How does management consultancy work

how to start management consultancy and also what do management consulting firms do and what is project management consultancy services
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Dr.NoahHarper,United Kingdom,Professional
Published Date:17-07-2017
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MANAGEMENT CONSULTANCY a handbook of best practiceMANAGEMENT CONSULTANCY a handbook of best practice EDITED BY PHILIP SADLERYOURS TO HAVE AND TO HOLD BUT NOT TO COPY First published in 1998 Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publica- tion may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic repro- duction in accordance with the terms and licences issued by the CLA. Enquiries con- cerning reproduction outside those terms should be sent to the publishers at the undermentioned address: Kogan Page Limited 120 Pentonville Road London N1 9JN © Philip Sadler and named contributors, 1998 The right of Philip Sadler and named contributors to be identified as the authors of this work has been asserted by them in accordance with the Copyright, Designs and Patents Act 1988. British Library Cataloguing in Publication Data A CIP record for this book is available from the British Library. ISBN 0 7494 2448 6 Typeset by Saxon Graphics Ltd, Derby Printed and bound in Great Britain by Biddles Ltd, Guildford and Kings Lynn Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the relevant copyright, designs and patents acts, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publisher. eBooks Corporation Contents Foreword by Barry Curnow xiii Foreword by Brian O’Rorke xv Preface by Peter Jarvis and Elizabeth Gluck xix Part 1 Management consultancy today 1 The management consultancy industry 3 Clive Rassam Introduction 3 Definitions of consultancy 3 A profession or an industry? 4 A brief history of management consultancy 6 The structure of the industry 11 Suppliers from outside the industry 15 The industry today 15 Consultancy markets and suppliers 17 The world’s largest consulting firms 18 The European consultancy market 19 The UK market 21 Consultancy profiles 22 Management consultancy institutions 26 The future for this industry 28 References 29 2 Professionalism and ethics 31 Paul Lynch Professionalism 31 Management consultancy 33 Ethical norms 36 Ethical guidelines 37 References 39 vContents Appendix A: Members of the International Council of Management Consulting Institutes (ICMCI) 40 Appendix B: Ethics questionnaire and responses 41 Appendix C: Code of professional conduct of the Institute of Management Consultants (IMC) 43 Appendix D: Code of professional conduct of the Management Consultancies Association (MCA) 49 Part 2 The consulting process 3 Consultancy in a changing world 53 Philip Sadler Introduction 53 The main categories of environmental change 53 Turbulent environments 64 Conclusion 65 References 65 4 The client–consultant relationship 66 John Mulligan Paul Barber Introduction 66 The nature and purpose of the consultancy relationship 67 Who is the client? 70 Phases of the client–consultant relationship 71 Interventions and roles 78 Conclusion 84 References 84 5 The entry phase 86 David Hussey Introduction 86 What is the entry phase? 86 The purposes of the entry phase 87 The stages of the entry phase 90 Agreeing the brief and its scope 91 Planning the project 93 Preparing the proposal 94 Presenting the proposal 102 References 104 6 Data collection and diagnosis 105 Clive Rassam Introduction 105 Analysis 105 viContents Reframing the brief 109 Data collection 109 Choosing data collection methods 111 Diagnosis 113 Diagnostic techniques 114 Research methodology 122 Conclusion 123 References 124 7 Presenting advice and solutions 125 Clive Rassam Introduction 125 Back to basics 125 Consider your role 126 List the options 127 Involve the client 128 Create solutions 129 Report writing 130 Giving presentations 134 Conclusion 136 References 136 8 Implementation 137 Nick Obolensky Introduction 137 What is implementation? 138 Why do recommendations fail to be implemented? 139 What typical ‘techniques’ exist to aid implementation? 146 What is the consultant’s role and what skills are required? 159 A checklist for consultants 164 Summary 165 References 166 Part 3 Managing the business of management consultancy 9 Consultancy marketing strategies and tactics 169 Martin Pollecoff Introduction 169 Marketing and some important definitions 169 Direct marketing 172 An 11-step planning programme 173 Making it happen 195 References 195 viiContents 10 Finance and control issues 196 John Kind Introduction 196 The basic economics of management consulting 196 The economic characteristics of consultancy businesses 197 Financial planning and control 209 Project management 212 Summary 217 References 219 11 Managing human resources 220 David Hussey Introduction 220 The balance of knowledge 222 Strategic human resource management 224 What does strategic human resource management really mean? 226 Structure and culture 230 Policies and strategies 232 References 239 Part 4 Change management 12 Managing organizational change 243 Philip Sadler Introduction 243 Incremental and transformational change 243 Recognizing the need – triggers for change 244 The growing recognition of the role of people factors in business performance 246 Typical change objectives 246 Some of the issues involved in changing organizational culture 248 Managing culture change – key success factors 251 The implementation of organizational change 253 Resistance to change 255 Summary 258 References 259 13 The role of the management consultant in the change management process 261 Bill Critchley Introduction 261 The nature of objectives in a change process 263 viiiContents Diagnosis 265 An emerging view of the role of the change consultant 267 Choice and influence in our roles 276 References 277 Part 5 Concepts and tools 14 Strategy formulation models 281 Nick Obolensky Introduction 281 What is strategy? 281 Types of formulation models 282 Traditional approaches 285 External-oriented approaches 287 Financial-oriented approaches 294 Internal-oriented approaches 297 Hybrid approaches 303 Possible roles of a consultant 305 Consultants’ checklist 307 Summary 308 References 308 15 Techniques, methods and models of consulting 310 David Hussey Introduction 310 Different approaches to consulting 310 Building a practice on an original proprietary approach 312 Operationalizing knowledge and concepts 314 Developing proprietary methods 322 Making the most of proprietary approaches 324 References 325 16 The impact of IT on consultancy practice 327 Kevin Long Introduction 327 Framework model of an IT consultancy’s services 329 Generic model of an IT consultancy’s services 332 IT-related issues 335 Outsourcing of IT functions 341 How consultants themselves use IT 342 ixContents Part 6 Different fields of consulting activity 17 Small and medium-sized firms 347 Rosemary Harris Loxley Tony Page Introduction 347 Why it is necessary to shed some assumptions 349 What issues leaders of SMEs typically want help with 351 A practical tool for entering the client’s thought process 354 Why being different can add to your impact 357 Understanding personal agendas 358 Helping people find the business direction 360 Growing the leaders’ thinking capacity 362 The business performance workshop approach 365 Moving forward 367 References 367 18 Consultancy in the public sector 369 Michael G Jarrett The increasing dynamics of change in the public sector 369 The impact of change can distort the ‘primary task’ 370 The case of a local authority in transition 371 The implications for organizational consultation 375 The role of the consultant 378 Conclusion 380 References 380 19 Large corporations 384 Mike Jeans Tony Page Introduction 384 Understanding your context and role 387 Identifying your sponsor 390 Understanding politics 393 Managing risk 395 Programme management 396 Working with counterparts 400 Creating conditions for engaging people 402 Shaping the future 405 References 405 xContents 20 Management consultancy for voluntary organizations 407 Pesh Framjee What is a charity? 407 Constitutional forms 408 Governance structures 410 Regulatory regime 411 The statement of financial activities – the rationale 415 Fund accounting 416 Operating structures 418 Charity branches 418 Overseas operations 420 Other issues 421 Cost ratios 422 Taxation 423 Conclusion 423 21 Consulting internationally 424 James Hall Introduction 424 Going global 424 Andersen Consulting 425 The global network 427 Conclusion 430 22 The role of the internal consultant 432 Margaret Neal Christine Lloyd Introduction 432 Overview of challenges and contribution 432 Why might an organization opt for an internal consultancy unit? 434 The specific nature of the ‘internal’ role 434 Case studies 436 Career paths and opportunities 443 Survival techniques for the internal consultant 444 Part 7 Looking forward to the next century 23 Challenges and prospects: a SWOT analysis of the consultancy industry as it approaches the millenium 449 Mick James Introduction 449 Strengths 449 xiContents Weaknesses 452 Opportunities 454 Threats 456 Conclusion 458 Index 463 xiiForeword I am delighted to welcome this pioneering text, which is the product of an inspired vision for an MSc in contemporary consulting practice by distance learning. This book, like the postgraduate programme design that prompted it, aims to approach consultancy practice by exploring the principles that stand behind the application of specialized management techniques. It also seeks to emphasise and pursue an understanding of what is really driving the dynamics of the consulting relationship in a particular client business context. Certified Management Consultants and those preparing for the quali- fication in the 25 different countries internationally where it is awarded, will find the text essential reading for their continuing professional development and certification. It will be particularly useful to consultants who are sole practitioners or who are with small firms that do not have access to the highly sys- tematic proprietary training programmes run by the brand name man- agement consulting houses. It will be of equal interest and value to those working within the larger consultancies who are taking charge of their own careers and managing their own learning within a framework of career opportunity and professional development resources provided by their employers. The Institute of Management Consultants in the UK (IMC), and its fel- low members of the International Council of Management Consulting Institutes (ICMCI) maintain the same standards for the CMC qualifica- tion globally. They require that qualified consultants should demon- strate ongoing competence in the principles and practice of consultancy, as well as in general business management and their functional man- agement specialisms.Foreword In particular, Certified Management Consultants attest to a Professional Code of Conduct and Ethical Guidelines reflecting such principles of good practice. We see the MSc in Management Consultancy from the Management Consultancy Business School in collaboration with the University of Surrey of which this book is a part as ideal stepping stones across the Uniform Body of Knowledge in Management Consultancy, which underpins the CMC qualification. However, as consultancy skills increasingly become core competen- cies or life skills for effectiveness and survival in a wide range of profes- sional service and managerial positions, this book will become a vade mecum for a broad range of careers in the post-employment and portfo- lio labour markets of the future. Barry Curnow Principal, Maresfield Curnow School of Management Consulting Past President, Institute of Management Consultants (UK) Secretary-designate, International Council of Management Consulting Institutes xivForeword I welcome this opportunity to write the Foreword to this invaluable book that succinctly describes the management consultancy industry. Indeed I would congratulate the authors on even attempting to do so, for today the spectrum covered by the term ‘management consultancy’ embraces so much, with one end of the structure having little similarity with the other. What does the sole practitioner or academic selling his or her valuable professional services at an hourly rate have in common with a multinational organization claiming to provide value added on a £100 million contract? I suspect it is little more than the brand name management consultancy and the belief that if you are a participant in one of the ‘camps’ then those who are not with you are not deemed management consultants. As a student of management consultancy you are faced, therefore, with a dilemma before your studies have even begun. But do not worry, management consultancy is all about chal- lenge and providing the answers. Management consultancy is about investment in the future: it is the means by which new ideas, new skills new technology are disseminated through the community. Consultants are unrecognized as wealth creators in an economy: they are catalysts and multipliers and this is their value, whether we relate them to global, regional or national markets. Management consultancy has moved great distances since its origina- tors in the late nineteenth century set up their professional stall. In the UK for the next half a century its efforts were concentrated on organiza- tion and methods, and the leading companies of that time such as PA (Personnel and Administration) and PE (Product and Engineering) demonstrated that focus. The sixties saw the first evolution in the busi- ness when accountancy-based consultancies entered the market, xvForeword demonstrating that consultancy should have a ‘bottom line’ focus too. The multi-national dimension of accountants drove consultancy into the international arena, and for the next quarter century the driving force in management consulting was provided by these practices. Now we are facing a second evolution. As clients increasingly under- stand not only the value of outside ‘bought in’ advice, they also, through their regular use of management consultancy, understand the service that is on offer. Management consultancy nowadays is no longer solely about diagnosis and identification, recommendations and implementa- tion, but it is about the provision of complete business solutions. Such solutions involve the omnipresence of technology. The drivers therefore in the industry today are those organizations with technology expertise written into their structure. No one can really estimate the size of today’s global management con- sultancy market. We believe that in the UK it amounts to around £2.7 bil- lion depending on how purist one is in defining it: in Europe the market is seen as being around £14 billion while globally it is probably around £60 billion in value. Having said this, over 80 per cent of management consultancy is still performed nationally, and even in a global market it is fairer to say that it is sold internationally but still performed nation- ally. It is fair to add that at the top of the market local performance is tempered by the fact that international experts are flown in to service the national market. Management consultancy is an industry that thrives on discontinuity (change) but not insecurity and uncertainty. It is a partnership between client and consultancy, the former being clear as to this objective, the lat- ter upon the means of getting there. There is a cliché often used, which says that you cannot do a ‘good consultancy for a bad client, or a bad consultancy for a good client’. Irrespective of whether the statement is true or not, it does underline one truism – unless client and consultancy work together on a constant basis, the likelihood of real added value resulting is debatable. This book deals with the ‘nuts and bolts’ of management consultancy. This is important, but never forget that when you enter the ‘wide and wicked’ commercial world management consultancy is not only about process expertise but brain power as well. Management consultancy cannot be priced as if it is a commodity, and consultants valued by the string of initials and qualifications they possess after their name. It is about not only having a focus but also a breadth of knowledge and a vision. Not everyone possesses these two great forces and, too often in my experience, individuals at all levels of the consultancy industry are xviForeword unable to demonstrate a breadth of vision outside of their expertise. To be successful, management consultancy has to be outward rather than inward looking. I hope this book sets you on the correct path. Brian O’Rorke Former Executive Director Management Consultancies Association xviiPreface This book, which has been produced as a textbook for an MSc in Management Consultancy, is the product of a unique threefold collabo- ration. • The book was commissioned by the publishers in co-operation with the Management Consultancy Business School, as a textbook for this degree programme. • The Business School brought together representatives from both the Management Consultancies Association (MCA) and the Institute of Management Consultants (IMC), with a representative from Kogan Page (the Publishers) and academics from the University of Surrey in order to prepare the content of the pro- gramme – therefore Management Consultants have been involved in preparing the degree programme itself and, indirectly, the con- tents of this book. • The Business School and the University of Surrey, through its School of Educational Studies, have entered a collaborative arrangement so that the whole of the degree programme is an internal degree of the University. In the opening chapters of the book, there is reference to the perennial debate as to whether Management Consultancy is an industry or a pro- fession. Of course this debate will continue, but the real concern of Management Consultants should perhaps be about their own profes- sionalism, irrespective of the status of the occupation. Naturally, the occupation’s status matters a great deal, but it will certainly be enhanced if its practitioners exhibit all the characteristics of professionals. xix

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