MANAGEMENT CONSULTING 101 part 1

MANAGEMENT
CONSULTING
NON-COMMERCIAL EDUCATIONAL PURPOSES USE ONLY

MANAGEMENT CONSULTING
[Consultancy Competencies Framework]
Market
Knowledge &
capability
Consulting
Competencies
Consulting
skills &
Behaviours
Business Acumen
Project
Management
Personal &
Professional
Development
Analytical and
Proactive
Thinking
Emotional
Intelligence
Effective
Communications
Professionalism and Ethics
Practice Management
Consulting Skills & Tools
Consulting Process / Engagement Management – Engage, Develop, Deliver, Disengage
Managing Client Relationship
Business Understanding and External Awareness - PESTLE
Technical Discipline
(Finance, Human Resources, Engineering, Marketing, etc…)
Sector Specialisation
(Aviation, Health care, Oil & Gas, Public Sector, NGO, etc…)
© International Management Consulting, USA

Management consultancy is the creation of value for
organisations, through the application of knowledge,
techniques and assets, to improve performance. This is
achieved through the rendering of objective advice and/or
the implementation of business solutions.
DEFINING MANAGEMENT
CONSULTANCY

CRITIQUESON MANAGEMENT CONSULTANCY
writing Management books | techniques don’t necessarily
work well in the real world but are promoted by hype |
Branding
CREATING A FAD

false benefits were promoted as real
ones could not be realised
IMPRESSION MANAGEMENT

VALUE

JOHARI WINDOW
Luft & Ingram (1955) developed
the Johari model, which is most
often applied to individuals.
However, this model is equally
applicable to organisations and
perhaps reveals the added
value of consulting
PUBLIC IMAGE BLIND SPOT
HIDDEN ASPECT
OF THE
ORGANISATION
UNKNOWN
ASPECT OF THE
ORGANISATION
Addressed through staff
opinion and feedback
Addressed through
honest and open
management
KNOWN
TO STAFF
UNKNOWN
TO STAFF
KNOWN TO
MANAGEMENT
UNKNOWN TO
MANAGEMENT
Addressed through
management
consulting

ADDING VALUE – RECENT RESEARCH
Ringland and Shaukat (2004) summarised research that found management
consultancies were employed in five key areas

Types of
Consultancy
Many of the case studies published
on management consultancy sites
demonstrate only their successes.
However recognising failures is
equally as important (O'Shea &
Madigan, 1997).

ARE CONSULTANCIES
DIFFERENT
Differentiation is difficult in an industry that wants to
provide a comprehensive range of services. Czerniawska
(1999) argued that differentiation between consultancies is
essential so that clients don’t see all management
consultancies “as part of an indistinguishable mass”.
Generalist and niche or specialist firms can clearly be
identified

GENERALIST FIRMS
Generalists are large consultancy firms that offer a wide
range of services.
This consultancy developed out of accountancy,
engineering and IT business
This very size leads the organisation to operate in a range
of different areas and different markets and industries
Larger consultancies can mix various specialists together
(i.e, Archaeologists and Psychologists)

SPECIALIST FIRMS
Specialist firms by their very nature concentrate on
particular areas of the market
Review of the management consultancy industry stated
that much of the UK growth was the result of consultants
leaving the larger firms and setting up on their own
Sole traders (the simplest form of company but less
frequent in consultancy)
Limited company, with several directors & associates (these
can get quite big e.g., Lamberhurst Corporation)

SIZE
DOES
MATTER
The bigger the firm often the more that can be charged
Two reasons may account for this fee differential,
• size means that there can be a higher level of investment,
much more of a global reach,
• flexibility of resources and the ability to address the clients
concerns from numerous directions and from different
disciplines.
So, you can see why smaller firms do invest in networking with their
associates

S
small
M
medium
E
enterprise
Some 23 million SMEs provide around 75
million jobs and represent 99% of all
enterprises in the 25 countries that make up
the enlarged European Union.
SMEs are also important for other economies
such as the USA, Asia and Africa. However,
most business research is only conducted in
larger organisations leaving limited
information on SMEs consulting services.
SMEs prefer sustained support almost like
having a trusted advisor on hand to discuss
issues tends to be different and take on the
role of trusted advisor than being more
project based, Thus project based consulting
is unlikely to work with SMEs as with larger
firms.

PUBLIC SECTOR
Public sector organisation are becoming more business-like
in their focus. As such they use management consultancies
to install business practices and culture from the private
sector. Although sometimes, there IT investment, etc can
be greater than their private counterparts.
Roodhooft and Van Den Abbeele (2006) argued that
consultancies are used by the public sector due to the
following reasons:
• To reduce workload in the organisation
• To provide increased knowledge or competence due to
the lack of this expertise existing in the organisation
• To provide a third party, independent perspective on
an issue or problem
• To use consultants as ‘change agents’ bringing in
public sector reform

LARGE CORPORATIONS
Large corporations are typically difficult clients but the
rewards and opportunities can be great. Often it is difficult
to get the whole picture within the client, so the focus here
is using a variety of sources to back-up opinions and
perspectives
Jeans & Page, (2001) argue that the following are essential
in consulting with large corporations:
• Taking matters at face value and not getting
collaborative information
• Separating yourself from the clients politics
• Knowing the scope of the project and avoiding project
creep
• Not out staying your welcome

INTERNATIONAL
Consultancies disseminate management ideas on the
international scene
Nevertheless, written from a largely western and European
perspective. Eccles points out in Biggs (2010) that
consulting on the international front is not the same as
consultancy in the west. Understanding this is key for
success in the global arena

AREAS OF CONSULTING AND FIRM’S PROCESSES
Core processes
Operational
processes
Human
processes
Risk Management
Information System
Research and Development
Logistics and Customer Services
Operations including manufacturing and procurement
STRATEGIC MANAGEMENT
© International Management Consulting, USA
Marketing
Market
Research Sales Finance
New Product
Development
Business
Development
Human Resources Organisational Development Outsourcing Interim Management

‘HARD’ SIDE CONSULTING:
operational processes of a business
For competitiveness, goods and services need to be delivered
correctly to customers. This has long been the role of
consultants.
• Consulting in operations management – improving
manufacturing, logistics, purchasing and customer service.
• IT consultants help with hardware, software or the
strategy in adoption of technology.
• Technical consulting – delivering specific expertise
e.g. design.
• Risk management consultants are used where events can
affect the firm.

‘SOFT’ SIDE CONSULTING:
human processes of a business
Firms rely heavily on human capital but consulting
projects often hard to quantify. 2 main areas that
consultants get involved in are:
• human resources (recruitment and retention).
• organisational development (advising on the
best way to utilise the workforce).
Interim management not strictly consulting but they
are increasingly merging.
Outsourcing is where roles previously done within
a firm are undertaken by another organisation.

BROAD CATEGORIES
investigates a particular issue through
gathering relevant data.
• Discrete, data can be gathered
• Statistical or logistical
• Finite
focus on the implementation of the work
rather than just uncovering the facts.
• dealing continually changing
• developing and growing businesses
• A shared partnership
FACT BASED PROCESS-BASED OR ACTION BASED

RANGE OF CONSULTANCY ACTIVITIESManagement consultants by their very nature tend to have specialist knowledge
BUSINESS STRATEGY
Strategy may be defined as the policies
and procedures in an organisation that
gives it a sustained competitive
advantage. Business strategy involves
more than just specifying an
organisation’s mission, vision and
objectives but also aiding the company
through projects or programmes of
growth. Strategy needs to take into
account the key stakeholders of the
business.
MANUFACTURING AND
BUSINESS SERVICES
Manufacturing is the use of machines,
tools and people to create objects for use
(by other manufacturers) or for sale either
directly or via a retailer. It typically
involves large scale industrial production
whereby raw materials are manufactured
into finished goods. Consultancies work
can work in this area examining issues
such as production, quality control, use of
human resources.
MARKETING
The American Marketing Association defines the
activity of marketing as: Marketing is the activity,
set of institutions, and processes for creating,
communicating, delivering, and exchanging
offerings that have value for customers, clients,
partners, and society at large. Consultancy may
examine marketing as: a function (examining a
clients sales activity) or market research (e.g.,
consultation)
FINANCIAL AND
MANAGEMENT
CONTROLS
Financial planning and control are essential for
any business. Consultancy in this field may range
from implementing budgetary control, financial
planning, or calculating large investments in
capital. Area fraught with difficulties.
HUMAN RESOURCES
Human resource management (HRM)
which may be defined as the strategic and
consistent approach to the management of
individuals within an organisation. Through
the management of the organisation's
most valued assets, great business benefits
can be released. HRM represents a major
investment in terms of what has been
spent on individuals not only to recruit
them but also to train and develop them
into an effective employee.
INFORMATION
TECHNOLOGY
Projects and programmes in information
technology (IT) or more often name
Information Computer Technology (ICT)
can range in size like projects. Smallest
may be simply investigating why users are
not using a particular programme in terms
of human machine interaction. Other
projects, may be vast such as NPfIT, a
computer system being developed for the
NHS may be vast.
ENVIRONMENTAL
MANAGEMENT
Environmental management is a growing area
for consultancy. Projects within this area may
include urban, regional and international
development planning. Projects may seek to
improve the quality of lifestyle for poorer
nations. Other projects demonstrate how
physical, economic, ecological and sociological
aspects manifest in our environment for the
good of all human kind
QUALITY
MANAGEMENT
These types of project range in scope from
revising how a department measures
performance through to large scale
implementation of quality procedures.
Investigate the existing quality procedures of a
company and then revise this setting out
policy, performance measures and revised
quality assurance. May involve satisfying the
requirements of quality assurance bodies (e.g.,
ISO9001)

Successful consulting projects follow a set
process. There are nine stages from initial
contact to follow-up. They must be
completed in order with one section finished
before moving on to the next.
1
Initial
Contact
2
Decision to
work
together
3
Preliminary
analysis
4
Formal
Proposal
5
Project
Charter
6
In Depth
Analysis
7
Implement
ation
8
Delivery
9
Follow Up

Consultant and client meet informally or one or the other may make a
formal approach.
Consultants use questioning techniques to probe the client and reveal
their issues – basis for the project.
Formality of initiation project depends on:
• How well the consultant and client know each other.
• Expectations from the project.
• Level of resources committed to the project by the client.
• Investment by the consultant in making the formal proposal.
• Need to communicate within the client business.
• Need to inform third parties.
INITIAL CONTACT AND
INITIATING THE PROJECT

Key questions in the preliminary analysis:
• What are the major opportunities and issues the business faces?
• What prevents the business capitalising on the opportunity or dealing with
the issues?
• How can the consultant’s service help the business overcome this block?
The formal proposal is made around the answers.
Defining the objectives of the project communicates why it exists.
The OBJECTIVES/ OUTCOMES/ DELIVERABLES/ SOLUTIONS are what the client
is buying.
LOCKING THE PAIN POINTS
Preliminary analysis of the issues and defining objectives

Key functions of a formal proposal:
• Concise and efficient means of communicating the
objectives.
• Guides analysis and information gathering.
• Gives consulting team a common focus.
• Provides a fixed point of reference to go back to.
• Used to manage client’s expectations.
The project charter provides ‘ground rules’ for the
project team
PITCHING THE PROJECT
The formal proposal and project charters

Actual undertaking of the project & involves:
• Information gathering.
• Analysis and interpretation.
• Interaction with the client business.
• Project management and monitoring.
Keeping records to monitor progress e.g. a project log.
The final report has the project’s recommendations and future work.
On completion, consultant may want an endorsement to use later to gain work through a
project review and evaluation.
Many consultants maintain a relationship with the client as the latter recommends them to
others.
PROJECT PROGRESSION
AND FOLLOW-UP

APPROACHES IN
CONSULTANCY
LAISSEZ FAIRE
CONSULTANCY is when a new
method of conducting the work is
created from scratch for each
new assignment
METHOD DRIVEN
CONSULTANCY is when each
project uses the same
methodology and procedures
NORM, Most projects and sometimes
consultancies sit on a continuum between
laissez-faire and method driven consultancy
Increasing use of established methods
1. If the methodology does not
develop then it may become
obsolete
2. The methodology may be
poached by others and then
offered at a cheaper rate,
which invariably means that
to compete

PRELIMINARY ANALYSIS
TECHNIQUES
Matrix based formulations models
Mnemonic letter based models
Issues and themes models
Other Models

SCENARIO PLANNING
Scenario describes possible future business environment but
not a prediction | create a set of scenarios | challenge
existing business models | Evaluation of future investments
done using models such as discounted cash flow.
OPPORTUNITY, INNOVATION AND INFORMATION
Qualitative and Quantitative Research
V I S U A L I S I N G F U T U R E

Organisations depend on reliable data. Without the use
of proper research methods, the data gathered is not
reliable and thus incorrect decisions may be made
Thus, it is essential that consultants have an
understanding of research techniques even if they do
not carry out the research themselves

DIAGNOSIS AND DATA
COLLECTION
STEP 1. Identify the ‘real’ problem that the client wants to
be solved
STEP 2. What data need to be collected to solve the
problem above
STEP 3. Where is the information that will solve the
problem available
STEP 4. What is the most appropriate manner to collect
this information
STEP 5. What conclusions will be able to be reached by the
information collected
Data gathering after
action
Joint action planning
Joint diagnosis
Action
Feedback to client
Problem identification
Data gathering and
preliminary diagnosis
Consultation with a
behavioural scientist
Data gathering after
action
Joint action planning
Joint diagnosis
Action
Feedback to client
Problem identification
Data gathering and
preliminary diagnosis
Consultation with a
behavioural scientist
ACTION RESEARCH MODEL
CONTEMPORARY ACTION RESEARCH MODEL - POSITIVE MODEL
Trends in Action Research
• Moving from smaller sub-
units to total systems and
communities
• Promoting social change
Action Research Adaptations
• Participatory Action
Research
• Appreciative Inquiry
The OBJECTIVES/ OUTCOMES/ DELIVERABLES/
SOLUTIONS are what the client is buying.
QUANTITATIVE
QUALITATIVE

SALES PIPELINE
LIFEBLOOD OF CONSULTANCY
Marketing hands
off leads too easily
Unqualified leads
waste sale’s time
Marketing spends
more to recapture
lost leads
Warm
leads
leaked out
Long
Decision
cycle lead
to leaks

CONSULTANCY
PROVIDER
Matching what the
client wants

BEFORE NEGOTIATING
ENTRY
BRIEF SCOPING
HIGH LEVEL PLAN
PRELIM PROPOSAL
PRESENTING PRELIM PROPOSAL

BUILD
BREAK
REPAIR
TRUST TAKES TIME
SECONDS
FOREVER

CLIENT ENGAGEMENT &
RELATIONSHIP
Without clients, consultants are unemployed!
CLIENT ENGAGEMENT IS THE INVOLVEMENT
WITH THE CLIENT THAT HAS CONTRACTUAL
AND SOCIAL BOUNDARIES SET AT THE
BEGINNING OF AN ASSIGNMENT OR EVOLVES
THROUGH THE RENEGOTIATION OF WORK

THE CLIENT
3 MAIN GROUPS
those who KNOW
those who CARE and
those that CAN
ALL THREE GROUPS ARE VITAL TO
ENGAGE

CLIENT CONSULTANT
RELATIONSHIP
can be defined simply as the association
between the two parties
CLIENTCONSULTANT
Needs support or expertise
not available in house
Provides assistance or
relevant skills and expertise

CLIENT CONSULTANT
RELATIONSHIP
Research shown that the relationship between client
and consultant is poorly understood. Four models to
explain the complex relations that occur between
clients and consultants:
• the EXPERT model
• the CRITICAL model
• REFLECTIVE practitioner model
• INTERPRETIVE model, as interpret things in
a meaningful sense

Devinney and Nikolova (2004) model for complex
relations that occur between clients and consultants

GOOD TO BE HONEST
AND OPEN IN THE
RELATIONSHIP
CLIENT CONSULTANT
RELATIONSHIP
FUNCTIONAL CHARACTERISTICS of the
relationship are also important to consider in terms
of the:
• contractual obligations,
• the idealised relationship and
• the actual relationship

PHASES
Preparing for contact
Orientation
Identification
Explorations
Resolution
FORMING THE
RELATIONSHIP
increasingly harder to establish
new client relationships

NEGOTIATING ENTRY
BRIEF SCOPING
HIGH LEVEL PLAN
PRELIM PROPOSAL
PRESENTING PRELIM PROPOSAL

BRIEF & SCOPING
FACE TO FACE SESSION
LISTEN! LISTEN! LISTEN!
This may not necessarily be revealed in a formalised
document such as an EOI, tender or contract

HI LEVEL PLAN
BROADLY ON CONCEPTS, TIME, RESOURCES,
COST AND MAJOR DELIVERABLES
The OBJECTIVES/
OUTCOMES/
DELIVERABLES/
SOLUTIONS are
what the client is
buying.

PRELIM PROPOSAL
how the consultant will perform
the work the client desires
Introduction
Objectives and scope
Methodology
Timetable
Staffing
Costings
Annexes
DO GIVE THE BEST &
EXPECT REVISIONS

PRESENTING THE PRELIM
PROPOSAL
DON’T BORE THEM WITH TONNES OF SLIDES
ENGAGE IN ACTIVE DISCUSSION
SHARE KNOWLEDGE AND STORIES
SHOW THEM YOU UNDERSTAND THEM

CONSULTING SELLING
PROCESS
1
Initial
Contact
2
Decision to
work
together
3
Preliminary
analysis
4
Formal
Proposal
5
Project
Charter
6
In Depth
Analysis
7
Implement
ation
8
Delivery
9
Follow Up
Company chooses a consulting company based on whether:
• They have heard of the company.
• Offers the service they require.
• Rates are competitive.
• Has testimonials from other satisfied customers.
• Is efficient at handling the sales enquiry.
• Trusts the consultants who deal with them.

PROPOSAL
• STATE WHAT TO ACHIEVE.
• GET THE CLIENT’S COMMITMENT.
• WELL-WRITTEN
• WHAT CLIENT IS ACTUALLY BUYING.
• ADDITIONAL OFFERINGS.
• BALANCED

CREDIT
Biggs, D.M. (2010) Management Consultancy: A guide for students London: Cengage Ltd
Bowler, M.C. and Woehr, D.J. (2006) A Meta-Analytic Evaluation of the Impact of Dimension and Exercise Factors on Assessment Center
Ratings. Journal of Applied Psychology; 91 (5), p1114-1124,
Millmore, M., Biggs, D.M. and Morse, L. (2007) Gender differences within 360- degree managerial performance appraisals. Women In
Management Review. 22, (7), 536-551.
Hardman, D. (2009). Judgment and Decision Making: Psychological Perspectives, Wiley-Blackwell, UK
Charles Higgins Kepner and Benjamin B. Tregoe, (1997). The New Rational Manager, Kepner-Tregoe, Inc./Princeton Research Press,
Princeton, NJ, US [classics]
Janet Morison. 2011. The Global Business Environment. Palgrave MacMillan. UK
Stephen P. Robbins and Mary Coulter. 2011. Management, Pearson- Prentice Hall, UK
Cummings, GT. & Worley, GC 2009. Organization Development and Change, 9th Edition, Cengage Asia.
John Wild & Kenneth Wild. 2011. International Business. Pearson UK.
Williams. 2010. Principles of Management 6th Ed. Thomson South Western, OH USA.
Kinicki & Kreitner. 2008. Organisational Behaviour, key concepts, skills and best practices, McGraw Hill, NY USA,
Anderson, LD. 2009 Organization Development: The Process of Leading Organizational Change, Sage Publications, USA.
John P. Kotter. 1996 Leading Change. Harvard Business Press, USA.
HBR Case Studies: Making Change Stick (Harvard Business Review Case Studies). 2009. Harvard Business Press, USA.
Harvey, D & Brown, DR 2005, An experiential approach to organization development, New Jersey, Prentice-Hall International.
Google images – for the supply of images used in this presentation

MANAGEMENT CONSULTING 101 part 1

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MANAGEMENT CONSULTING 101 part 1