In difficult environments, consultants can help leaders set up strategies for buy-ins, a skill that has always been lacking in the majority of management positions. Weiss (2011) defines strategy as a framework through which decisions that determine an organization’s directions are made (p. 196). Consultants, emphasize on the implementation part of a strategy and the output rather than input, thus offering more viable decisions in a difficult environment. Timing is also essential. Consultants have perfected the art of timing. Several factors influence the correct time at which leaders should make a move. When 80 percent of all the involved elements, such as people, finances, systems, and culture, are all in place, the buy-in decision should be made (Weiss, 2011, p. 200). Lastly, consultants are also essential to crisis management. In difficult times, leaders have to master the art of communication and reaction. Transparency, a blameless character, and a quick reduction of effects are all desired. A consultant can help a leader communicate when a difficult environment has been neutralized, and when things are fully back to normal.
A contrarian strategy is when a consultant buys losers and sells winners in an investment (Dahlquist & Broussard, 2000). The position is often against the activities of the majority of buyers and sellers. A majority of investors pursue a trend-following behavior, which is characterized by time-series momentum effects. The effects, in most cases, last for shorter periods and are caused by temporary factors. Unlike the trend-following approach, the contrarian effect is felt after a long period when prices return to their intrinsic value. Contrarians, therefore, seize profitable arbitrage opportunities, even though they take more extended periods to make their profits (Chen et al., 2019). The position is also the best since contrarians play the role of returning the prices to their intrinsic value.
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References
Chen, Y., Niu, X., & Zhang, Y. (2019). Exploring Contrarian degree in the trading behavior of China's stock market. Complexity , 2019 , 1-12. https://doi.org/10.1155/2019/1678086
Dahlquist, J. R., & Broussard, J. P. (2000). Testing the contrarian investment strategy using holding period returns. Managerial Finance , 26 (6), 16-22. https://doi.org/10.1108/03074350010766701
Weiss, A. (2011). The consulting Bible: Everything you need to know to create and expand a seven-figure consulting practice . John Wiley & Sons.
