Most
companies at any stage of their growth (or even in the event of their
decline) can be benefited substantially by retaining the services of
the right management consulting firm. Management consulting firms are, generally speaking, in the practice of advising and assisting businesses to improve their performance in any given set of circumstances.
Consultancies operate primarily through an analysis of a client company's situation; the application of experience and expertise in formulating a tactical or strategic plan
for improving the status quo; and, by proactively overseeing the
implementation of the proposed plan of action until the desired result
is obtained. It is in this last aspect of a typical management
consulting engagement where even the most notable and established
consulting firms tend to fall short.
Consultancies may provide organizational change management assistance, development of coaching skills, process analysis, technology implementation, strategy
development, financing, marketing and branding, merger and acquisition
or operational improvement services. Management consultants often bring
their own proprietary methodologies or frameworks to guide the identification of problems and to serve as the basis for recommendations for more effective or efficient ways of performing work tasks.
In choosing the right management consulting firm, the following factors must be given serious consideration: objectivity, expertise, experience, problem-solving orientation, scalability of solutions, client-centric focus and affordability.
In considering all of these factors, you may well find that some of the
older, larger management consulting firms may not be the ideal match
for your company's needs.
In an ideal
client-consultant relationship, the client and the consultant can both
gauge the return on the consulting investment (the “Consulting ROI”)
by dividing the incremental improvement (produced by the implementation
of the consultant's advice and efforts) by the total billings of the
engagement. The greater this return, the more successful the engagement.
In
making this evaluation, it should be borne in mind that the client's
cooperation is an integral component of any successful engagement – and
further, that the consultant can only hope to exert limited control over
the client's compliance.
Returning to the factors
for selection of a management consulting firm as set forth earlier, we
should take a closer look at each factor, the reasons for its
significance, and how to get a preliminary “reading” on whether or not
your prospective selection has the necessary attributes to warrant your
serious consideration:
Objectivity:
When
retaining the services of a management consulting firm, be certain to
choose one that will view your company objectively (i.e., a firm which:
has no ties to any of management or employees; a firm which is not too
narrowly specialized in your vertical or technical industry; and a firm
which does not have a conflict of interest where it may be doing work
for one of your direct or prospective competitors).
Expertise:
Look
for expertise (among the resumes of the management consulting firm's
personnel) in the areas where you believe that your company needs to
focus. Don't look for narrow technical expertise – look for expertise in
the areas of business discipline where your firm may need shoring up,
such as marketing, branding, manufacturing, strategic planning,
financial restructuring, strategic planning, dispute resolution,
team-building, risk management, etc. Business is business, whether it is
nanotechnology or fertilizer packaging.
Experience:
While
expertise is quite important, there can be no substitute for experience
in the various business disciplines – especially if that experience
centers around a particular area of expertise across a broad spectrum of
industry sectors. Some of the best small- to medium-sized management
consulting firms are comprised of a group of experts (in different
business disciplines) who are well-seasoned with the wisdom that only
experience can confer.
Problem-Solving Orientation:
When
requesting the services of a management consulting firm, your company
is generally not looking for an academic or operational study – your
company, as most, is usually looking for pragmatic, real-world solutions
to suspected or known problems. Your company is seeking actionable
findings. If your choice of management consulting firm is wrong, you
will wind up with a tremendous amount of information, usually
beautifully bound and presented. But is the information focused on
solving problems? Is the information instructive and directly
actionable? Most of all, will the firm that you select assist you
directly in the implementation of its suggested course of action? Most
firms fall short when it comes to distilling their information into a
tightly-focused, streamlined actionable agenda, just as they are prone
to fall short when it comes to “hands-on” assistance in the
implementation phase.
Scalability Of Solutions:
Solutions
to problems encountered by your company must be accommodating of your
company's size of operation. If the solutions presented by your selected
management consulting firm are based upon a framework and assumptions
that are too large or too small for the existing size of your business,
they can be more harmful than helpful. Scalability of solutions, i.e.,
suggestions and plans to fit the present size and immediate needs of
your firm, is a critical component of a successful consulting
engagement. Oftentimes, a large management consulting firm paired with a
young, growing company makes for a poor match where scalability of
solutions is concerned. As an added note, scalability is as essential to
realistic implementation as realistic implementation is to a successful
outcome. When it comes to management consulting firms and to proposed
courses of action, one size does not fit all.
Client-Centric Focus:
If
the management consulting firm that you are contemplating engaging
spends more time touting its own accomplishments and reputation than
examining your needs, consider this to be a negative indicator. While an
allowance must be made for a certain amount of salesmanship, a
client-centric management consulting firm will inundate you with
requests for information and question you extensively.Then, they will
make careful note of your information and answers and reiterate or
paraphrase them to you, just to be certain that they understand your
needs so that they may sculpt them into the scope of your engagement. A
firm that does far more talking than listening and observing is probably
not client-centric. For those of us who are professionals in management
consulting there are three understood rules: 1) know your client; 2)
understand exactly what your client would like for you to focus on; and
3) be certain that the scope of your engagement is built around your
prospective client company's needs and objectives.
Affordability:
Cheaper
is not necessarily better or worse. Your company must be realistic when
it comes to its budget for consulting, and be fully candid with any
prospective candidate management consulting firm about budgetary
constraints, as well as time constraints. While some of the largest
consulting firms may be very inflexible in terms of their hourly rates
and demands upon your limited budget, some of the more contemporary
small- to middle-sized consultancies may be willing to defer a portion
of their billings and/or take part of their compensation on a contingent
basis geared to the occurrence of some successful event.
If a
consulting firm just seems too expensive for your budget, and they
cannot work with you in terms of pricing, you may well be speaking to
the wrong management consulting firm. In the current economy, management
consulting firms need to be creative when it comes to their pricing if
they wish to remain in business. After all, management consulting is a
business just as manufacturing or retailing. Businesses must be more
flexible and creative in a difficult economy or when faced with a client
base having special budgetary needs.
As of June 1st,
2015, some of the better-known management consulting firms having a
presence in the United States or the United Kingdom (according to
Wikipedia) included the following [the author of this article does not
necessarily endorse these firms, the list is not exhaustive, and the
firms are merely listed in alphabetical order]:
Many
of the above-listed management consulting firms are very specialized in
the nature of the services that they provide. Many tend to be centered
around accounting, IT, research, financial analysis and other vertical
areas of expertise. While this may be seen as positive (and may actually
be desirable in certain cases), much can be said in favor of
multi-specialty firms, especially if your company is a relatively young
or rapidly-growing enterprise. By and large, diversification of expertise
is generally a positive in management consulting companies which serve a
client base of young entrepreneurial enterprises and small- to middle
market-sized firms.
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