CNP Group vs. Individual Management Consulting for Auto-Parts SMEs

Colombia's auto-parts SME sector needed better management practices, but individually delivered consulting is often too costly to fund at national scale. The Centro Nacional de Productividad y Competitividad (CNP), a Colombian non-profit productivity institute funded by the national government, worked with World Bank researchers to test lower-cost alternatives.

The trial randomly assigned 159 auto-parts firms, in groups of 53, to intensive one-on-one consulting, to lower-cost consulting delivered to small groups of firms (modelled on agricultural-extension methods), or to a control group, to compare management and growth outcomes against cost.

CNP delivered both consulting formats to their respective treatment arms over the study period, with the group format modelled on agricultural-extension delivery methods applied to firms.

Both consulting approaches raised management-practice scores by a similar 8 to 10 percentage points versus the control group, but only the group-based approach — costing roughly one-third as much per firm — led to a statistically significant increase in firm employment (about 4 to 7 additional workers per firm) over the following three years. Individual consulting's effect on firm-level growth was smaller and not statistically significant despite its much higher cost per firm and equal improvement in measured management scores.

The results are an important cautionary finding for programmes that assume intensive one-on-one consulting is worth its price premium: a lower-cost, group-based delivery model matched individual consulting on management-practice gains and outperformed it on statistically significant firm growth.