With many phony business consultants, professionals help startups gain edge

KLAIPEDA - What twenty years ago in the middle of Vilnius was a Soviet military base with sallow-colored somber barracks, is now a cluster of modern buildings, known as Vilnius Northtown Technology Park. It catches eyes, signifying the achievements of independent Lithuania in the field of innovations and technological advancements.
Founded in 2002 by the Ministry of Economy and the Vilnius city municipality, the public institution Northtown Technology Park (NTP), a high technology business center, today aims to gather companies that are receptive for knowledge, science and innovation, consulting with them on law, finance, management, sales, marketing and other issues useful to small and medium size business.

Business consultations take up a lot of NTP’s focus, making it a significant player in the business consulting market.
NTP director, Gediminas Pauliukevicius, says that, alongside other business services, free of charge business consultations have been extremely popular among entrepreneurs. “In the last year, our business consultants have given business advice to more than 160 business people countrywide, spending over 1,000 hours of individual work with them,” says Pauliukevicius.
He says he has witnessed the whole business consulting history over nearly 10 years. “Just 10 years ago, the sheer majority of concession owners would be shocked at the thought of opening up to outsiders and allowing somebody to know how their business was being run. However, the times have irreversibly changed, and most modern business people realize the importance of business consulting. However, still, not all,” the NTP director said to The Baltic Times.

He notes that business startups, in the beginning of their activity, usually make the same typical mistakes that can bring them to their knees. “The typical blunders, as a rule, turn gradually into big problems which, upon the unstable market conditions, can simply cripple the startups,” the director says.
NTP is about to finish carrying out a project which co-partners a bunch of renowned business consultants, and which aims to provide business startups with necessary intellectual support, help entrepreneurs figure out inner business processes, as well as sales and marketing peculiarities. “To some, I believe, the project has opened eyes as to whether their chosen business idea can pay off in the future,” Pauliukevicius says.

“All project participants, which mostly are business startups, appreciate the fact that, instead of focusing on common business solutions, our project partners, well-known Lithuanian consulting companies such as Ernst&Young, TMD partneriai and BORENIUS/ Svirinas and partneriai, have provided face-to-face business management sessions in the field of business solutions as well as more effective business management and expansion solutions.

The NTP director says that when it comes to business consultations, most entrepreneurs seek not just face-to-face meetings with the consultants, but also ask them, regardless of the business topic, to focus on the “innovation thing.”
“Sure, the topic of how to optimize business operations overhauling available resources and setting up for growth prevails in the years of crisis,” the director says. However, he notes, though the majority of modern entrepreneurs are open for such business apprenticeships, some still mistrust it. “To some Lithuanian businessmen, allowing a business consultant, especially a foreigner, to delve into their business is still a big taboo. Some, out of prejudice, fear that the consultant is to snoop on their business secrets and will leak them to competitors. Some just still believe that it is ‘unethical’ to speak about their business ideas. However, there is less and less [businessmen] of this kind, and even those who are too suspicious about business consulting, make their revelations after speaking to a professional,” Pauliukevicius stressed.

Demand for business consulting, he says, is on the rise, mostly because of increasingly abundant testimonies on how professional consultants have helped to optimize business operations. “Before the crisis, many entrepreneurs would sign up for business consulting seminars out of curiosity. Nowadays, though still crisis-affected and, therefore, possessing less resources, they seek business apprenticeships in need of business advice that could lead to increasing business effectiveness, savings and, ultimately, business optimization,” the NTP director asserted.
He says there are “quite a few” professional business tutors in the market, however, only those on top get paid 100 euros an hour.

Alongside business consultations, NTP implements various business support, environmental protection, park expansion and service quality improvement projects. Since 2005, NTP has conducted initiatives to stimulate entrepreneurship in new forms. It began with the project “National business plan competition for 2005-2008” that allowed beginner businessmen, startup companies and those willing to expand, find new ideas and create perspective partnership connections.
A few years ago, Vilnius Northtown Technology Park launched the popular television project “Lietuva gali”(Lithuania can) that stimulated entrepreneurship among young Lithuanian entrepreneurs, and during which seasoned businessmen with successful business experience helped struggling companies to survive with their knowledge and advice.

Synergium director Mindaugas Kazlauskas says he is also very “appreciative” of the NTP business consulting project. “There are tons of various business consultants and business advice in the market. However, the NTP project partners, the business consulting companies, have been a real surprise, paying personal attention to all project participants while providing them with pragmatic, earthy pieces of advice,” the Synergium director said.

He added: “Considering the abundance of business consultations in the market, those provided by the supreme level experts in their fields is the best investment today, when the business environment is changing so fast. Those ventures that pretend to know enough of ‘what is going on’ fall asleep on their achievements and soon lose their positions in the market.”
He says Synergium sticks with several consulting companies, both Lithuanian and foreign. “I disagree with those who prefer only foreign business consulting companies. There are quite a few on the Lithuanian market that do not fall in any sense behind their foreign counterparts. Therefore, it makes no sense to rely exclusively on foreign business consulting companies. Nevertheless, generally speaking, I would call business consulting a relevantly new business,” Kazlauskas said to The Baltic Times.

However, he notes, there is a shortage of strategy consultants, who specialize in niche markets. “Most Lithuanian business consultants are well aware of the general business trends and rules in the Western European market; however, sometimes none of them can go into specifics as to what is going on, let us say, in Irish, German and, furthermore, Australian markets. That is when we have to rely on a foreign consultant,” the Synergium director emphasized.

He says that Synergium spends “little” for business consulting services. “We buy only those services that we cannot research ourselves,” Kazlauskas said. He points out that export experts are the most sought-after in the consulting market today. “It is not surprising, as most Lithuanian companies are Western market-oriented. With the shake-ups in it due to the fears of the second dip recession, Lithuanian export companies are eager to anticipate the export market fluctuations and, therefore, spend quite a lot of money for the business consultants who focus on the export markets,” the Synergium director said.

Vidas Petraitis, director of Lean.lt, a business consulting company that practices Toyota executives’ experience in its activity, says that a business consulting direction is usually determined by the existing situation in the market. “Nowadays, two directions prevail – how to sell and how to save. Others are oriented to business entity and business personality development,” Petraitis said to The Baltic Times.

Asked to compare Lithuanian and Western business consulting practices, he says the main difference is in the level of competence. “For Westerners, the long-term striving for the purpose and development of managerial skills are the main objectives. However, in Lithuania, many business consultants usually focus on a fast effect and redoing things over and over again. Lack of experience in the domestic consulting market is another characteristic,” Petraitis pointed out.
He cautions that business consulting in Lithuania may shift to a worse situation if appropriate competence consultants bearing practical experience and possessing universal knowledge will not turn up in the market soon. “Quite often, it is not the methods that are to blame for setbacks, but the lack of consultants’ practical experience and competence. Therefore, quite naturally, entrepreneurs get disappointed and seek alternatives,” the Lean.lt representative stressed.

Nerius Jasinavicius, director of TOC sprendimai (TOC solutions), a business consulting company, says that EU financing decides so far the specifics of Lithuanian business consulting. “The flowing EU cash significantly decreases client sensitivity to a business consultant’s service quality, making business consultants financial assistants rather than consultants,” Jasinavicius maintained to The Baltic Times.

In the West, he says, clients, as a rule, pay for consulting services with their own, not “European,” money. Therefore, Westerners are more demanding and do not usually hire those consultants who cannot prove their abilities to turn their theoretical skills into practical achievements. “There are a lot of consulting companies in Lithuania whose ‘business’ has very little to do with consulting, as they only help receive and ‘soak up’ EU funding allocations. In 3 or 5 years, with the EU financing decreasing, the market is likely to be shaken up, as the clients will realize that the EU cash experts, the so-called ‘business consultants,’ are useless in providing a real benefit for a business. These kinds of ‘consultants’ will be simply sifted off,” said a convinced Jasinavicius.