Knowing Through Consulting in Action

Meta-consulting Knowledge Creation Pathways

Francesco Ciampi

• Publisher: Firenze University Press
• Year: 2019
• Print ISBN: 9788864536422
• eBook ISBN: 9788864536620
• Topic: Economics
• Subtopic: Economic History
• Index: Economics

Management consulting firms are often discussed as being the firms whose core product is knowledge itself. However, despite the fact that consulting firms are generally aware of the value of knowledge for their own organizations and for their clients, the empirical evidence shows that even today the (economic and, above all, cognitive) value-creation potential related to the transition from consulting approaches geared to the transfer of "best practices" (consultant as expert) to consulting approaches geared to the cooperative creation of new knowledge and managerial capabilities (consultant as a facilitator of new managerial knowledge and capabilities creation processes) is rarely consciously perceived and, consequently, is not adequately planned for and exploited. This book interprets management consulting from a knowledge perspective, and proposes a general conceptual framework for investigating and interpreting that potential. Francesco Ciampi is an Associate Professor of Management at the Business Science Department of the University of Florence. He has been teaching post-graduate courses in Management Consulting since 2004. His current research focus on management consulting (with an emphasis on client-consultant relationships and consulting knowledge-creation dynamics), financial management (particularly on qualitative variables for default prediction modelling), and small and medium-sized enterprises.

Chapter I

Bridging the gap between scientific research
and management consulting

Management consultancies like McKinsey and BCG are nearly always at the top of the first job wish list of young US and European MBA graduates. Over a third become management consultants (Cox, 1997).

In the course of the last thirty years, the relationship between management consulting and management education1 has become more complex, and the dividing line between the two has become less stable and increasingly difficult to define. The business world is in a state of continuous change; and education systems cannot always keep up.

One major development is the higher level of complementarity between academic education and consulting. The big consultancies are increasingly taking on the role of ‘postgraduate business schools’. Many MBA graduates from the most prestigious business schools, such as Harvard and the Insead, start their careers in a leading consultancy firm (e.g. McKinsey, Booz Allen, Ernst & Young, BCG) before going on to take up high level positions in one of the large multinationals such as American Express, Westinghouse, or Lufthansa. That’s how Henry Mintzberg, at the end of the last century, described the best strategy for a young graduate who aimed to become part of the top management of a large corporation: «After the MBA, you work as a consultant with some prestigious firm for a time, skipping from one client organization to another. And then you leap straight into the chief executive chair of some company, making judicious moves to others in the hope that you may one day end up running a company like IBM» (Engwall, 1998).

There is to some extent also greater integration between the two worlds. In the US, and also in Europe and in Japan, the main business schools have started to run executive development programs, i.e. tailor-made training programs for middle and top managers, which are designed to meet the specific requirements of the firms that have commissioned the courses. At the same time, the main consultancy firms are taking an increasingly active part within academic institutions. They provide funds for special training projects, for master’s degrees and for complete undergraduate degree courses. McKinsey has long been a key sponsor of Harvard Business School, and the British Management Consultancies Association has given financial backing for the London Business School. And the representatives of the big consultancies are on the boards of many business schools.

Another major development is the higher level of competition. The big consultancies are, in fact, increasingly setting up and developing their own training centers, or even ‘corporate universities’, which aim to provide new employees (and client firm executives) with the type of specialist, mainly process-related, knowledge (for example the knowledge concerned with handling change management processes, which is an essential part of management consultants’ work) that is rarely included in university curricula, even in universities outside Europe. Though consulting firms will no doubt continue to recruit the new graduates of the most renowned business schools, there is a growing risk that even these schools may stop being real educators and may end up acting as mere selectors, while the people selected will be trained elsewhere.

At the same time, there is no clear sign of spontaneous change in the attitudes of academic research toward management consulting.

Those engaged in developing business theory have always been aware of the essential, and vital, effects that practice has on theory.

Management teachers should not shut themselves off from the real world. Indeed, they should take an active part in it so as to enrich their ideas and obtain a sound background that goes well beyond information from books or superficial, sometimes even futile, so-called ‘research projects’…. They should remember what Galileo said: «You don’t learn to play the organ from people who build organs but from those who know how to play them» (Fazzi, 1982).

In 1977, as a result of the discussions that took place the previous year during a conference concerned with management consulting, the Academy of Management approved the following Position Statement on Professor-Consultants: «The Academy of Management is supportive of professional consulting activities by its members when these activities are conducive to the professional growth of the individual and contribute to the management discipline through the enrichment of teaching, research, and understanding of the field» (Gore & Wright, 1979).

Yet in the academic world, both in the US and to a greater extent in Europe, there continues to be the idea that research and consulting are essentially two distinct and separate worlds. Research is seen as having the role of creating new knowledge, while the role of consulting is to apply existing knowledge to concrete corporate contexts (Savall, 2001).

We may need to ask ourselves if such a dichotomy has much value in today’s world. The results obtained in research work, and their validity, depend on researchers being really able to observe, analyze and penetrate the object studied as it really is. Physics or chemistry researchers do experiments in their laboratories; but management researchers must find laboratories outside the university, since firms cannot be reproduced within the walls of academic institutes. Nowadays, firms are characterized by a high (and increasing) degree of complexity. External observation consequently becomes an increasingly inappropriate method if one is to adequately grasp the increasingly wide and articulated, heterogeneous and changeable dynamics involved in the corporate evolution, be they structural, relational, competitive or technological, etc. One recent research shows that firms consider consultancies, competitors, suppliers and clients far more useful as sources for new management ideas than the literature and the academic world (Table 1).

Table 1 – Views on the Role Played by Different Sources in the Diffusion of New Ideas. Interviews by the author in 2015 with 15 Italian medium and large firms.

Sources for new management ideas	Extremely Important	Very Important	Somewhat Important
Scientific literature	20%	35%	28%
Academia	10%	12%	72%
Clients	31%	40%	20%
Suppliers	33%	41%	13%
Consultancies	25%	31%	29%

The scientific approach to management needs to change radically and move its observation point towards the inside of the object studied. The discovery, analysis, and validation of the existence, intensity and direction of the (cause-effect, circular, etc.) relationships between the many significant variables involved would be made much easier if it were possible to use experimental research tools. For instance, by excluding a hypothetical cause and testing to se...

Table of contents

• INTRODU-CTION
• Chapter I
• Chapter II
• Chapter III
• Chapter IV
• Chapter V
• Chapter VI
• Chapter VII
• Chapter VIII
• REFERENCES