Why Consulting Transcends Advice-Giving

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Summary

Every year, the landscape of management consulting in the US witnesses a financial influx surpassing $2 billion for the invaluable services rendered. However, a substantial portion of these funds often finds its way into impractical data and poorly executed recommendations.

In a quest to curtail this expenditure and enhance the efficacy of consulting assignments, clients must delve deeper into what these engagements can truly achieve. There’s a growing need for clients to demand more from their consultants, pushing these advisers to evolve and meet heightened expectations.

This article is born out of extensive research into effective consulting practices, drawing insights from interviews with partners and officers of five prominent firms. It also draws from supervising novice consultants and myriad conversations with industry professionals and clients, both domestically and internationally.

Through these encounters, a framework is presented aimed at elucidating the core objectives of management consulting. Establishing clarity around these purposes is pivotal, fostering a more satisfactory engagement process for both consultants and their clients.

Purpose Pyramid: Understanding the Layers

In the expansive domain of management consulting, a multitude of activities unfolds, with different firms and their members often attributing diverse meanings to these practices. Rather than strictly categorizing these activities based on the professional’s area of expertise—be it competitive analysis, corporate strategy, operations management, or human resources—practical distinctions within these categories are as notable as the disparities between them.

Alternatively, viewing the consulting process as a sequence of phases—entry, contracting, diagnosis, data collection, feedback, implementation, and beyond—offers another lens. However, consultants readily acknowledge that these phases are rarely as discrete as they may seem.

The fluid interplay and interconnectedness between these stages underscore the dynamic and intricate nature of the consulting process. This nuanced comprehension is imperative for seasoned consultants navigating the intricate landscape of their engagements.

A more practical approach to dissecting the consulting process involves scrutinizing its purposes, as clarity about objectives significantly influences the success of an engagement.

Here, we outline eight fundamental objectives of consulting, arranged hierarchically:

  1. Providing information to a client
  2. Solving a client’s problems
  3. Making a diagnosis, potentially redefining the problem
  4. Making recommendations based on the diagnosis
  5. Assisting with the implementation of recommended solutions
  6. Building a consensus and commitment around corrective action
  7. Facilitating client learning — teaching clients how to resolve similar problems
  8. Permanently improving organizational effectiveness

Consulting is more than giving advice

While the lower-numbered purposes are more readily understood, practiced, and often requested by clients, many consultants aspire to reach higher stages on the pyramid, exceeding the scope of most engagements.

Purposes 1 through 5 are generally acknowledged as legitimate functions, though some controversy surrounds purpose 5. Explicitly addressing purposes 6 through 8 is less common among management consultants, and clients may not explicitly request them.

However, leading firms and their clients are increasingly approaching lower-numbered purposes in ways that integrate the other goals.

Goals 6 through 8 are best considered natural by-products of earlier purposes, essential to effective consulting even if not initially recognized as explicit goals.

Advancing up the pyramid towards more ambitious purposes demands increased sophistication and skill in the consulting processes and in managing the consultant-client relationship. Shifting the purpose of an engagement should align with the evolving needs, not merely serve the consultant’s business interests. Reputable consultants prioritize addressing the client’s requested purpose initially, and as needs evolve, both parties may collaboratively agree to pursue additional goals.

Providing Information

One of the most prevalent reasons for seeking consulting assistance is the quest for information. The compilation process may involve various methods, such as attitude surveys, cost studies, feasibility studies, market surveys, or analyses of the competitive structure within an industry or business.

A company may seek a consultant’s special expertise or the more accurate, up-to-date information that the consulting firm can provide. Alternatively, the company might find it challenging to allocate the time and resources internally to develop the required data.

Frequently, all a client desires is information. However, the information a client truly needs can sometimes differ from the initial request made to the consultant. For instance, a CEO once requested a study on whether each vice president generated enough work to justify having a personal secretary.

The proposal was rejected by those contacted because they believed the CEO already knew the answer and an expensive study wouldn’t likely convince the vice presidents anyway.

This scenario underscores the nuanced nature of client expectations and the importance of aligning consulting efforts with the actual information needs of the client.

The partner of a consulting firm once remarked, “I frequently ask: What will you do with the information once you’ve got it? Many clients have never thought about that.” It’s a common scenario where clients may benefit more from optimizing the use of existing data than acquiring new information.

Regardless, the delivery of valuable insights by an outsider hinges on a comprehensive understanding of why the information is sought and how it will be applied. Additionally, consultants should assess what relevant information is already available within the client’s resources.

In this context, seemingly unconventional questions from both consultants and clients should not be met with offense; rather, they can be profoundly constructive.

Professionals bear the responsibility of delving into the underlying needs of their clients. Responding to data requests should be done in a manner that enables the exploration and address of other needs, seamlessly integrating them into the broader agenda of the engagement.

Streamlined Effective Diagnosis

Management consultants derive substantial value from their diagnostic expertise, a process that sometimes strains the consultant-client relationship due to managerial apprehensions about uncovering challenging situations. Effective diagnosis goes beyond external environmental analysis, business technology and economics, and the behavior of non-managerial staff.

It involves understanding why executives made choices that now seem erroneous or overlooked critical factors.

While independent diagnosis is often cited as a reason for external involvement, involving client team members in the process is prudent. Collaborating with the client organization ensures a thorough understanding of strategic problems and organizational dynamics. Consultants push for client involvement in detailed work, fostering a hands-on approach. This engagement facilitates daily discussions with the CEO and weekly meetings with the chairman, allowing strategic and organizational recommendations to be thoroughly tested and well-received.

Client participation in the diagnostic process encourages acknowledgment of their role in issues and a willingness to redefine the consultant’s task. Leading firms establish joint consultant-client task forces to collaborate on data analysis and other diagnostic components. This proactive approach enables managers to initiate corrective action organically, reducing the reliance on formal recommendations.

Conclusion

As we delve into the intricate world of management consulting, we’ve explored the fundamental pillars of the consulting process—providing information, solving problems, and effective diagnosis. Each facet demands a nuanced approach, balancing client expectations with the consultant’s expertise.

In the upcoming article, we’ll continue this journey, unraveling more essential insights and practical tips that empower both consultants and clients in navigating the complexities of their engagements. From refining the consulting pyramid to exploring the dynamics of collaborative problem-solving, we aim to provide valuable perspectives that enhance your consulting experience.

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