Management Consulting Indicates Best Practices Of The Industry Business Essay
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Published: Mon, 5 Dec 2016
“The provision to management of objective advice and assistance relating to the strategy, structure, management and operations of an organisation in pursuit of its long-term purposes and objectives. Such assistance may include the identification of options with recommendations; the provision of an additional resource and/or the implementation of solutions.” (Chartered Institute of Management Consultancy)
Management consulting indicates best practices of the industry, which helps the firms in improving their performance, through the analysis of current problems and development of plans for improvement. Consultancies may also provide technological implementation, strategy formulation, organisation’s structure change, management assistance, development of training skills, or operational improvement services. Management consultants generally bring their own, frameworks to guide or proprietary methodologies the identification of problems, and to serve as the basis for recommendations for more efficient or effective ways of performing business tasks. Companies hire the management consultants for a number of reasons, including gaining external advice and access to the consultants’ specialized expertise. Because of their exposure to and relationships with numerous organizations, consulting firms are also said to be aware of industry “best practices”, although the transferability of such practices from one organization to another may be limited or problematic.
The critical literature in particular has questioned how a non-codified body of knowledge like consultancy’ could become so apparently influential. The answering emphasis has been on the symbolic nature of consultant strategies and consultancy as a powerful system of persuasion. However, an emerging structural perspective has developed a rather different view, focusing on the limits of the industry discourse, and the constraints of a consultancy role defined largely by external forces. While it is useful to contrast the two perspectives – strategic and structural – they can also be viewed as complementary, and indeed a number of writers have been well aware both of the importance of consultant strategies and the context of consultancy work. (ROBIN FINCHAM, 1999).Since its inception consultancy industry was one of the fastest growing industries in the developed economies. In 1980 overall industry(world-wide) revenues were estimated to be $3 billion and in 1999 it had grown to around $60 billion(Kennedy Information,2000).After the recession triggered by the dotcom crash, it’s now growing very fast again-but in a market which has changed beyond all recognition. The whole consulting industry has been on a zigzag journey since days of the 1990s. Consultant’s fees are down, purchasing is centralized and more clients are ex-consultants who know all the tricks of the industry. It’s a tough environment in which good personal qualities are no longer enough-consultants need trusted clients behind them, helping them deliver results. This new journey through the new consulting firms looks at how leading consulting firms worldwide create a platform for success: what values they need; who they recruit and what recruitment processes work best; how they keep their eyes on the pulse of the market; how they match the right people to particular jobs. The consultancy process consist no ‘necessary’ structures (which may be implied by pairings such as the dependent client and indispensable consultant, or alternatively the resistant client and vulnerable consultant). Rather the consultant-client relationship is best regarded as part of managerial structure and a contingent exchange that presumes a variety of forms. Every consulting sale is relationship sale. A client isn’t comfortable unless the chemistry
with the key members of the consulting team is there. There are key stages of whole consultancy process-Entry, Diagnosis, Intervention and evaluation.
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In a service relationship where business advice is consumed over the course of a series of interactions, the presence of ambiguity creates uncertainty (Clark, 1995). Management consulting is an example of a complex service activity whose success is dependent on the nature of the interaction between the actors (Clark, 1995; Fincham, 1999; Lowendahl, 2005; Nachum, 1999). Consultants make their managerial clients receptive by unsettling them and playing on uncertainties, they over attractive alternative scripts, and reinforce the message with follow-up techniques (also Clark and Salaman, 1995a, 1995b, 1996a). In this sense, the `strategic’ perspective starts from questions about the sanctioning of a group like consultants. Where does their legitimacy and impudence come from, given that they are not the possessors of full blown technical expertise or in positions of authority in organizational hierarchies? The answer this perspective supplies lie in the emphasis on the potency of consultant strategies which,
as we saw, involve true power/knowledge interactions. Schein (1990) has identified three methods of consulting –
Purchase of Expertise: – In this during the process of improvement client define needs and look for the consultant to meet the needs. In this there is no expectation for relationship (client-consultant); rather consultants provide their expertise services to the client.
Doctor – Patient: – As this methods is based on diagnostic approach and the consultant find out what’s wrong going on in organisation, in the same manner patient ask the doctor to find out the disease. On the basis of their knowledge, experience and diagnostic ability the consultants find out the strategic and organizational problems. This methods focus on building strong relationship and understanding between client and consultants.
Process consultation: – In this both client and consultant work together to generate the solution as well as consultant provide methodology and framework for defining the problem and the best available solutions.
Even though consulting-client practices have been discussed in the context of knowledge attributes, the nature of the interaction is heavily dependent on the consulting and client firms’ cultures. The study of culture is important as a tool for understanding the development of trust in the client-consultant relationship, because each party’s perceived level of risk and interdependence is embedded, to some extent, in the different sets of cultural values and artefacts that each party brings to the relationship. Understanding the cultural dimensions that influence the design and delivery of business advice can help us understand the interpretative framework from which both parties structure their expectations for each other. (Compatibility Model, Clark)The client-consultant relationships are designed to be extremely fruitful experience. That collaborative effort can generate a substantial return on investment for the client’s business. That can also lead to dramatic changes that affect the company, its culture, and employees. In the case of family businesses, positive results can impact generations to come. Following are the stages which are important in client-consultant relationship.
Establishing Understanding – During this stage, the initial scope of the work and mutual expectations are defined. There may be some specific assignments, such as establishing coaching relationships with executives or the presentation of a seminar. Other task may be more open-ended, such as future discussions with the CEO or HR to develop a clearer understanding of the corporate culture, an outline for a leadership development program, or to discuss succession planning.
Identifying the Client – In most cases it is not always clear who the client is. For instance, one contact may be a Human Resources VP dealing with a senior executive who is negatively affecting the rest of the functional Team, and in turn the bottom line. Who is
the client here? Is this the Human Resources VP, the senior executive, or the company? The goal is to make interventions that are simultaneously beneficial for all involved.
Like a primary physician, a consultant gathers information through questions, and possibly tests, to arrive at a diagnosis and construct a plan of action. Unlike a primary physician who checks some boxes and hands a form to the billing department to obtain payment from the client or insurance company, the consultant and client need to agree on expectations and manner of payment.
Estimating the Cost – Most of the client are the business man so for them cost is an important factor while hiring the consultant and for consultant also it is necessary to keep reasonable cost for the client for long-term relationship.
Starting the Assignment – At this point, reputation and a mutual trust have been established and the client engages hired consultant. The assessment process still continues. That can involve individual interviews with important personnel or family members. Required historical, financial, and operational information about the business is necessary to obtain a clear picture of the business system and culture. Comment and information by past consultants are also relevant. The ongoing assessment process may reveal a major organizational or strategic need that must be addressed. Special coaching projects and assignments with solid objectives can be started. However, it is important to realize that as the early work phase unfolds, other important short-term and long-term goals may become known. That may require some prioritizing.
Role as a Consultant – Consultants serve different kinds of role to the client business for long term relationship. As the assignment start client might require following role from consultant.
As a Coach – Consultants work with the functional team to improve functional skills, interpersonal and leadership; to recognize personal and company visions; to identify the various components of the organisation’s culture ; to increase self-awareness and self-management; to identify personal and career goals ; to increase the understanding of group and organizational dynamics and, in general to improve the range, flexibility, and effectiveness of the individual’s behaviour with co-workers, clients, and family
Dispute Manager – Pending unresolved dispute between two important individuals in the company can paralyze and even destroy a company or family. This can involve conflict between two company’s partners; an owner-founder and spouse (executive couple); the sales head and the plant manager; or other important pairs. Dispute may also exist in the functional executive Team. It may result operational and strategic meetings useless. Here Consultant role is not to be mediator but to facilitate communication and to help form true dialogue – Art of thinking together.
Professor – It might be possible where a teaching module or seminar may be customized and utilized to serve, not only an educational, but an organizationally strategic purpose. It may require asking the tough questions that required to be asked.
But, it is important that the consultant ask questions tactfully and with good timing. As professor consultant also contribute to the development of the business as a learning organization. A consultant promotes a stance and approach that underscores how improvement in knowledge generates healthy business and personal functioning.
Mediator – This might be very valuable service. As an experienced judge of non verbal communication organizations consultant should be able to process and interpret most of emotional and psychological information that can be futile or too complicated to the casual observer in the system. Consultant should recognize trends, themes and other phenomena and should interpret them to the client. He can make use of this important information to effect organizational change and strategy.
Confidentiality – He should have the trust of those he works with. All people must be assured that every information given to him would be confidential unless he has permission to disclose it. Confidentiality may also lead to measure changes that affect the company, its culture, and employees.
A consultant is a stranger to the client’s business. The main positive of this is that the consultant is not unknown by the knowledge of the client company’s past failures. The negative is that without the client sharing information, the consultant might not have clarity on the firm’s goals. It is like most of the consultant work as a employee but they are not paid so company share information with them so that they could make better business environment as well as could improve the efficiency of the organisation. In Schein’s model, there are six types of client -Contact client, Intermediate clients, primary clients, unwitting clients, indirect clients and ultimate clients. Bad habit and value creating consultants which describe different aspects of consultants attributes.
BAD HABIT CONSULTANTS (Source-The Value Creating Consultant-Carucci&Telenbaum)
VALUE CREATING CONSULTANTS (Source-The Value Creating Consultant-Carucci&Telenbaum)
Different kind of clients may have different kind of need s from the consultants. In an survey researchers find put that consultancy firm loose contract as they are not able to meet expectations and need of different clients as well as they are able to maintain good relationship with them. Smith’s (2002) discussion suggests that consulting activities and client objectives cannot occur without project outcomes that are clearly understood by both parties and stresses the importance of good communication between the client and the consultant, with senior management.
Factors for consulting engagement success- A consulting engagement may be considered successful if the client is satisfied that the consultant has met expectations and the consultant is satisfied that his or her reputation has been enhanced, with expectations of future revenue streams (McLachlin, 1998). However Schaffer (1997) gave five fatal flaws in traditional consultancy.
Management consulting is the business of helping organizations so that they could improve their overall performance by identifying the problems which they are facing and by formulating strategic plans for improvement. For being an effective management consultant you should have the following skills –
1. Listening skills – Consultants are expected to work closely with their clients. For understanding their needs and demands consultants are required to listen to them carefully especially when they are talking about the current business problems. Taking notes while listening is also a good practice in consultancy industry and encouraging their clients to go on details so that they could get enough information about the issues is a good idea.
2. People management – In this industry consultant interact with so many people in day to day activity so managing people is a very important skill required for being an effective management consultant. As most of the big industry looses client not because of less knowledge and efficiency rather they lose client because their consultant don’t maintain good relationship with people.
3. Self Confidence – As a consultant, you’re expected to be someone who knows the ins and outs of the industry. Someone who can give solutions or recommendations in a
critical situation. Consultant should be confident enough while talking to the client if he wants to make his reputation with the client as well as whatever information he should provide must be accurate.
4. Problem-solver – As a consultant, you’re expected to have the capability to analyze, understand and resolve problems being faced by your clients. Most of the consultant act as a doctor to the patient in a situation when patient don’t have any option and he calls doctor to find out what’s wrong going on with him/her.
5. Open mindedness – Consultant should be open minded to face the any situation with the client, they should not be adamant to any particular issue.
6. Flexibility – Consultants should be flexible enough in work conditions also as most of the client required consultant on client site. In most of the cases consultants spent maximum time on client site so it requires a lot of flexibility to manage the entire thing during your work.
7. Adaptive information processing ability- Consultants are required to stretch their brain. A consultant tells concepts and processes (and talks much more about changing ideas into action). Consultant with adaptive information processing ability is in constant demand in the industry. Consultants should be fast enough to process all information as soon as possible to take out the best needed information for the project. Knowledge of soft skills like computer is very helpful and mandatory in this industry.
8. Neutrality – Consultant should be neutral in terms of internal politics as well as they should share anybody’s information with anyone else without permission.
9. Communication and presentation skills – These are the two skills which are mandatory for all consultants as all big consultancy required people with good communication skills as well as good presentation skills.
10. Knowledge of Industry-Most of the consultancy firms look for the people who have enough experience in particular industry so that they could give best advice to their client. There are so many top executives who join big consultancy firms after having enough experience in particular industry. Client also asks for someone who is having experience in the same industry.
“Without consultation, plans are frustrated, but with counsellors they succeed.”
Consultancy as said above is the way to get succeed for most of the organisation operating in different industries. Consultancy as a `knowledge industry’ is attracting maximum attention, including interest from critical management theory. The latter has focused on the symbolic aspects of the consultancy process. Critical research has seen in the rationalist area of consultancy a system of strategies designed to build images of its own expertise in order to legitimize this to clients. For most of the industry client – consultant relationship is most important as whole industry is getting more business from repeat order rather from new sales. An alternative radical structural perspective brings into focus the limitations of consultants’ socio-political skills, and views with suspicion
any notion that knowledge sites like consultancies could be the creators of new dependencies. The difference in emphasis between these approaches reflects the fact that in certain respects they are opposed paradigms. A strategic perspective focuses on the practice of consultancy and regards as problematic the achievement of consultancy activity; a structural view stresses the constraints on the consultant – client relation- ship and the demand for consultant ideas created by macro/external forces. Despite this, a number of writers have begun to move towards bringing both perspectives to bear, seeking complementary insights from the `strategic’ and the `structural’. This has meant an explicit focus on the interaction between consultant and client and the context of consultancy work. Management needs and the nature of the management process have been considered together with consultant identities, and how both sets of interests and identities feed off each other. Consultancy industry is more dependent on client as they require talented people in their team so that they could get maximum business from the client. Consultancy is a knowledge based industry as well as it require people with certain skills like good communication skills, flexibile,good listening skills, presentation skills etc.
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