, the consultants were able to turn back to the hard management consultancy model which they were expected to adopt. In both Cases 1 and 4, it is found that the contextual knowledge helped the consultants to better use impression management to convince the owners and managers. For example, more context-specific project proposals were developed, which provided the consultants in Cases 1 and 4 with both rhetoric and tangible evidence (Nikolova and Devinney 2012) to convince the owners and managers and legitimise their proposals (Kipping 2011). This further helped the consultants to enhance their expert image and assist the adoption of hard management consultancy model. Hence, in the scenario of ‘consultant as external expert’ triad relationship, it is suggested that the sequential ambidexterity approach which follows the sequence of ‘hard-soft-hard’ management consultancy models is needed. However, consultants’ adoption of the sequence of ‘hard-soft-hard’ management consultancy models could be time-consuming and costly. As the project performance in Table 1 showed, the completion time of lean project tasks were delayed in both Cases 1 and 4 and the operational performance such as product quality rate, production cost and order fulfilment rate were not improved as expected at the early implementation stage, but they were gradually improved by the end of the project after the consultants went through ‘hard-soft-hard’ exercise.

In the scenario of ‘consultant as senior manager’ triad relationship, the contextual ambidexterity approach was adopted by the consultants. In Cases 2 and 3, although the consultants were positioned as the senior managers who should propose and decide the plans and guidelines of implementing lean projects, it was observed that the consultants were able to balance the use of hard management consultancy model and soft management consultancy model based on organisational context (Holmemo, Rolfsen, and Ingvaldsen 2018). From the perspective of SME owners and managers, the owners’ long-term guanxi connections with the consultants enhanced the adoption of hard management consultancy model. From the perspective of the consultants, their sufficient contextual knowledge enabled them to adopt the hard management consultancy model as the overarching model. In addition, instead of solely adopting hard management consultancy model, the findings from Cases 2 and 3 suggested that the consultants also embedded soft management consultancy model in this overarching hard management consultancy model, when they would like to keep up-to-date understanding of their client organisations. For instance, in Case 3, the consultant built a relaxed environment that encouraged managers to share knowledge, exchange ideas, and provide feedbacks. It in turn facilitated managers to better adapt to lean practices, as they collaborated in creating lean project plans and guidelines. Hence, in the scenario of ‘consultant as senior manager’ triad relationship, it is suggested that the consultants are more capable to adopt the contextual ambidexterity approach, which allows them to employ an overarching hard management consultancy model and flexibly embedded soft management consultancy model. Accordingly, as shown in Table 1, the project performance in Cases 2 and 3 was better than that in Cases 1 and 4, especially at the beginning of the projects and the operational performance such as product quality rate, production cost and on-time delivery rate in both cases was significantly improved. Based on the findings and discussions elaborated above, the second proposition can be formulated as:

Proposition 2: Both project performance and operational performance can be improved when consultants choose an appropriate approach regarding ambidexterity in different triad relationships. More specifically, in the ‘consultant as senior manager’ triad relationship, the consultants are more capable of adopting the contextual ambidexterity approach, which can improve both project and operational performance. In the ‘consultant as external expert’ triad relationship, the consultants are more capable of adopting the sequential ambidexterity approach (hard-soft-hard), which can gradually improve both project and operational performance.

However, this study showed that the simultaneous ambidexterity approach was not adopted by the consultants. The reasons may be twofold. The first reason related to the number of consultants involved in the lean projects. As there were only one or two consultants employed by each case, it may thus be difficult for just one consultant to simultaneously adopt two entirely different consultancy models. The second reason linked to the limited resources possessed by SMEs. In all four cases, only a few managers were involved in the project steering teams, due to the limited human resources possessed by the SMEs. In this sense, it may be not possible for a small project steering team to support the adoption of two consultancy models at the same time.

6. Conclusions

This study explores how consultants leverage the ambidextrous (hard and soft) consultancy models in the context of a triad structure of consultants, SME owners and managers. The study has identified two scenarios of triad relationship among consultants, SME owners and managers, namely ‘consultant as external expert’ and ‘consultant as senior manager’, as well as the rationales behind. It has also identified two approaches adopted by the consultants in two scenarios to achieve ambidexterity in the consultancy-involved lean projects.

Accordingly, the contributions of this study are threefold. First, it extends the understanding of consulting practices in SMEs by focusing on not only the relationship between consultants and SME owners (who are often considered as the key clients to the consultants in the existing literature) but also the triad relationship among consultants, owners and managers (who are actually involved in and affected by the consultancy projects). Second, it also deepens the understanding of the selection and development of different scenarios of the triad relationship among consultants, owners and managers by identifying consultants’ contextual knowledge base and their relationships with SME owners as the main influential factors. Third, through the theoretical lens of organisational ambidexterity, it sheds new light on the dynamic nature of the consultant-client relationship by unfolding the consultants’ adoption of sequential ambidexterity approach and contextual ambidexterity approach in two scenarios related to their contextual knowledge base and relationships with SME owners. In doing so, this study also contributes to the lens of organisational ambidexterity by developing more understandings about when to choose what approaches for achieving ambidexterity in the context of consultancy-involved lean projects.

This study has practical implications for SME owners and managers and consulting companies. For SME owners, given the important role of consultants’ context-specific knowledge of their SME-clients in adopting appropriate ambidexterity approaches, the contextual knowledge base possessed by consultants becomes a critical criterion when selecting consultants. This study also suggests that they should critically consider the roles of consultants (particularly what the consultants cannot do) at the very early stage of their lean projects, since the dynamic nature of the consultant-client relationship in SMEs inhibits a straight-forward adoption of either ‘hard’ or ‘soft’ management consultancy models. In addition, SME owners should also give consultants appropriate authority of decision making as well as accessibility to daily operations during projects, based on the consultants’ capabilities and their guanxi connections. For SME managers, this study shows that they should be more proactively involved in the projects, rather than passively awaiting the advice from consultants, in order to achieve better project and operational performance. They are also recommended to assess their organisational readiness to change before embarking on their lean journey, for example, organisational commitment to change and functional knowledge to implement change. For consultants working with SMEs, they are suggested to attend training programmes that can prepare themselves with knowledge of challenges and best practices of advising SMEs. They should also embed themselves deeply into their clients’ contexts by proactively cultivating guanxi connections with different management layers in SMEs during the projects. Moreover, given the complexity of conducting lean projects in SMEs, it is also critical for consultants to build long-term relationships with owners to understand the needs of the SME community, such as the main difficulties faced by SMEs. Such understanding is also helpful for consultants when they want to obtain support from consulting companies. In fact, consulting companies should also consider the skill mix of consultancy teams, when allocating consultants to projects. They can map the contextual knowledge bases and guanxi connections of, especially senior consultants and pair them with junior consultants, in order to make project implementation benefit from these knowledge bases and connections.

There are several limitations with this type of qualitative exploratory multi-case study research. This study chose Chinese SMEs as the research context which may not reflect consulting practices in other countries such as EU countries where the SMEs are defined as enterprises with less than 250 employees. Additionally, this study focused on lean projects - only one branch of activities consultants can be involved in the implementation of certain management practices. These limitations open avenues for future research, which can seek further generalisation of the dynamic and contingent relationship between consultants and their clients by conducting more comparative case studies or even surveys in different client contexts such as EU SMEs and in different consultant activity settings. Besides, the further development of understanding through longitudinal case studies would also be a valuable area of future research. Last but not least, as the consultants in AB consulting company have all passed the professional qualification examinations in terms of management consulting methods and practices, this study tended to assume that they all possess skill sets to carry out projects. Nevertheless, more research will be needed to understand the influence of consultant expertise in implementing consultancy-involved projects.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This research is supported by the National Social Science Fund of China (23BGL037).

Notes on contributors

Qing Hu

Qing Hu is an Associate Professor at Zhejiang Institute of Administration, China. Prior to this, she was a lecturer at School of Business Administration, Zhejiang University of Finance and Economics, China. Qing obtained her PhD at Cardiff Business School. Her doctoral research focuses on SMEs participating in consultant-led Lean implementation programmes in China. She holds a master’s degree in Logistics and Operations Management, also from Cardiff University, and a bachelor’s degree in Business Administration from Zhejiang Gongshang University, China. Her current research interests lie in the areas of digital transformation and lean implementation within SMEs.

Yang Cheng

Yang Cheng is an associate professor at Department of Materials and Production, Aalborg University, Denmark and a visiting professor at School of Business Administration, Jiangxi University of Finance and Economics, China and Babes-Bolyai University, Cluj-Napoca, Romania. He has an extensive research experience in global manufacturing/operations network, supply chain management, and technology management. In these fields, he has published more than 80 articles in academic journals, e.g. International Journal of Operations & Production Management, Supply Chain Management: An International Journal, International Journal of Production Research, International Journal of Production Economics; Production Planning and Control. Meanwhile, he is the Associate Editor for Production Planning and Control and Supply Chain Analytics, the editorial board member for International Journal of Operations & Production Management, Journal of Manufacturing Technology Management, Industrial Management & Data Systems, and Journal of Digital Economy, and the guest editor for International Journal of Production Research, Annal of Operations Research, and International Journal of Physical Distribution and Logistics Management.

Robert Mason

Robert Mason is a Professor of Logistics at Cardiff Business School. His research focuses on a wide range of topics relating to logistics and optimisation of supply chain system processes. He has published over 100 papers and co-authored three books, including The Lean Supply Chain (First Edition), which was awarded the Les Plumes des Achats – Prix des Associations (Paris – 2016) prize. As well as lecturing he supervises several PhD and dissertation students. He has held several leadership roles including being on the School’s Management Board as Head of the Logistics and Operations Management section from 2019 to 2023.

Sharon Williams

Sharon Williams is a Professor with the School of Health and Social Care, Swansea University where she leads the Swansea Centre for Improvement and Innovation in Health and Social Care. She is also on a part-time secondment with Hywel Dda University Health Board as a Professor in Quality Improvement and Patient Experience and is part of the coaching team for the EQliP Quality Improvement Collaborative. Formerly, she was an Improvement Science Fellow with the Health Foundation. She has a background in operations management, supply chain management and quality improvement. Sharon teaches and supervises students on Swansea’s MSc in Health Care Management. She completed her PhD with the Lean Enterprise Research Centre at Cardiff Business where she also undertook research within various industries. Her research interests include Lean, Quality improvement, Pathway redesign, Co-production/Co-design, Evaluations, Professional identity and integrated teams in health and social care.

Pauline Found

Pauline Found is an Emeritus Professor of Lean Operations Management and a Senior Lecturer in Logistics and Operations Management at Cardiff Business School. She was a Senior Research Fellow at the Cardiff University Lean Enterprise Research Centre (LERC) where her research on sustainable change was awarded the Shingo Research Award in recognition of an Outstanding Contribution to Knowledge in the field of Operational Excellence for her Lean Iceberg Model of Sustainable Change. She has published numerous books and papers on Lean and she has developed innovative solutions to industry-led problems to improve efficiency and effectiveness through implementing Lean and Operational Excellence techniques.