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MANAGEMENT CONSULTING 101 part 1

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Being a consultant and also teacher, I noticed gaps between what is being taught and what is being practised. These slides are my attempts to close the gaps.

Part 1 is more on the overview and processes while Part 2 will place more emphasis on Consultant's competencies.

Since many have requested for the copy, I have made this presentation downloadable. Thank you for your visits and comments.

Publié dans : Formation

MANAGEMENT CONSULTING 101 part 1

  1. 1. MANAGEMENT CONSULTING NON-COMMERCIAL EDUCATIONAL PURPOSES USE ONLY
  2. 2. over view
  3. 3. 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
  4. 4. 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
  5. 5. BEING A CONSULTANT IS TOUGH!
  6. 6. 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
  7. 7. CRITIQUESON MANAGEMENT CONSULTANCY false benefits were promoted as real ones could not be realised IMPRESSION MANAGEMENT
  8. 8. CRITIQUESON MANAGEMENT CONSULTANCY VALUE
  9. 9. 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
  10. 10. ADDING VALUE – RECENT RESEARCH Ringland and Shaukat (2004) summarised research that found management consultancies were employed in five key areas
  11. 11. 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).
  12. 12. 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
  13. 13. 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)
  14. 14. 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)
  15. 15. 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
  16. 16. FIELDS OF CONSULTING ACTIVITY
  17. 17. 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.
  18. 18. 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
  19. 19. 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
  20. 20. 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
  21. 21. CORE BUSINESS PROCESSES
  22. 22. 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
  23. 23. ‘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.
  24. 24. ‘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.
  25. 25. CONSULTING PROJECT TYPE
  26. 26. 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
  27. 27. 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)
  28. 28. CONSULTING PROCESS
  29. 29. 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
  30. 30. 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
  31. 31. 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
  32. 32. 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
  33. 33. 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
  34. 34. Approaches in consultancy
  35. 35. 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
  36. 36. PRELIMINARY ANALYSIS TECHNIQUES Matrix based formulations models Mnemonic letter based models Issues and themes models Other Models
  37. 37. 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
  38. 38. 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
  39. 39. 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
  40. 40. 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
  41. 41. CONSULTANCY PROVIDER Matching what the client wants
  42. 42. BEFORE NEGOTIATING ENTRY BRIEF SCOPING HIGH LEVEL PLAN PRELIM PROPOSAL PRESENTING PRELIM PROPOSAL
  43. 43. RELATIONSHIP & ENGAGEMENT
  44. 44. KEY TO SUCCESSFUL ENTRY
  45. 45. BUILD BREAK REPAIR TRUST TAKES TIME SECONDS FOREVER
  46. 46. 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
  47. 47. WHO IS THE CLIENT ?
  48. 48. THE CLIENT 3 MAIN GROUPS those who KNOW those who CARE and those that CAN ALL THREE GROUPS ARE VITAL TO ENGAGE
  49. 49. 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
  50. 50. CLIENT CONSULTANT RELATIONSHIP can be defined simply as the association between the two parties 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
  51. 51. Devinney and Nikolova (2004) model for complex relations that occur between clients and consultants
  52. 52. GOOD TO BE HONEST AND OPEN IN THE RELATIONSHIP CLIENT CONSULTANT RELATIONSHIP can be defined simply as the association between the two parties FUNCTIONAL CHARACTERISTICS of the relationship are also important to consider in terms of the: • contractual obligations, • the idealised relationship and • the actual relationship
  53. 53. PHASES Preparing for contact Orientation Identification Explorations Resolution FORMING THE RELATIONSHIP increasingly harder to establish new client relationships
  54. 54. NEGOTIATING ENTRY BRIEF SCOPING HIGH LEVEL PLAN PRELIM PROPOSAL PRESENTING PRELIM PROPOSAL
  55. 55. 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
  56. 56. HI LEVEL PLAN BROADLY ON CONCEPTS, TIME, RESOURCES, COST AND MAJOR DELIVERABLES The OBJECTIVES/ OUTCOMES/ DELIVERABLES/ SOLUTIONS are what the client is buying.
  57. 57. 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
  58. 58. 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
  59. 59. 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.
  60. 60. PROPOSAL • STATE WHAT TO ACHIEVE. • GET THE CLIENT’S COMMITMENT. • WELL-WRITTEN • WHAT CLIENT IS ACTUALLY BUYING. • ADDITIONAL OFFERINGS. • BALANCED
  61. 61. SAMPLE PROPOSAL
  62. 62. 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

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