Why Consultating is Benefical
Each year management consultants in the United States receive more than $2 billion for their services.1 Much of this money pays for impractical data and poorly implemented recommendations.2 To reduce this waste, clients need a better understanding of what consulting assignments can accomplish. They need to ask more from such advisers, who in turn must learn to satisfy expanded expectations.
This article grows out of current research on effective consulting, including interviews with partners and officers of five well-known firms. It also stems from my experience supervising beginning consultants and from the many conversations and associations I’ve had with consultants and clients in the United States and abroad. These experiences lead me to propose a means of clarifying the purposes of management consulting. When clarity about purpose exists, both parties are more likely to handle the engagement process satisfactorily.
A Hierarchy of Purposes
Management consulting includes a broad range of activities, and the many firms and their members often define these practices quite differently. One way to categorize the activities is in terms of the professional’s area of expertise (such as competitive analysis, corporate strategy, operations management, or human resources). But in practice, as many differences exist within these categories as between them.
Another technique is to consider the process as a number of phases—namely, entry, contracting, diagnosis, data collection, feedback, implementation, and so forth. But the phases are usually not as discrete as some consultants would have you believe.
It may be more instructive to break down the process and to consider its purposes; when it comes to analyzing an engagement, there’s nothing that influences clarity of thought more than knowing what you’re trying to achieve. Here are the eight fundamental consu- consulting – objectives of an engagement, arranged in rough order of importance:
– Supplying a client with the necessary information.
– Fixing a client’s issues.
To make a diagnosis, which may necessitate redefinition of the problem.
-Formulating proposals and suggestions after identifying the problem.
– Helping put the recommended solutions into action.
-Creating an agreement and dedication about necessary corrective actions.
– Helping clients learn. That is, teaching clients to solve similar problems in the future.
– Permanently improving organizational effectiveness
The purposes that are numbered lower on the pyramid are ones that people usually understand better, practice more, and request more often from clients. Nevertheless, many consultants who work with those clients aspire to a level higher on the pyramid in terms of both purpose and outcome than that with which they typically achieve when working on contracts.
Legitimate functions generally occur from purposes 1 to 5, although some controversy occurs around purpose 5. Purposes 6 to 8 are addressed less explicitly by management consultants and requested less often by their clients. Yet, in recent years, leading firms and their clients have been approaching the lower-numbered purposes in ways that also involve the other goals. Paragraphs 1 to 3 provide a picture of the kinds of things that consultants do in consulting engagements.
Ascending the pyramid toward loftier aims necessitates honing and amping up the sometimes simplistic and awkward art of consulting. It requires us to shift our thinking and not be satisfied with an obviously stated aim at this level. Ambitious purposes demand more from us in terms of our understanding and skill in the not-so-filmaround processes and in managing the sometimes tricky consultant/client relationship. They also require from us more in resolving purposes succinctly and accurately enough. Where on the pyramid the whole arrangement starts, I guess, is with the client asking for a purpose that aims at the obviously immediate state of affairs.
[1]
Providing Information
Individuals frequently seek guidance to help them find unsolicited information of a desired sort. Gathering this information may involve any number of standard business research techniques. For example, the firm might want a number of studies or surveys made, such as these:
– Attitude surveys of potential customers
– Cost studies of different ways to do the same job
– Feasibility studies of various proposals before making a go/no-go decision
– Market surveys to determine how big a potential market there is for this product
– Analyses of the competitive structure of the industry or business in which they operate or plan to operate
A client often just wants information. But what a client needs sometimes differs from what the consultant is asked to supply. One CEO wanted to know if every VP was generating enough work to need a secretary. The people he contacted pushed back on the project, saying it was unnecessary because the CEO already knew the answer (and an expensive study wouldn’t convince the VPs in question).
After that, the consulting firm’s partner stated, “I ask often: What will you do with the information once you have it? Many customers have never even considered that. Often, they just need to make better use of data they have at their immediate disposal. In any event, no outsider can supply useful findings unless he or she understands the very basics of why the information is being sought and how it will be used. And if the consultants don’t know that, then figuring out what relevant information is already at hand is impossible.
Questions that might seem impertinent to one side or the other should not give offense because, in fact, they can be very productive. My colleagues and I on both sides of the engagement, have a professional responsibility to explore with our clients and prospective clients the underlying “needs” that give rise to requests for data. Our responses should be geared toward both deciphering those needs and addressing them as part of the client engagement agenda.
[2]
Solving Problems
Often, when faced with tough dilemmas, a company will call in outside consultants for help in finding solutions. Some of the problems for which managers seek help are indeed awesome in their difficulty, calling for the consultants to stretch the limits of their thought and imagination. Consider, for example, the problems posed for consultants by the engineering and construction industry. In a recent study of the industry, the following statement was made: “The major projects of a given period are seldom duplicated; they vary in kind and magnitude, being built (if built at all) under different sets of conditions, which also vary greatly.
Pursuing responses to quandaries of this sort is assuredly a function of consultants. But consultants also have an obligation to ask how it is that clients arrive at these sorts of problems in the first place. Quite often, clients would be better served by figuring out what they really need to get done. In effect, some argue, consultants are functionally equivalent to the kinds of executive coaches that help stubborn leaders figure out why they can’t just lead.
What solutions have been attempted before, and what were the results of those attempts? What steps toward a solution, not yet tried, does the client envision? Which parts of the client’s business, related to the problem at hand, are in trouble? If we consider the problem “solved,” how will the proposed solution be applied? What can be done to win the solution wide acceptance? A management consultant should not be too quick, either to reject or accept, the client’s initial description of the problem. Low morale and poor performance in the hourly work force may be the way the client sees the problem. A consultant who accepts this view too readily may then go on to study a lot of symptoms (like the apparently high rate of absenteeism) without ever uncovering the causes.
When feasible, the better approach is to construct a proposal that zeroes in on the client’s expressed worry at a single level while delving into interconnected facets—sometimes delicate topics the client is fully conscious of but finds hard to bring up with a non-insider. As the two parties go about their business, the trouble may get redefined. The query may morph from, for instance, “Why do we have such lousy attitudes and performances by the hour?” to “Why do we have such an ineffective process-scheduling system and such a low level of trust within the management team?”
Thus, a useful consulting process involves working with the problem as defined by the client in such a way that more-useful definitions emerge naturally as the engagement proceeds. Since most clients—like people in general—are ambivalent about their need for help with their most important problems, the consultant must skillfully respond to the client’s implicit needs. Client managers should understand a consultant’s need to explore a problem before setting out to solve it and should realize that the definition of the most important problem may well shift as the study proceeds. Even the most impatient client is likely to agree that neither a solution to the wrong problem nor a solution that won’t be implemented is helpful.
[3]
Effective Diagnosis
A significant portion of management consultants’ worth is in their abilities as sleuths. Who is to say, after all, that almost 20 million Americans can’t figure out how to make a decent living without the help of M.B.A.s, most of whom appear to be in two of the top 10 Fortune 500 companies: AIG and Citigroup? Of course, the diagnosis is only part of the problem. Like any dysfunctional couple, the consultant and the client must first agree that they have a problem before they can work together to understand the nature of the problem and why it got that way.
Independent diagnosis is often given as a reason for using outside consultants. However, it is sensible to involve members of the client organization in the diagnostic process. One consultant explains why this is so:
“The organization is going to have to implement the changes and turn the findings into a plus for the organization. And if they don’t understand the findings or believe in them, they won’t be able to do that successfully.”
It is our normal demand that members of the client team be given specific roles in the project and that these members—not us—be responsible for the line-level detail work that makes the project succeed or fail. They, with us coaching and pushing behind the scenes, do the work that moves the project forward. Or not. During this same period, we talk daily with the client’s chief executive officer for one to two hours about the goings-on in the project. And once a week, we sit with the client’s chairman.
Thus, we deduce strategic troubles related to organizational problems. We get a sense of the capabilities of the important people—what they are able to accomplish and how they ordinarily operate. When we surface with strategic and organizational recommendations, they are usually well received because they have been thoroughly vetted.
When clients take part in the diagnostic process, they are much more prone to admitting that they have a part in the problems and to going along with a new definition of the consultant’s task. Consequently, the best firms set up joint consultant-client task forces that help with the data analysis and other portions of the diagnostic process. As the task forces work, the client’s managers find it only natural to start instituting some of the necessary changes without having to wait for the formal report that usually follows the diagnostic work.
Recommending Actions
The type of work done by consultants usually winds up with a report or presentation in which the consultant explains to the client what has been learned and makes some recommendations. At some firms, about half of the time spent on an engagement is devoted to preparing the document or talk. This is time well spent, for the better the report or presentation, the more likely it is that the work done on the engagement will have a long-lasting positive effect. A report should not only communicate the result of the engagement but also serve as a tool. The following are four objectives that a report should achieve.
While this arrangement may seem a reasonable distribution of responsibilities, it is in many ways too simplistic and, well, unsatisfactory. Countless reports that appear convincing and that were produced at great expense have had no real impact because—thanks to constraints that lie outside the presumed area of responsibility of that consultant—the relationship ends at formulating sound, theoretical recommendations that go unimplemented.
For instance, a public utility company that was taken into national service in a developing country found itself being told for years to be more efficient. It took those commands and worked on them with something akin to the same fervor that accountants use to keep balance sheets under control. The directive to be more efficient led the commission in charge of the public utility to try to undertake an extensive system of financial control over its formerly decentralized operations. But the utility and its public still suffered from an array of conditions that essentially dummy up any big improvement in useful public service: civil service regulations that divert talent, employment conditions that demoralize, and an ice-water relationship with a range of local and state governments. The utility itself is on a sort of shelf right next to more civil engineering projects; but the characters at the top of the enterprise seem to have employed a very low amount of common sense in their decision-making.
In these situations, both parties blame the other. They offer reasons such as “my client just doesn’t have the wherewithal to take the steps that really need to be taken” or “this consultant just isn’t very good at helping clients translate intentions into actions.” I have yet to meet a client who is satisfied with the work of a consultant that really wasn’t a very good consultant. I have met clients who quite a bit like being with them. And I’ve met clients who are rather stuck in their roles because the consultant is between a rock and a hard place and doesn’t know how to help them get unstuck. But at the same time, I’ve met a lot of people who are not consultants and have no business being consultants. And I’ve met a lot of functional idiots who couldn’t carry out the work tasks the consultant recommended, even if they tried.
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Implementing Changes
Implementation is a matter of considerable debate in the profession. Some argue that helping the client put recommendations into effect means the consultant is managing and, therefore, exceeding the legitimate boundaries of consulting. Others counter that viewing implementation as solely the client’s responsibility is unprofessional, since the work of the consultant is of no value if it is not put into practice (and, as we all know, practices can come in shades of good and bad). Both camps make some good points.
An engagement might be followed by a second phase in which the consultant installs the system just recommended. But if to this point the work has been anything but collaborative, the client is likely to refuse what could seem a proposal to shift the nature of the relationship quite suddenly. Both in the real world and in the examples that I have used here, the path from problem finding to problem solving requires considerable trust and cooperation on both sides, a level of working together that earns its name.
The consultant’s successful involvement hinges on understanding, at the outset, whichrecom-mendations are likely to be accepted and acted upon by the client. This requires insightinto the client’s culture and the kind of changes the client is ready and able to make. Theconsultant must also be sensitive to the implementation steps that are most likely to lead tosuccess. If these steps involve only small changes, then the consultant may only belooking for what some people might term ‘small wins.’ But if these are the steps that willlikely lead to success, then quibbling over the size of the changes will not serve the clientwell.
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Building Consensus & Commitment
The degree to which a group identifies well and comes to agreement on the nature of problems and issues and on the kinds of corrective actions that should be taken pretty much determines the usefulness of any engagement. If you get a dysfunctional group here, no engagement is going to be useful, and I don’t care who the consultant is, what the pay is, or how much they promise to bring about needed changes. A second level of useful operating is in the nature of the recommendations made and the degree to which they are actually followed. Here, a lot depends on the persuasive powers of the consultant and on the process by which agreement (or not) is reached.
For me, effective consulting means persuading the client to take certain actions. But that only scratches the surface. Behind that is sufficient agreement in the organization that the actions make sense—not just getting the client to make a move but also ensuring enough support exists for the move to have some chance of succeeding. It is obvious to me that a consultant needs superb problem-solving ability and, more importantly, the ability to persuade the client that the way the consultant sees things is indeed the way to see them. And also important is getting enough key players on board so that whatever it is they have agreed to has a chance of not flopping. This winning consultant must also have a process for figuring out whom it is important to involve and how to involve them.
Consultants can assess and cultivate a client’s commitment and readiness to change by reflecting on these questions:
The client usually accepts certain categories of information quite readily. But we often sense a strong resistance to information that falls into the last category. The motives for these expressions of resistance are usually not very hard to figure out. They are not hard to figure out because the reasons, even when they are unexpressed, tend to be ones we consultants are very familiar with. For example, the client very likely has some good reasons for either resisting or being reluctant to even appear to accept, much less to actually accept. But a lot of the reasons that get offered are pretty weak. And they are weak because the client is making poor use of category 3 information. And this poor use of category 3 information is getting in the way of the client’s organizational self-help remedy. And that’s why it is in the client child’s interest for the consultant parent to be concerned with this issue.
Besides increasing commitment through client involvement during each phase, the consultant may spark enthusiasm with the help of an ally from the organization (not necessarily the person most responsible for the engagement). Whatever the ally’s place in the organization, he or she must understand the consultant’s purposes and problems. Such a sponsor can be invaluable in providing insight about the company’s functioning, new sources of information, or possible trouble spots. The role is similar to that of informant-collaborator in field research in cultural anthropology, and it is often most successful when not explicitly sought.
Skillfully conducted, interviews for gathering information can simultaneously create trust and lay the groundwork for a broad-based acceptance of the need for change throughout the organization. The consultant’s approach should make it clear that the purpose of the interviews is not to find fault and assign blame but rather to unearth useful, if not always easy to say, ideas for improving the organization. If everyone at all levels of the organization comes to see the interviews as part of a process leading to helpful change rather than part of an undesirable inquisition, the interviews can serve a second-purpose: helping the consultant learn where potential resistance and support are in the organization. More often than not, interviews reveal better answers and greater willingness to tackle tough problems than the consultant gets from talk with upper management. And the conversations in the interviews also help issue in more sound solutions.
It is especially significant to have a good relationship with the principal client when trying to develop a consensus and commitment. From the start, the relationship should be a collaborative one, in which both the client and I express our concerns and search for pleasant solutions. Each meeting should serve as a two-way information exchange, in which both the client and I report on what we’ve been up to since our last meeting and discuss what we should do together next.
While I have perhaps gone a bit overboard in depicting the level of collaboration possible, I do firmly believe that effective management consulting only really happens when the relationship shifts into a collaboration zone that most clients do not expect and cannot imagine. Effective consulting is not simply a matter of dodging a few land mines and following a trail to the executive suite. Most of the time, success requires some serious upward working-level interactions and a lot of engagement by the senior managers who initiated the consulting project.
