2024 lect 1 MOC.pptx
Transcript
There is a large and growing band of people who call themselves management consultants. These and related job titles encompass a divergent and eclectic group of individuals. it is not easy to come up with a concise definition , , The work such people do varies enormously. The fee rat...
There is a large and growing band of people who call themselves management consultants. These and related job titles encompass a divergent and eclectic group of individuals. it is not easy to come up with a concise definition , , The work such people do varies enormously. The fee rates range from low to very high, and the length a consulting project may vary from hours to years. Clients who use consultants can be the owners of firms, managers of one level of seniority or another, or the main board directors of major corporations. Clients can also be staff in the public sector and for profit organisations. Some consultants are employees of the firms the , , consulting takes place in, others are external but regular faces within an organisation, while many are individuals who appear in a client organisation for a short time and never reappear again. Their areas of specialist expertise go from obscure pieces of business to generalist management advice. Given this huge variety, what is it that is similar that enables them to be bundled together as management consultants? It is not easy to come up with a concise definition that covers this assortment of roles. The problem with describing the role of a management consultant is compounded by the fact that some existing definitions have been written by people who are not consultants, and who do not understand fully what consultants do. But listening to professional consultants can equally be misleading Consultants do the following seven things: 1. They provide advice and recommendations to managers, and may provide assistance with the implementation of the recommendations. They base their advice and recommendation on a set of skills and expertise, or intellectual property they have available to them. They consult. This may sound obvious given the name, that consultants engage in dialogue with an organisation and its staff, and apply their expertise to develop recommendations, taking account of the specific needs and context of that organisation. They are involved with a given client on a temporary basis. They are independent. A consultant should be providing advice or recommendations irrespective of the internal politics and vested interests of an organisation or the managers who are their client. They are not paid for from an organisation's normal staff budgets. They add value to a manager and the client organisation by helping them to change. Value can take many forms, such as improved decision making, faster change implementation, reduced business risk and so on. DEFINITION A consultant is an independent advisor who adds value by helping managers to identify and achieve beneficial change appropriate to their situation. Definitions For a more succinct view, the UK ’s professional body for consultancy (the Institute of Business Consulting) proposes the following definitions of the consultancy profession: “ Management consulting involves individuals, whether self-employed or employed, using their knowledge and experience, and their analytical and problem -solving skills, to add value into a wide variety of organizations within a framework of appropriate and relevant professional standards, disciplines and ethics”. In addition, the Institute of Business Consulting also offers the following definition of a management consultant: “A management consultant is a person who is professionally engaged in advising on and providing a detached, external view of a company ’s management techniques and practices. A consultant can operate as a specialist or a generalist. The client ’s requirements dictate which skills and expertise are most appropriate and the situations in which to use a consultant”. The publication of the Geneva -based International Labour Organization (ILO) proposes that: Management consulting is an independent professional advisory service assisting managers and organizations in achieving organizational purposes and objectives by solving management and business problems, identifying and seizing new opportunities, enhancing learning and implementing changes. How does consulting differ from other roles? Developing a full understanding of the role of the consultant is helped by understanding the difference between a consultant and an employee, a manager or a business leader. The boundaries between being a consultant and, for example a manager, are grey, but there are important and definite differences. Let's start by considering the role of a consultant versus an employee in the organisation using consultants. The obvious point is that a consultant is not an employee of the organisation they are helping, but an employee of a consulting business. Why does this matter? Most consultants want to do a good job that satisfies a client, but their performance assessments, pay increases, promotions, ongoing praise and criticism are not done by the client organisation. All these are influenced by their performance with clients, but consultants have different motivations from client staff. Consultants are never fully part of a client organisation's team. For example, a client may regard a consultant as having done a brilliant job by providing fantastic advice. A consulting company may judge the same consultant to have only done an average job because he did not manage to make any additional consulting sales. A consultant can be part of a client organisation's project team, and in doing this share some goals with other client staff, but consultants are always to some extent independent from the client organisation. Their incentives and performance drivers are different. This is true even for an internal consultant. Obviously, an internal consultant is employed by the same company as their clients, but is not employed by the same department or part of the same management hierarchy. This is not necessarily a bad thing - a consultant who is as much part of your team as any other employee will struggle to give truly independent advice. What about the difference between being a consultant and a line manager? Like managers, consultants often are hard working and want to produce a quality result, but this is relative to the scope of a consulting engagement. They do not and arguably cannot deliver an end result in a client organisation, and do not live with the outcomes of their recommendations. If a consultant is providing advice, then, if the advice is accepted, a line manager has to implement this advice somehow. Even if consultants help with implementation planning or a change implementation project, they do not end up working with the results following the implementation. Consultants are temporary visitors to an organisation - it is line managers who must live with the results of any consulting engagement. There is another point about consultants compared to managers. Many consultants are ex-senior managers with a good understanding of the challenge of managing a department. On the other hand, whilst all consultants advise, some have never managed anything of any significant complexity. Even relatively senior career consultants, who became consultants from university, may never have managed a team of more than 20 people. For someone in an operational role with several thousand staff and a budget of hundreds of millions, a consultant's understanding of the reality of dealing with this number of people and scale of budget will appear limited. The consultant's response to this should not even attempt to be an expert line manager, but to provide focused specialist expertise beyond that of a normal manager. Finally, what about a consultant compared to a business leader? Many consultants fancy themselves to be great leaders, and some have the potential. There are well regarded business gurus who have come from a consulting background, but a guru is not a leader - a guru is an influ-encer and a shaper of opinions. Sometimes you see a successful chief executive with a background in consulting, and they are probably a great leader. But on the whole I am sceptical about professional consultants as leaders. The consultancy profession encourages the development of a range of skills which sometimes can be mistaken for leadership, such as strong communication and influencing skills. Normally though, consulting does not require significant leadership skills. You can be a very good consultant without having the ability to lead or inspire. The fact that consultants are different from employees, managers and business leaders should not be taken as a criticism of consultants. Consultants are not employees, managers or leaders - because that is not what the role entails or requires. Consulting is a very different role from being an employee, manager or leader. Consultants must appreciate these roles, be able to work with them and be able to influence them. Some consultants may have a background in organisations which required them to manage or to lead, but this is not universally true. Consultants should not forget that the role of the consultant is to consult, not to manage or to lead. comparing consulting to other roles does to some extent depend on the type of consultant being talked about. There are two dimensions of consulting we should be aware of and differentiate: Internal or external consultants: An internal consultant is a full-time employee of an organisation who has a role as a consultant to the business. Typical examples include human resources (HR) or internal change management specialists. An external consultant is someone who is engaged for a specific consulting project, but otherwise is independent of an organisation. Internal consultants tend to have a greater understanding of an organisation's culture and are familiar with many aspects of a business that an external consultant will take some time to learn or understand. External consultants will typically have a broader range of experience and have done work similar to their current engagement in other organisations. Strategic, operational, implementation or specialist: Many consultants work in a wide range of roles and float between providing strategic advice, helping with implementing it and supporting operational managers. But generally we can differentiate between consultants (and consulting companies) who advise organisations at a strategic level – at an operational level – or at an implementation level – There are also specialist consultants Arguably all consultants should be specialists, but what I mean here are, for example, consultants who focuses on very specific areas such as regulatory compliance advice or on minimising technology costs. Another thing to consider is whether the work being done is consulting or another related profession. There are several job titles in common use which are often employed in relation to consultants, or in relation to people doing work that can seem similar to that of a consultant. The main examples are: Contractor: A contractor is a temporary employee who is usually paid a day rate to complete some work which is of a transitory nature, where it is not appropriate or not possible to employ a permanent member of staff. . Organizations are often left with a choice of whether to use contractors or consultants. A rough difference is that a consultant is employed to advise or provide skills the client and a contractor is employed as an extra pair of hands Interim manager: An interim manager is a specialised form of senior contractor. Interim managers should be expert managers, who fit quickly into even the most senior management roles. It is really impossible to define hard and fast boundaries with consultants, as many consultancies offer interim management services and some consultants regularly work as interim managers - but when they do they are not working as a consultant. Coach/mentor: It is common to pay for professional coaching and mentoring, to help individual managers. Such work is normally done on a one-to-one basis. Coaches and mentors are slightly different, but they are both concerned with helping individuals to reach their full potential. A consultant may work as a coach or mentor to individual managers, but there are also professional coaches and mentors, who rightly do not consider themselves consultants Facilitator: A facilitator is someone who uses facilitation skills to help a group or team resolve some issue or problem. Facilitation is one of the most misused words in business Varieties of consulting organisations There are many different organisational structures you can work in as a consultant, and the choice is important as it will affect the type of projects you do, the nature of the day-to-day work, and the level of risk and uncertainty you expose yourself to. There are essentially four ways you can work as a consultant: as a solo or independent consultant working for yourself or your own company as an employee of a major consulting company 3as part of an organisation offering a portfolio of services of which consulting is only one - the most common is the consulting, IT development and outsourcing company, but there are other variants as part of a small consultancy company. The independent consultant is usually either someone who has worked in a larger consultancy but wants a more self-sufficient lifestyle, or an exsenior manager who now wants to advise rather than manage. There are many reasons for choosing to become independent. I now prefer to work for my own company as it enables me to maximise my personal flexibility. The cost is that I am completely dependent on my own ability to find projects and generate an income. However, once you have an established reputation this is not that hard. Organisations always need help. Additionally, as my business costs are comparatively low, and I have other revenues, should I choose not to work for a few months I do not need to generate significant revenues to cover my business costs. I have access to a wide variety of work. I even undertake some very large engagements as I have a network of trusted colleagues, and we work together often to deliver larger engagements than a single consultant can manage. At the other extreme are the major consulting companies. If you have little experience, are a recent graduate or like to combine consulting with a corporate culture these are the organisations for you. The big consultancies can be attractive places to work. For example, they tend to give great opportunities for professional development, international working and arguably reduce your personal risk as you have teams of people around you also helping to win and deliver engagements. Additionally, the larger firms often win massive projects which may require leadingedge thinking and techniques, although on the largest projects you can feel like a cog in the machine rather than a real consultant. If you become a senior manager (or partner) in such organisations the rewards can be high. But it does mean all the baggage that comes with corporate life such as annual appraisals, fitting in with company culture and worrying about things like brand risk. Big consultancies are also notoriously political environments. Some are focused on people who fit their specific organisational culture, which can give the consultancy a very defined feeling that will not suit everyone. Companies offering a portfolio of services beyond consultancy provide a large variety of career options. However, if your firm is not purely a consultancy, there is always the tension over how independent the consulting advice is and whether it is really just a sales channel for other services. Some outsourcing firms have very successful consulting divisions, but there is always a doubt in some clients' minds as to whether the consulting is impartial advice or a funnel to win outsourcing contracts. Whilst I am happy not to work for a large firm any more it is fair to say that I probably could not do what I do now had I not learnt what I did working for the major consultancies I was employed by. It is by no means a bad place to start. There are many smaller consultancies, which offer a compromise between the complete self-sufficiency of the sole trader and the corporate hierarchies of the larger firms. Some of the smaller consultancies are industry leaders in specific consulting niches. For instance you can find consulting firms who specialise solely in financial regulation, telecommunications, customer services or cost control in manufacturing. If you have a particularly focused specialisation there may be a firm for whom you are a perfect fit. What is a good consultant? By this point you know what a consultant is, why you might want to consider it as a profession and whether you will make any money. In this final section I want to consider what makes a good consultant. Much of this book is taken up with giving advice on how to be a good consultant; this short section is concerned with what would be assessed as a good consultant. When I told a friend of mine, who is a successful and experienced consultant, about this book he responded with the comment that there is little to write. He said the book would only be about 10 pages long, but then went on to advise that I should not write a book, but a haiku! The truth behind this jibe is that it is qUite simple to define what a good consultant is - but most of this book is about how to achieve this rather than defining it. My poetry skills are limited, so I will stick to prose rather than the haiku. A good consultant: continuously adds value to clients commensurate with his or her fees There is a significant difference between being good at something and being a good consultant. There is an old joke, aimed rather unfairly at teachers, saying: those who can, do; those who can't, teach. This joke can be extended to become: those who can, do; those who can't, teach; and those who can't teach, consult. The joke for teachers is unfair, but it hides an important truth - there is a difference between being good at something and being a good teacher. As many students will attest, being a good university lecturer is quite a different skill from being a brilliant academic. I am sure we have all experienced the giant brain who cannot explain anything, and the person with a nominally lesser grasp who explains it very well. While most teachers are perfectly capable of doing, that is not what they are employed for - they are employed to impart and embed knowledge and skills in their students. Whether or not they can actually 'do' is to some extent irrelevant. It is similar for consultants. There are many advantages in having management experience, but consulting is not about managing. Equally, having been a great manager is an advantage for consulting, but it does not guarantee that you will be a successful consultant. From your perspective you are a good consultant if you achieve your personal objectives through consulting. I cannot tell you what your personal goals should be, and the rest of this book is about how you can continuously add value for your clients. However, you may wonder whether you have the right type of personality to succeed as a consultant. There is no single personality type who makes the best consultant, but I will pick on a few factors which I think are important. Firstly, as a consultant you should be a people person. It is not necessary to be a natural extrovert, but you must be happy engaging with others. You will constantly be working and interacting with people, and if this does not excite you then consulting is not for you. Next, you should be flexible and adaptable. Client needs and expectations vary enormously, and you need to flex to the situation. It may surprise some people, but it also helps if you are not status conscious. Although you may end up as a hugely successful consultant earning much more than most of your clients, when you are on a client's site you are just a consultant doing a job for them. Consultants must be orientated to resolving problems. A client has engaged you to help; there are many forms this help can take, but all of them must result in resolving a client's problems. Next, whilst a consultant is there to help, they must not be over hasty in determining solutions. You must have the personality that wants to solve problems properly, rather than resolve the most apparent symptoms. You want to be like the doctor who finds out why a patient has spots rather than the one who just gives a cream to make them less itchy. Finally, you must be someone who listens. To be objective and to provide a diagnosis that is most helpful to the client requires listening and assessing the situation. Solutions must be tailored to the specific context. There are many other factors which influence your ability to be a great consultant, but the above are critical. The prerequisites for selling consultancy What are the prerequisite conditions which must be met for it to be possible to sell consultancy? have identified eight basic prerequisites which must be present in order to sell a consulting engagement: 1. There is a client. 2 The client has a currently unfulfilled need. 3 The client believes that they require help to resolve this need. 4 The client knows about you and your services. 5 The client perceives that you are capable of fulfilling this need. 6 You (or someone else acceptable to the client) are available to fulfil the engagement. 7 The client has a budget/finances to pay for your services. 8 The client has authority to spend the budget/finances. Without over analysing these prerequisites let's quickly review them. The first prerequisite is the most obvious, so obvious it can seem like it need not be stated. Hidden in the obviousness is an unchallenged assumption. The assumption is: if I have business know/edge and skills I can be a successful consultant. Documenting prerequisite 1 may appear unnecessary, but I know of consultants with all sorts of esoteric and interesting skills, for which there is no client. So, unsurprisingly, they do not find work. They moan and ponder about how to increase their skills further, thinking 'surely then I will gain work', without noticing that there are many more poorly qualified, but highly successful consultants. Before you spend time analysing and perfecting your service line, check that there is likely to be some form of client. Whatever skills or service line you have - no client, no income! When there is a potential client, to sell a service, they must have a currently unfulfilled need, and a belief that this need can be fulfilled by consulting. Unfulfilled needs exist aplenty in business. Ask most managers if there is anything they would like help with or problems to be rid of, and you will soon get a very long list. This list radically shortens when you ask them which of these problems is a candidate for resolution by a consultant. Let us suppose we have met the first three prerequisites. There is a client with an unfulfilled need that they accept they need help fulfilling. We are getting closer to the possibility of selling an engagement. Prerequisites 4 and 5 relate to you personally. The client must know about you. A client cannot buy goods and services they know nothing about. This is a common problem in consulting. If you happen to be working for a major international consultancy most potential clients will have heard of you - although even then, they may well not know your full range of services. On the other hand, if you are a small consultancy or an independent consultant most of your potential clients have no knowledge of your existence. Clients not only need to know about you, but to even get a sniff of real work you need to be perceived as potentially capable of fulfilling their needs. Simply put: are you a known and credible supplier? Unlike the first three prerequisites, prerequisites 4 and 5 are largely in your control and depend on your marketing and networking skills. If you are in a situation in which the answer to this question is no, the follow up is obvious: what will you do to become a known and credible supplier? (See chapters 3, 5 and 9.) Of course, to perform an engagement you, or someone else you can put forward who meets prerequisites 1 to 5, need to be available to do the work. Consultants use the term availability to refer to time when they are available to work on a live engagement - i.e. time when the consultant is not working on another engagement, busy with bUSiness development, sick or on holiday, etc. Availability is difficult to predict. Engagements don't just end on a fixed date, and the time it takes to sell a consulting engagement does not usually neatly align with the time it takes to complete whatever else you are working on. Get your timing wrong and you may win some work when you are still busy with another client. You do not actually need to be available to perform the engagement to sell the engagement to a client. It is possible to sell work without being available to deliver it, but unless you can make yourself available quickly, the sales activity is a waste of your and your client's time. Prerequisites 7 and 8 relate to money. You are a commercial business, and therefore are only going to work if there is access to finance to pay your fees. There are obvious situations in which this is not going to be true; for instance, companies going bankrupt or organisations with very restricted budgets. Commercially, these are to be avoided. As an exception, you may choose to take on some pro bono work for a good cause. I say as an exception not because I want to put you off undertaking pro bono work, but for the simple reason that unless you are privately wealthy it can only be a small proportion of your work or you will not stay in business long. A more common problem is not that an organisation has no money to pay your fees, but that the individual manager who is your potential client has no direct access to a budget or no ability to influence someone else to spend. It is always useful to ascertain early in your client negotiations if a client has sufficient money which they are authorised to spend. In this section I have summarised the core prerequisites for a client to buy consultancy. Without these prerequisites being in place, no matter how hard you try, there will be no sale. But there is another side to the equation. Not the client perspective, but yours. Although it is not a prerequisite for buying, it should be a prerequiSite for selling - that the client can provide you with whatever you need to do your work. Few consulting engagements can be undertaken without any client support. For instance, you may need access to human resources, almost always require some data and information, and will always need time to complete your work. Clients may not want or be able to fulfil all you prerequisites. As a consultant you must be flexible and often ingenious in finding ways to complete engagements without all the ideal things you think you need to do your work. However, whilst you may be able to compromise there are some minimal prerequisites that must be met. If the client cannot fulfil these prerequisites for the work, the engagement should not progress impediments to selling consultancy Here are some key obstacles to sales: You may not convince your client that you are the right choice. Clients will not just select you - you have to overcome the obstacles of their natural skepticism and doubt. Skepticism of your skills will be reinforced if there is bad chemistry between you and the client. You are often in competition, and each credible competitor is an obstacle to your sale. A key activity in a competitive situation is to extract the client's decision- making criteria for selecting a consultant. Your needs and the client's may not match. A client does not just have a need to buy, but you must have a desire to sell. There is another more complicated reason why an opportunity may never become a sale. Client needs can change. During the process of engaging and selling to a client it is not unusual for needs to change. This is particularly frequent if the sales process is protracted. The reasons are many and varied. On numerous occasions, I have seen consultants (including, on reflection, myself) making epic efforts to gain a sale, only to end up wasting time as one or more of these prerequisites was not met. This cannot always be prevented, but frequently the wasted effort is avoidable. The client's explicit needs for buying consultancy ' This is the traditional reason for buying consultancy. Variations on this theme include: - I want a bit of fresh creativity, innovation or new ideas which I cannot find in my existing employees. - I need some facilitation or workshops to solve a problem. – I want access to some specific IP (intellectual property), tools or techniques that a consultant has. A client has a new or ongoing initiative/project but does not have all the required resources. They think: 'I will ask a consultant to fill a role on the project.' Depending on the precise type of work this may be truly consulting, but more often it is really contracting A client has some operational work and the normal manager is away, unavailable or still needs to be recruited. A client has too much to do, juggling too many tasks at once and needs a little bit of relief or else risks dropping one of the balls. Occasionally, a client may be told to get some assistance from a consultant. This instruction may come from a supportive or frustrated senior manager telling a subordinate how to fix something that should have been resolved long ago. Finally, a need can be created. Consultants with time to spare and a bit of creative insight can come up with all sorts of appealing and exciting service lines Occasionally, a client will listen to a cold sales pitch and be interested enough to buy your service. Hidden grounds for buying consultancy What a client tells you, when discussing their needs for consultancy, may provide a clear and complete picture of why they are considering your services. However, this is unusual. Most people have other grounds that they do not divulge. Irrespective of the situation, you will usually start a consulting engagement with an incomplete and sometimes incorrect understanding of why the client is engaging you. There are many other motivations for employing consultants which will not be immediately apparent when you are first engaged. Risk reduction: a client does not know how to overcome a problem, does not have confidence to so, or thinks there's too much risk in doing it themselves. These are perfectly valid grounds for engaging consultants. The client has tried already, but has failed or is struggling to overcome a problem. Rarely will a client admit this directly to you, but it is important to try and ascertain if this is the case! The client wants to gain buy-in to an idea or project. A client can simply want something confirmed that they already know. Clients sometimes engage a consultant because they need to be seen to be doing something, not because they actually want anything done. Clients have many stakeholders they need or want to keep happy. These include more senior managers and external stakeholders like regulators. According to the ILO these purposes are: Achieving organizational purposes and objectives. Solving management and business purposes. Identifying and seizing new opportunities. Enhancing learning. Implementing changes. Who is your client? New consultants often talk about their client as if it is always absolutely clear who the client is, and also use the term client and the name of an organisation interchangeably. As in 'my client is XYZ Corporation'. Your fees.will be paid by XYZ Corporation. XYZ is the client organisation, but you cannot interact, advise or have a relationship with an organisation. Your client is one or more human beings. There are many situations in which there is clearly one client, and you can be sure that the interests of the client and the client organisation are aligned, but often this is not clear cut. This can result in two related problems: firstly, the difficulty of identifying the true client, and secondly, conflict in the views of different stakeholders and clients. You need to know who your client is because the client is the person (or group) who your consultancy is aimed at. The client is the person who will judge whether the consultancy has been successful or not. If you do not clarify who the client is you may never be judged to have completed your work successfully. A different problem is that without a clear-cut client different people in an organisation can legitimately ask you to do all sorts of work. Not having an unambiguous and single client can be compared to the situation in which as an employee you do not know who amongst a group of managers is your boss. One reason for this lack of clarity is that there are often multiple stakeholders in a client organisation who have different views and interests in a particular engagement. Although it is theoretically meaningful to differentiate specifically between a client and other stakeholders, in reality the boundaries are not always clear cut. There can be a wide variety of interested parties in any consulting engagement. On some engagements this is a minor issue. On others, different clients/stakeholders can be in direct and explicit conflict over the needs and direction of a consulting engagement, with the consultant left like some UN arbitrator in the middle trying to resolve the dispute with limited resources. The conflict may be explicit, but sometimes it is hidden, which is worse, as the consultant can progress the engagement with one understanding and only in the latter stages when feeding back to one client comes against another stakeholder who denigrates the work. Another situation arises when the person who engages you, who you take to be the client, is actually hiring you under the direction of a more senior manager. The senior manager is really the client. The person who engages you may not accurately represent the true client's needs. This can lead to all sorts of misunderstandings and problems. Different stakeholders are quite likely to have different views on what is required from an engagement, and even how the work should be approached. Some stakeholders may think you are the ideal candidate to perform an engagement, others may doubt your suitability to do the work. Various stakeholders will have all sorts of different decisionmaking criteria. Ideally, you need to clarify all of this. Another source of confusion is the difference between a client and an organisation. A client is a tangible person. You can speak to them and through dialogue get an understanding of their wants and desires, needs and Wishes, interests and foibles. An organisation is an abstract entity, and if such an entity can be said to have interests you can only determine them indirectly - by speaking to the staff and managers of the organisation. Problems arise because the interests of the individuals in the organisation probably never align with those of the organisation. Even if a member of an organisation's staff is trying to be objective and ignore their own interests, they will be constrained in achieving this by their biases, inherent assumptions and lack of full understanding of what the interests of an organisation are. One reason for clear and simple vision and mission statements in organisations is that all staff can then determine what the interests of the organisation are and are not. We are therefore in a situation of imperfect information and limited consensus. One of the tasks a consultant initially has in any engagement is not only to understand the client's wants and needs, but to clarify who the client is. Ideally there is one clear client who has the remit and authority to describe exactly what you should do. In practice, this is not always achieved. Power in organisations does not always fit the organisational hierarchy, and you will not always be so lucky as to have one main stakeholder in your work. Why is this a problem? Because a lack of clarity over who the client is, and no real understanding of the client's need and desires, leads to all sorts of other difficulties. Your engagement may be perceived as a failure if you please one person you perceived as a client, only to find someone else - who is really the client - is displeased. You cannot complete an engagement successfully without understanding client needs, which you won't do if you have not identified the client correctly. You may have difficulty finishing your work as you try to satisfy more and more client stakeholders. If you are working to a fixed fee, trying to satisfy everyone causes you to lose money. There are many variations of these sorts of difficulties. How can you solve this issue? There is no foolproof way to resolve it in every situation. Your role as a consultant may be explicitly to help reach consensus between all stakeholders. But it will not always be, and even if you are there to drive consensus your role can never be to sort out all the differences of opinion in an organisation. However, you do have to achieve at least a sufficient consensus to be able to complete your engagement effectively How can you solve this issue? There is no foolproof way to resolve it in every situation. Your role as a consultant may be explicitly to help reach consensus between all stakeholders. There are five main steps to achieving this: 1. Openly discuss the issue with whoever first engages you, and try to get them to support you in identifying and resolving any differences of opinion. 2. Write down your understanding of the situation in your proposal. Then if things are not as they appeared to be, you at least have a document you can point to with your understanding as agreed with the client. However, for some sensitive needs this is not possible. 3. Understand who might be clients and stakeholders in the work, and then explore and analyse the specific situation, identifying true clients and exploring their needs. 4 Ideally, identify one primary (or 'real') client who will resolve any conflicts and arbitrate in any disputes with other stakeholders. 5 Take a commonsense check. When you do have an understanding of the different client and stakeholder needs, do they form a coherent and consistent set? Who might your client be? This will vary from situation to situation, but the choice of the person who is your client starts by considering the person who first engages you. Typically you will be approached by an individual about the work the client organisation wants performed. This person may or may not be the 'real' client. this person the client interface. This senior manager is the real client. Ideally, you want to develop a direct relationship with this person, as they are the one who really wants the work done and are likely to be the judge of its success. This is the underlying client. The underlying client is important, as in the end this is the person or group your real client mostly responds to. Whoever authorises your bill is the financial client. The financial client is important as of course you want to get paid! A typical set of clients is shown in Figure 2.1. The solid lines represent typical direct relationships relevant to the engagement. The dashed lines represent other possible relationships relevant to the engagement. When conSidering this set of clients and stakeholders the following points should be taken into account: The client is always a person. You may be paid from a large corporation's bank account, but you are engaged by, interact with and take instructions from an individual or group. An individual or group responds to your advice and accepts your invoices. For many reasons we may say 'my client is XYZ Corporation', but in reality it is always a person. Ideally there is one client, which is sometime achievable, but there will always be more than one stakeholder. The best situation is to understand and fulfil the needs of the client and all relevant stakeholders. Some of the problems that arise from having multiple clients/stakeholders will create issues for you, but not your real client. There may be ethical issues associated with multiple clients with different interests. After ale if there are multiple interests, who actually represents the organisation? There is a potentially complex relationship with client staff. Finally, if you are working for a large consulting company your stakeholders may include people who are within your own organisation or other bodies. These people can make requests at the most difficult time during an engagement. For instance, there will be people responsible for the quality, risk and brand of a consulting company. Even if the client is happy with the work, such managers in the consulting firm may not be if it is not of sufficient quality or risks the firm's reputation. There will be staff concerned with utilisation. Utilisation is how consulting firms make money. Consulting firms are always trying to improve their knowledge and IP development. Consultancies view most engagements as a potential opportunity to increase their IP and knowledge. Finally, outside the consulting firm itself there are stakeholders such as professional bodies, who have some influence on how the work is performed and any standards associated with it. These additional stakeholders can make the situation more complex. This increase in complexity is shown in Figure 2.2. 1.4 The consulting process During a typical consulting intervention, the consultant and the client undertake a set of activities required for achieving the desired purposes and changes. These activities are normally known as “the consulting process”. This process has a clear beginning (the relationship is established and work starts) and end (the consultant departs). Between these two points the process can be subdivided into several phases, which helps both the consultant and the client to be systematic and methodical, proceeding from phase to phase, and from operation to operation. Entry This is a preparatory and planning phase In this initial phase, it can also happen that an assignment proposal is not prepared to the client’s satisfaction and no contract is agreed, or that several consultants are contacted and invited to present proposals but only one of them is selected for the assignment. Diagnosis The second phase is an in-depth diagnosis of the problem to be solved. the consultant and the client cooperate in identifying the sort of change required, defining in detail the purposes to be achieved by the assignment, and assessing the client’s performance, resources, needs and perspectives Fact-finding and fact diagnosis often receive the least attention. Conversely, fact-finding has to be kept within reasonable limits, determined by the nature and purpose of the consultancy. Action planning The third phase aims at finding the solution to the problem. The consultant can choose from a wide range of techniques, Action planning requires imagination and creativity, as well as a rigorous and systematic approach A significant dimension of action planning is developing strategy and tactics for implementing changes, in particular for dealing with the human problems that can be anticipated, and for overcoming resistance to, and gaining support for, change. Implementation Implementation, the fourth phase of the consulting process, provides an acid test for the relevance and feasibility of the proposals developed by the consultant in collaboration with the client. The changes proposed start turning into reality. This is an issue over which there has been much misunderstanding. Many consulting assignments end when a report with action proposals is transmitted, i.e. before implementation starts. Probably not more than 30 to 50 per cent of consulting assignments include implementation. Unfortunately, the decision to terminate an assignment after the diagnostic or action-planning phase often does not reflect the client’s assessment of his or her own capabilities and determination to implement the proposals without any further help from the consultant Termination The fifth and final phase in the consulting process includes several activities. The consultant’s performance during the assignment, the approach taken, the changes made and the results achieved have to be evaluated by both the client and the consulting firm. following list also captures for many individuals and businesses what management consultancy is about: The provision of information: The provision of specialist resources : These may only be needed in the short -term and as such full -time recruitment to undertake this role would not be cost effective. In addition this may also offer opportunities to the client for the transfer of such skills to its own staff if commercially viable. The establishment of business contacts and linkage: s in order to assist in promoting the client ’s organization in new markets. The provision of expert opinions: to enable line management to make decisions on what to do. Undertaking of diagnostic analysis with sophisticated tools: not available to a client or their subordinates. Developing practical action plans: based on “bestpractice” and wider pan -industry experience. Improvement of systems and methods again: with the ability to draw upon a wider knowledge base than resides within the client ’s organization. Training and development of management and staff to help them make more effective decisions relative to the business objective and long -term strategic direction. The provision of personal counselling, coaching, mentoring and training to support the development and retention of key knowledge workers. Implementation of difficult or unpopular decisions with responsibility for them; this may also include providing support to others through difficult situations. The ability to act as a messenger and carry information that is not moving up the organization by the normal communication route. This often includes easier access to senior managers and opportunities to provide independent or impartial advice. The ability to draw upon a wider range of established, tried and tested approaches as a basis of tailoring these for bespoke situations to suit client requirements. The ability to undertake work which requires objectivity and complete independence, for example, to gain acceptance to introducing a change that is un - palatable or difficult to achieve. The ability to take the pressure off the client by taking on the role of “scapegoat” for the introduction of new methods, systems and processes, etc. The consultant’s independence 2. A consultant must be in a position to make an unbiased assessment of any situation, tell the truth, and recommend frankly and objectively what the client organization needs to do without having any second thoughts on how this might affect the consultant’s own interests. Technical independence Financial independence Administrative independence Political independence. Emotional independence PROTO COL INTRODUCTION MODELS OF CONSULTATION SUMMARY REFFERENCE Different types of consultant INTRODUCT ION Edgar H. Schein developed the concept of process consultation and wrote a book about its in various15client relationships after of years experience managem in and ent organization consulting. development He combines a research and teaching interests in adult socialization and career development with his applied interests in helping organizations to be more effective in accomplishing their tasks with and through people. He a former Professor at the MIT Sloan School of Management. MODELS OF CONSULTATION ✓ THE EXPERT MODEL ✓ THE DOCTOR-PATIENT MODEL ✓ PROCESS THE EXPERT MODEL The expert (or telling and selling) model of consultation assumes that the client purchases from the consultant some information or expert service that she is unable to provide for herself. ✓ The buyer, usually an individual manager or representative of some group in the organization, defines a need and concludes that the organization has neither the resources nor the time to fulfill that need. She will then look to a consultant to provide the information or the service. ✓ The client expects expert help and expects to pay for it but do not get involved in the process of consultation itself. THE EXPERT MODEL ✓ The extreme pure model is the television repairman or auto mechanic. ❖ Other examples: Purchase of a market research; ❖ The hiring of a consultant to develop a computer program for a given ❖ problem; The hiring of a lawyer to determine whether a given course of action will run into difficulty or not. ✓ The essence of the message from the client to the consultant is “here is the problem, bring me back an answer and tell me how much it will cost.” ✓ Psychologically, the essence of this relationship is that the client gives away the problem temporarily to the helper, which permits the client to relax, secure in the knowledge that an expert has taken it on and will come up with a solution. ✓ This model is, almost by definition, totally content oriented. THE EXPERT MODEL- ASSUMPTIO ✓ Whether or not the manager has correctly diagnosed his own needs NS ✓ Whether or not he has correctly communicated those needs to the consultant ✓ Whether or not he has accurately assessed the capabilities of the consultant to provide the information or the service ✓ Whether or not he has thought through the consequences of having the consultant gather such information or the consequences of implementing the changes that the information implies or that may be recommended by the consultant ✓ Whether or not there is an external reality than can be objectively studied and reduced to knowledge that will be of use to the client THE EXPERT MODEL ✓ The frequent dissatisfaction with consultants and the low rate of implementation of their recommendations can easily be explained when one considers how many of the above assumptions have to be met for the purchase model to work effectively. ✓ It should also be noted that in this model the client gives away power. ✓ The consultant is commissioned or empowered to seek out and provide relevant information or expertise on behalf of the client; but once the assignment has been given, the client becomes dependent on what the consultant comes up with. ✓ Much of the resistance to the consultant at the later stages may result from this initial dependency and the discomfort it may arouse consciously in the client. THE EXPERT MODEL- NOTICE ✓ This model of consultation is appropriate when clients have; I. Diagnosed their needs correctly; II. III. Correctly identified Done a good job ofconsultant capabilities; communicating what the problem they are actually trying to solve; IV. Thought through the consequences of the help they have sought. ✓ This model is “client intensive” in that it puts a tremendous load on the client to do things correctly if the problem is to be solved. ✓ If the problems are complex and difficult to diagnose, it is highly likely that this model will not prove helpful. THE DOCTOR-PATIENT MODEL ✓ The core of this model is that the client experiences some symptoms that something is wrong but does not have a clue as to how to go about figuring out what is wrong or how to fix it. ✓ The diagnostic process itself is delegated completely to the consultant along with obligation to come up with a remedy. ✓ The client becomes totally dependent upon the consultant until such a time as the consultant makes a prescription, unless the consultant engages the client in becoming more active on his or her own behalf. ❖ A manager may detect symptoms of ill health, such as dropping sales, high numbers of customer complaints, or quality problems, but may not know how to make a diagnosis of what is causing the problems. THE DOCTOR-PATIENT MODEL: ASSUMPTIONS ✓ That the client has correctly interpreted the symptoms and the sick “area.” ✓ That the client can trust the diagnostic information that is provided by the consultant. ✓ That the “sick” person or group will reveal the correct information necessary to arrive at a diagnosis and cure, i.e., will trust the doctor enough to “level” with him or her. ✓ That the client has thought the consequences, i.e., is willing to accept and implement whatever prescription is given. ✓ The patient/client will be able to remain healthy after he doctor/ consultant leaves. THE DOCTOR-PATIENT MODEL: NOTICE ✓ This model puts even more power into the hands of the consultant in that she diagnoses, prescribes, and administers the cure. ✓ The client not only abdicates responsibility for making his own diagnosis and thereby makes himself even more dependent on the consultant, but assumes, in addition, that an outside consultant can come into the situation, identify problems, and remedy them. ✓ This model is of obvious appeal to consultants because it empowers them and endows them with X-ray vision. THE DOCTOR-PATIENT MODEL: NOTICE ✓ Providing expert diagnoses and prescribing remedial courses of action justify the high fees that consultants can command and make very visible and concrete the nature of the help that they claim to provide. ✓ In this model the report, the presentation of findings, and the recommendations take on special importance in identifying what the consultant does. ✓ For many consultants this is the essence of what they do, and they feel that they have not done their job until they have made a thorough analysis and diagnosis leading to a specific written recommendation. PROCESS CONSULTATION Process Consultation (PC) is the creation of a relationship with the client that permits the client to perceive, understand and act on the process events that occur in the client’s internal and external environment in order to improve the situation as defined by the client. *Edgar H. Schien. Process Consultation Revisited – Building the Helping Relationship. 1999, Addison-Wesley Publishing, Inc. PROCESS CONSULTATION- FOCUS The focus of PC is to build a relationship with your client and help them figure out what to do: 1. Build a Relationship Permit the consultant and client to deal with reality Remove the consultants areas of ignorance Acknowledge the consultant’s behavior as being always an intervention All of the above in the service of giving the client(s) insight into what is going on around them. 2. Help the client figure out what they should do about themust Clients situation be helped to remain proactive Clients must own the problems (“monkey always remains on the client’s back,” ) Clients know the true complexity of their situation and they know what will work in the culture where they live PROCESS CONSULTATION- KEY ASSUMPTIOS 1. That the nature of the problem is such that the client not only needs help in making an initial diagnosis but would benefit from participation in the process of making that diagnosis. 2. That the client has the constructive intent and some problem solving ability. 3. That the client is ultimately the only one who knows what form of solution or interpretation will work in his or he own situation. 4. That if the client selects and implements his or her own solution, the client’s problem- solving skills for future PROCESS CONSULTATION- PRINCIPLES 1. Always try to be helpful 2. Always stay in touch with the current reality 3. Access your ignorance 4. Everything you do is an intervention 5. It is the client who owns the problem and solution 6. Go with the flow 7. Timing is crucial 8. Be constructively opportunistic with confrontive interventions 9. Everything is data: errors are inevitable – learn from them 10.When in doubt, share the problem PROCESS CONSULTATION- INTERVENTION The above assumptions may not always hold; but when they do, it is essential to approach the helping situation in the PC mode. ✓ Clients often do not know what is really wrong and need help in diagnosing what their problems actually are. But only they “own” the problem. ✓ Clients often do not know what kinds of help consultants can give to them; they need to be helped to know what kinds of help to seek. Clients are not experts on helping theory and practice. ✓ Most clients have a constructive intent to improve things, but they often need help in identifying what to improve and how to improve it. PROCESS CONSULTATION- INTERVENTION ✓ Most organizations can be more effective than they are if their managers and employees learn to diagnose and manage their own strengths and weaknesses. No organizational form is perfect; hence every form of organization will have some weaknesses for which compensatory mechanisms must be found. ✓ Only clients know what will ultimately work in their organizations. Consultants cannot, without exhaustive and time consuming study or actual participation in the client organization, learn enough about the culture of an organization to suggest reliable new courses of action. Therefore, unless remedies are worked out jointly with members of the organization who do know what will and will not work in their culture, such remedies are likely either to be wrong or to be resisted because they come PROCESS CONSULTATION- INTERVENTION ✓ Unless clients learn to see problems for themselves and think through their own remedies, they will be less likely to implement the solution and less likely to learn how to fix such problems should they recur. The process consultation mode can provide alternatives, but decision making about such alternatives must remain in the hands of the client because it is the client, not the consultant, who owns the problem. ✓ The ultimate function of PC is to pass on the skills of how to diagnose and constructively intervene so that clients are more able to continue on their own to improve the organization. In a sense both the expert and doctor-patient (doctor) models are remedial models whereas the PC model is both a remedial and a preventive model. The saying “instead of giving people fish, teach them how to fish” fits this model well. SUMMA RY ❑ Each model has its own specific assumptions that need to be comprehended by the clients before any consultation. ❑ The relevance of the process consultation that in all situations that involve personal, group, or organizational components, feelings, values, and cultural elements must be indentified. ❑ Any given consultant inevitably ends up using all three models at different times and with different clients. ❑ It is upon the consultant, therefore, to obtain enough insight into his or her own behavior to know which model he or she is using at any given time and to assess the appropriateness of that model to the situation. ❑ The ideal consultant would be flexible enough to move across the three models. REFERE NCE Edgar H. Schien. Process Consultation Revisited – Building the Helping Relationship. 1999, Addison-Wesley Publishing, Inc. Schein, E. H. Process Consultation, Reading, Mass: Addison- Wesley, 1969. The different types of consultant are shown in Figure 1.2 where the consulting activity can take either an advisory or an executive role, and is undertaken by external or by an organization’s own in-house consultants. Role A is the conventional notion of an external consultant who provides specialist advice on contract for a time to clients. Role B has its origin in the construction and IT industries particularly where a project manager from an outside organization has responsibility for delivering an assignment but acts as a consultant to the clients and as a line manager in their own organization. Role C has a full -time executive to act as a consultant to colleagues in a coaching and supporting way. Role D employs internal consultants for their specialist advice such as health and safety, finance, marketing, legal, etc. Examples of internal consultancy areas of work may include IT, finance and increasingly HRM where they may be involved in performance improvement or implementing change programmes. Whilst some may operate at a strategic level, this is a real exception as at this level the senior management prefers paying for the external perspective, a service not so readily provided by internal consultants. This also offers the board a level of privacy and comfort as an external mentor or advisor can be seen as a “critical friend ”. It is noted that at this level credibility, status, internal politics, legacy issues and reputation are the main challenges facing internal consultants and it is clear that internal and external consultants wield different amounts of power and senior level influence. Who is good Internal or External Naturally, there are advantages and disadvantages in using internal consultants, and whilst the most obvious benefit is that they inevitably cost much less that external consultants this perception cannot be treated in isolation as further consideration will recognize that internal consultants also have other costs not immediately considered when making such a statement, for example the cost of holidays, sickness leave, training, pension and health care provisions and the cost of any unproductive time Individuals within the consultancy profession fall broadly into two groupings, operational and advisory, each of which has a further subdivision, process and functional Operational consultants These are the people who are prepared to roll up their sleeves and help get the job done. Indeed, they will often do the whole job from start to finish. Each is an extra pair of, hopefully expert, hands. The important thing about them is their willingness to become involved. Frequently small companies have little choice other than to use operational consultants – where human resources are limited, nothing may be done unless the consultant buckles down to do at least some of it. Advisory consultants In an ideal world all of us would be advisory consultants. Those of us who are able to go into a client’s premises, look around for a while and make a pronouncement that will make us a very comfortable income while being worth millions to our delighted clients are to be envied. Process consultants Process consultants are a little like caddies at a golf tournament. We carry in our minds a comprehensive range of clubs and we have specialized knowledge of the courses and their difficulties so we can advise meaningfully on what wood or iron to use in almost any circumstance. Functional consultants There are two types of functional consultant: the industry specialist and the role expert. The industry specialist may know all there is to know about the automotive trade, textiles, banking or whatever. The specialism may be narrow – forecourt petrol sales – or broad – the finance sector. It may be a part of a sector – heavy commercial vehicles or parts and accessories – or it may be anything to do with transport – air, road, rail or water. No matter how deep or broad the knowledge you need you will find it, but to find it you must understand what you want. Having looked at individual consultants it is also clear that consultancy firms can themselves be categorized into a number of specialist areas such as: Generalist, these are the larger firms offering a wide range of services from strategy consulting and human resources through to IT and outsourcing on a global basis. Many of these firms grew out of financial services or IT companies. Strategy consultants offering strategic advice to companies on a project -by-project basis. Human resource consultants offering specialist HR advice. Information technology consultancy firms, which offer specialist IT advice such as defining information needs, systems analysis and design, and making hardware evaluations. Financial consultants offering specialist advice including the installation of budgetary control systems, profit planning and capital and revenue budgeting. Niche firms, these are a result of consultants leaving the larger firms and setting up their own consultancy firms in a particular sector or offering unique specialist advice. THE CONSULTANT–CLIENT RELATIONSHIP The consulting process involves two partners – the consultant and the client. In theory it should be easy to put the consultant’s expertise to work on the client’sproject, since it is fair to assume that both parties will do their best to achieve the same purpose. The reality is infinitely more complex. The consultant remains external to the organization, someone who is supposed to achieve a valid result in the client organization without being part of its administrative and human system. Even an internal consultant – an organization’s employee – is external from the viewpoint of organizational units where he or she is supposed to intervene. Quite independently of its technical relevance and quality, the consultant’s advice may or may not be understood and accepted by the client. The consultant can upset people and hurt their feelings in many different ways. Rejection can take many forms. The history of consulting contains thousands of excellent reports that have been buried in managers’ desks and never implemented, although they were formally accepted. Many consultants terminate their assignments with feelings of bitter-ness and frustration. They are absolutely sure that they have provided excellent advice, yet the clients do not follow it. This underlines the critical importance of creating and maintaining an effective consultant–client relationship. 3.1 Defining expectations and roles To begin with, the client and the consultant may look differently at both the expected outcome and the ways of carrying out the assignment. The client may have only a vague idea of how consultants work and may be slightly suspicious – possibly he or she has heard about consultants who try to complicate every issue, require more information than they really need, ask for more time in order to justify longer assignments, and charge exorbitant fees. The client may be approaching the consultant with mixed feelings (see box 3.1). But even if there is no a priori suspicion, and no fear on the client’s side, there is a risk of misunderstanding as regards objectives, end results, roles, relationships and other aspects of a consulting assignment. Joint problem definition First, the reason for which the consultant was brought in needs to be well defined. A manager who wants to call for a consultant’s help should not merely recognize a need for such help, but define the problem as he or she sees it, as precisely as possible. In many organizations, top management would not even consider using consultants unless presented with a clear description of theproblem and the purpose of the consultancy. Before accepting the assignment, the consultant must be sure that he or she can subscribe to the client’s definition of the problem. Except in the most simple and clear cases, the consultant wants to be able to reach his or her own conclusion as to what the problem is and how difficult its solution might be. There are many reasons why the consultant’s definition of the problem might differ from the client’s. Frequently managers are too deeply immersed in a particular situation to be able to assess it objectively, or they may have created the problem themselves. They may perceive the symptoms but not the real issue. They may also prefer the consultant to “discover” certain significant aspects of the problem. Comparison of the client’s and the consultant’s definition of the problem lays down the basis of sound working relations and mutual trust for the duration of the assignment. It should be discussed. Both the consultant and the client should be prepared to make changes to their initial definition of the problem and to agree on a joint definition. But this first joint definition should not be considered as final. Once the assignment has started, detailed diagnostic work may uncover new problems and new opportunities, requiring a redefinition of the situation. Results to be achieved Secondly, the consultant and the client should clarify what the assignment should achieve and how this achievement will be measured. This may require an exchange of views on how each party regards consulting, how far the consultant should continue working on an agreed task (possibly exceeding the scope of that task), and what his or her responsibility to the client is. As mentioned in section 1.4, there is often a misunderstanding about the consultant’s role in implemen-tation. The consultant may be keen to participate in it, but the client may be used to receiving reports with action proposals, and to deciding on implementation only after the consultant has left. If possible, the consultant will often try to be involved in implementation. If cost is what worries the client, the consultant’s presence during implementation can be a light one (see also Chapter 10). The consultant’s and the client’s roles Thirdly, it is important to determine how the assignment will be conducted by the two parties: What roles will be played by the consultant and what by the client? What will be their mutual commitments? – Who will do what, when, and how? – Does the client want to obtain a solution from the consultant, or does he prefer to develop his own solution with the consultant’s help? – Is the client prepared to be intensely involved throughout the assignment? – Are there specific areas that the consultant should cover without trying to involve the client? And vice versa? Types of Clients The consultant needs to appreciate that there will be multiple stakeholders whether inside the organisation or external to it. Edgar Schein (1997) suggested that process consulting can be enhanced by an appreciation of the different types of clients involved. He suggested that the consultant interacts with a number of individuals within the client organisation and that the concept of the individual client may be problematic. Rather, the consultant interacts with a network of individuals who play subtly different roles. Contact clients Intermediate clients Primary clients Unwitting clients Indirect clients Ultimate clients Critical dimensions of the consultant–client relationship Different situations and client expectations lead to different definitions of the consultant’s roles and methods of intervention. Sections 3.4 and 3.5 will review a number of role models from which to choose. Nevertheless, even if situations, assignment strategies and consultant work methods exhibit considerable differences, all consultants and clients will try to establish and nurture relation-ships in which they can work together to achieve a common purpose. Three dimensions of these relationships are critical: collaboration, sharing of knowledge, and trust. These dimensions are essential in consulting and could be described as objectives to be pursued in order to make the relationship fully productive and satisfying to both sides.
