An Introduction to Management Consultancy

An Introduction to Management Consultancy

Article Type: Suggested reading From: Human Resource Management International Digest, Volume 22, Issue 7

Marc G. Baaij, Sage, 2013, ISBN: 9781446256138

Marc G. Baaij’s An Introduction to Management Consultancy provides the essentials for success as a student and later when working with and not just for consultancy firms. It is built around learning objectives to empower understanding of the what, how, when and why at macro and micro levels of management consultancy and provides engaging real-life examples and extra Web materials for study.

The book addresses business students and graduates who are considering a career as an external or internal management consultant. The book may also be relevant to people employed in other lines of business who are considering a career switch to management consultancy. The book may, in addition, appeal to client managers and client employees who work with consultants and, therefore, have a need for better understanding of management consultancy. It may help aspirant consultants to prepare for the selection process, in particular, the case interviews. And finally, the structured approach to problem-solving presented in the book may be valuable for people outside management consultancy.

Management consultancy is sometimes called the graduate school of business. It is an advisory service by specially trained and qualified people who help, in an objective and independent manner, the client organization to identify management problems, analyze them, recommend solutions and provide help, when requested, in the implementation of solutions. The management-consultancy process consists of five sub-processes: identifying the problem or opportunity; diagnosing of the problem; developing one or more alternative solutions; making a decision and implementing the decision.

The book distinguishes four informal roles for management consultants: the hired hand, the legitimator, the political weapon and the scapegoat:

• Hired hand: The effect of the hired hand is relatively limited if the management consultants conduct tasks that could be done by client employees. If the work does not require distinctive knowledge and capabilities, management consultants as hired hands cannot differentiate themselves from client employees.

• Legitimator: The role of the legitimator is to validate client-management decisions. This validation may enable client management to overcome the opposition of internal and external stakeholders.

• Political weapon: The role of the political weapon is to provide arguments for client-management decisions. If the management consultant is used in a political fight between the client organization and an external party, the client organization may benefit.

• Scapegoat: The scapegoat takes the blame for client-management decisions. Management consultants as scapegoats help in the implementation of decisions to which opposition exists.

Narrowly defined, management consultancy is about providing advice on client management’s decisions on solutions for problems and opportunities for the organization of the client. A broader definition of management consultancy combines advice on management’s decisions with assistance.

Management consultancy is a knowledge-intensive service. The most important inputs for the industry are individuals with knowledge and knowledge-processing competences for solving problems and implementing solutions.

Technological developments follow a wave-like pattern. Whereas business cycles take periods of around 10 years, these technological waves may last for decades.

Consultancy is a service, which means it is a people business. Because the quality of consultancy outputs is difficult to assess, clients also look at the quality of the inputs, that is, the people within the consultancy. In many consultancy firms, the turnover of staff is relatively high, which puts high demands on the firm’s recruiting function.

A management consultancy is a business. It sells its services to clients at a profit. A management consultancy should therefore be managed as a business. As a management consultancy relies heavily on its people, the business model of a management consultancy emphasizes not only target clients but also target employees.

Many management-consultancy firms have an up-or-out policy. “Up” refers to promotion of an individual to a higher level in the consultancy firm’s hierarchy. An “out” decision means that the individual must leave the consultancy firm. The firm offers only two options. Either you move up the firm’s hierarchy – within a predetermined period – or you have to go.

The most important reasons for applying for management-consultancy positions are the steep learning curve, the high earnings and the status of the job.

In addition to commercial projects, consultants may do unpaid projects for charities or other non-profit organizations. Such pro-bono projects may contribute to the reputation of the consultancy firm. They may give consultants a good feeling, thereby helping to motivate – and retain – consultancy staff.

Some consultants may use cold calling to make the prospects aware of an issue and to create interest in the consultant’s offering. Selling consultancy projects is challenging, in particular for new clients. Repeat sales are usually more efficient than acquiring new clients. To sell to new clients, the consultant first needs to build a relationship with the prospect. Understanding the prospect’s perspective is critical to success in this.

The book is well researched, with in-depth knowledge about management consultancy. It is written in a conversational tone and is easy to understand.

Reviewed by Professor M.S. Rao, MSR Leadership Consultants India, Hyderabad, India, available at: www.amazon.com/gp/pdp/profile/A16SKI0396UBRP, msrlctrg@gmail.com