Management Consultancy

Morgen Witzel

• Publisher: Routledge
• Year: 2015
• Print ISBN: 9781138798830
• eBook ISBN: 9781317629917
• Topic: Business
• Subtopic: Business General
• Index: Business

What is management consultancy? How has it developed? How does it affect businesses? This book answers these questions and introduces the field for those looking to develop a career as a management consultant.

Providing a thorough introduction to management consultancy, Morgen Witzel covers the topic from a range of perspectives including the field's historical development, the client's perspective, business analysis, return on investment, consulting failures, ethics and accountability and the growing importance of sustainability.

With exercises and case studies throughout, this practical textbook provides students with a rounded and critical understanding of what it means to be a management consultant and in so doing, will help readers emerge as employable management consultants of the future.

1 Introduction

DOI: 10.4324/9781315756356-1

Management consultancy is one of the preferred career choices for business school students around the world. Surveys for the past several years of MBA and MSs students have shown that management consultancy is one of the top five – sometimes top three – choices of career and surveys of undergraduates also include consultancy among the top ranked choices. Consultancy has a perennial appeal for young people at the beginning of their business careers.

Why so? Consultancy has a certain glamour about it, it is true, but this glamour is not always deserved; a lot of consulting work is pretty mundane and un-glamorous. It appeals to people who enjoy problem solving, but all management is full of problems requiring solving. Students sometimes tell me that they think they would enjoy the challenge and stretch of consulting, but again, there are plenty of other arenas in business where challenge and stretch can be enjoyed.

If you want to be a successful management consultant, you have to be prepared to work extremely hard for long periods of time. You must be able to put your client’s interests first at all times, and not allow your own prejudices or preferences to interfere. You need to be a good diplomat, and to have very high professional standards which must never be allowed to slip. You need to have a very strong set of personal and professional ethics.

You will need to be a good analyser and problem solver, but most of all, you will need to be different. Diversity is the breath of life in management consultancy. Consulting teams are expected to have a great deal of knowledge at their fingertips; no one expects them to know more than their clients, but they must know things that are different, that bring new perspectives and new ideas to the client. That means consultancy firms are looking for people who have different experiences, different approaches to life, different ideas. If you want to be a management consultant, then the advice from the professionals is: make yourself interesting. Gain different experience, learn different knowledge, learn to think about problems in new and different ways.

Knowledge is the consultant’s stock in trade. Without it, he or she has little to offer clients. As this book will make clear, the would-be consultant must make personal learning a priority, and must continue do so throughout the rest of her career. Knowing how to be a consultant is not particularly difficult; again as this book will make clear, the principles are pretty simple. But you will only be able to make those principles work if you can master the kinds of knowledge that clients need, and bring it to them in exciting and innovative ways.

I make this point because getting a job in consultancy is not as easy as it used to be. Back in the 1990s when the profession was growing rapidly, consultancy firms used to descend on business schools and scoop up their best and brightest talents, usually based on the marks they were awarded, take them away and train them into consultants. Those days are passing, and for some consultancy firms, have already passed. Fewer consultants are being hired, and the firms are being much more choosy about the people they do hire. As we shall see in Chapter 12, they are looking for distinctive competences, not just brain power or analytical ability.

Therefore, if you want to be a management consultant you need to concentrate on building up your own skills and knowledge base and making yourself distinctive. This book will tell you what kinds of things you need to know, what the tasks of the consultant are and how you need to adjust to bring your own knowledge into line with those requirements. This book will not teach you everything there is to know about management consultancy, because the subject is vast and changing, and the most experienced consultant in the world does not know a fraction of all there is to know. Every client is unique; every client engagement is unique; client needs are constantly changing and evolving; and consultancy firms are changing and evolving too. Knowledge, for a management consultant, is a journey, not a destination. For would-be management consultants, this book is the beginning; but only a beginning.

Structure of the book

In writing this book, I have assumed that the great majority of the audience will be MBA, MSc or undergraduate business students, probably reading this module in conjunction with a taught module or course on management consultancy. There are therefore a number of student exercises, things that you can do either in class or in independent study. I urge you to complete all of these and use them as bases for reflection both now during your course and later. There are also a number of case studies; these are intended for classroom use and discussion, but there is nothing to prevent students from considering these as part of independent study.

Part I of the book defines the nature, tasks and roles of management consultancy. Chapter 2 introduces students to two different but related approaches to management consultancy. The first is the process model, which describes management consultancy as a series of tasks and steps that need to be carried out including negotiation, analysis, identification of options, presentation of options and final agreed solution. The process can also include implementation of the solution, although some consultants and consultancy firms prefer not to get involved in implementation. The second is the client engagement model, which focuses on the relationship between client and consultant. In the client engagement model, maintaining the relationship should be the first priority of the consultant, because unless a strong relationship exists, it is unlikely that the steps of the process can be carried out successfully.

The notion of the engagement is crucial. Different consultancy firms use different terms, such as project or assignment or study, but I prefer engagement because it suggests a relationship of equals between consultant and client. That is an important point which must never be forgotten. Clients call on consultants because they need help, but that does not mean clients are helpless. They know as much, indeed far more, about their own business than the consultant does, and the consultant must be humble enough to realise this. A good engagement will only occur if there is mutual respect between both parties.

Chapter 3 gives a brief introduction to the consulting profession, its history and present condition. Several figures from the profession – Dominic Barton, managing director of McKinsey & Company; Matt Krentz, senior partner and global leader of the People team at Boston Consulting Group; Simon Hayward, chief executive officer of Cirrus Connect; and Andrew Hooke, chief operating officer and head of government practice at PA Group – then offer their reflections on directions in which the industry might go over the next ten years.

Chapter 4 moves on to look at the role of the management consultant in more detail. Or rather, the roles: one of the points made in this chapter is that different clients will expect consultants to play different roles, depending on the client’s own situation and needs. Part of the chapter is given over to role theory and how consultants can apply it to their own work to build better and stronger client engagements. Other themes in this chapter include the values of the consulting industry and also the professional standards expected of consultants by clients and by the consultants’ own employers, the consultancy firm.

This last theme is particularly important. Consultants must have very high levels of professional standards and stick to them, all the time. A German business magazine once referred to management consultants as the ‘Jesuits’ of business (Edersheim 2006). It is not an inapt comparison. Purity and clarity of thinking and behaviour are essential for consultants if they are to be successful.

Chapter 5 then moves on to the most important people in the management consultant’s universe, the client. (Very few management consultants or consultancy firms refer to the people who engage their services as ‘customers’; some firms ban the use of the term altogether. ‘Clients’ is the preferred option.) We look at the reasons why clients engage consultants, and discuss how important it is for consultants to know in advance why they have been brought in and what clients’ expectations are. We also look at how clients choose consultants before once again returning to the all-important client–consultant relationship, which we examine this time from the client’s perspective.

In Part II we move on to look at what consultants do and how they deliver value to clients. We begin in Chapter 6 with analysis, the gathering of data and information and understanding it in order to solve problems and reach recommendations. Consultants conduct analysis on three levels. First there is situation analysis, which involves taking a broad overview of the client organisation. Before focusing on individual problems it is essential to have as complete a picture as possible of the client organisation, its market position, environment and resources; without this picture, it can be difficult if not impossible to arrive at realistic recommendations.

Second, there is problem analysis, the focusing in on the things that require to be changed. Often clients will already have an idea of what their problems are – that is why they engaged consultants in the first place – but in this chapter we make the point that the problems clients think they have sometimes mask other, deeper rooted problems of which the client is unaware. We look at analytical techniques for getting to the heart of the issue, such as Why–Because or Five Whys analysis. Finally, there is solution analysis, in which the gathered data and knowledge are sifted for potential solutions.

In reality, time pressures and client demands usually mean that consultants are doing two and sometimes all three stages at once, and often problem solving on the fly at the same time. In reality this can be a good thing; action learning, which we also introduce and discuss, can be a powerful tool for learning and reach insights that a more linear approach would not reach. This is especially true if client managers are directly involved as members of the consultancy team, and the book argues that it is very important to have this level of client involvement.

Chapter 7 moves on to problem solving and capacity building, the end games of any consultancy assignment. We start by running through several generic methods of problem solving, though of course consultancy firms – especially large ones – often have their own ‘house’ techniques. Techniques such as weighted options, abstraction, reduction, analogy and hypothesis testing are considered along with their strengths and weaknesses. We also discuss the importance of recognising bias in problem solving. Most of us suffer from biases in our thinking; the important thing is to recognise what those biases are and make allowances for them so that we get a solution which is right for the client, not right for us. The chapter then moves on to capacity building and discusses the key areas where capacity is most often needed, in systems (including technology), knowledge and people.

Chapter 8 looks at the issue of impact, the value that consultants deliver to clients. There have been difficulties in the past in measuring impact, leading some sceptics to argue that consultancy services offer nothing of provable value. Yet it is very important for consultants to demonstrate that they do have impact, and that they do make a difference to their clients. After defining impact, the chapter goes on to describe techniques for measuring and stating impact and lays out what consultants need to do during and after engagements to measure impact. At the heart of this chapter is the notion that true impact is determined by the client; whatever the client values from the engagement constitutes impact. Not all this value can be measured quantitatively, and it is a mistake to assume that measures such as increased growth, profit, market share and so on constitute verifiable measures of impact. True impact is often much harder to find and measure.

Finally, Chapter 9 looks at consultancy failures and recovery. Every consultant experiences failure at some point in his or her career, and one of the measures of a great consultant is how well they recover from failure and retrieve the situation to create client satisfaction. We define the causes and nature of consultancy failures, which can stem from the behaviour and actions of consultants, clients or both. We look at some common types of failure and show how failures can be detected and dealt with early on, before they can grow to the point where they damage the engagement, and finally we talk about learning from failure and how important it is if failures are not to be repeated. Every failure damages the consultant and the firm he or she works for; keeping failures to a minimum is essential for long-term success.

In Part III we look at some key issues in management consultancy today and tomorrow. We begin in Chapter 10 by looking at ethics in management consultancy, and stress the vital importance of a strong ethical outlook matched by high professional standards. We discuss various approaches to ethics, the contradictions between these approaches – for example, the difference between what is right and what is good, and how the two do not always match. We then apply these approaches to consultancy, and go on to suggest three frameworks for ethical problem solving that consultants might find useful.

Chapter 11 goes on to discuss sustainability, a hot topic in the consultancy and business worlds at the moment. We discuss sustainability, indicating that it is a much broader topic than mere environmental sustainability, important though that is. The book recognises that people will have varying personal views on sustainability. For the consultant, those personal views do not matter. What does matter is that clients, in ever increasing numbers, are turning to consultants to help them with sustainability-related problems and to build capacity to help them become more sustainable. This means that all consultants must put sustainability on their own agenda: they must learn what it means, see what new developments in sustainability are going on and use their knowledge to help clients build capacity and solve problems.

Finally in Chapter 12 we come full circle back to the idea of careers in consultancy. We will discuss briefly what consultancy firms are looking for when they hire and the characteristics of a good consultant, and then what consultants might consider doing to further develop their own careers.

Throughout the course of this book, I have assumed a fair amount of prior business knowledge, gained either from studies or through experience, and have not defined general business concepts in detail, save as they relate directly to management consultancy; this is a book about consultancy, not a general management textbook. If I use a term with which you are not familiar, then you should look it up and familiarise yourself with it as soon as possible. The terms I mention here are the bread and butter of management consultancy, and you need to understand them and what they mean.

What to do once you have read this book

The first thing, of course, is to act upon its principles. In my view there are three things on which you should concentrate if you are going to be a management consultant; and further, even if you change your mind about your priorities or are unable to find a place as a consultant, these three things will still stand you in good stead, in business and even in life itself.

Cultivate the highest professional standards. Follow the list of standards set down in Chapter 4, and live by them. Expect nothing but fully professional behaviour from yourself, and act accordingly. You do not have to wait until you graduate to do this; start now, and practice professional behaviour until it becomes natural to you. Recruiters will be impressed, and you will stand out from the crowd. Your new employers will be impressed too, and will mark you down as someone to watch.

Make knowledge your friend. ‘If I found out I only had two days to live’, a management consultant once said, ‘then I would begin studying coffins’. Be curious about everything; not just business problems but the world around you. Art, music, literature, philosophy, biology, chemistry, physics, the air and sea and sky and land around us and, above all, the people we meet and work with and interact with, can all serve as diverse sources of learning. Learn how to learn, how to assimilate and store and create knowledge. Practice doing so every day, until thinking and learning are as natural as eating and breathing.

Practice analysis and problem solving, all the time. Take every opportunity to work on case studies, exercises, puzzles, anything that requires you to exercise your brain to work out problems and find solutions. The analysis and problem-solving parts of your brain are like muscles. Flex them, exercise them, keep them working and over time they will build up and become stronger. After a while, problems that will leave your colleagues baffled will yield up solutions quickly to you, because you know how to study them and analyse them, and you know the way to generate answers to questions.

Management consultancy is not an easy option. The work is hard, and often it is dull and unglamorous. But the rewards, in terms of helping other people and other organisations and making a real contribution to business and society, and in terms of personal development, can be very great indeed. If you are set on a career in management consultancy, read this book and pay close attention to your studies. And above all, as we said earlier, make yourself interesting.

Part I What consultancy is

2 What is management consultancy?

DOI: 10.4324/9781315756356-2

Management consultancy is a professional s...

Table of contents

• Cover Page
• Half Title Page
• Frontmatter Page
• Title Page
• Copyright Page
• Contents
• List of illustrations
• Acknowledgements
• 1 Introduction
• PART I What consultancy is
• PART II What consultants do
• PART III Issues in management consultancy
• Bibliography
• Index