Management Consultant : Mastering the Art of Consultancy

318 Pages·2010·18.95 MB·English

by  Richard Newton

RICHARD NEWTON

THE

MASTER.
THE ART
OF CONSULTANCY

FT Prentice Hall

FINANCIAL TIMES

THE
MANAGEMENT
CONSULTA T
MASTERING
THE ART
OF CONSULTANCY

Learn the answers to the critical questions you
need to ask to be a top management consultant
such as:

• How should you identify and define the services
you will offer?

• Why do clients buy consultancy and what are
they looking for?

• How can you bring maximum value to the client's

organisation?

• How do you engage clients and win work?

• How can you deliver results that will be sustainable
for your client?

• How do you establish long-term relationships
that bring you repeat business with clients?

• When should you say 'no' to a consulting

engagement?

• How do you navigate your way through the potential
ethical dilemmas that face consultants?

Discover the ·client-centric approach to
successful consulting

ET Prentice Hall

IiIi Prentice Hall
. .
FINANCIAL TIMES

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The Management
Consultant

Mastering the art of consultancy

Richard Newton

Financial Times
Prentice Hall
is an imprint of

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First published in Great Britain in 2010

© Richard Newton 2010

The right of Richard Newton to be identified as author
of this work has been asserted by him in accordance
with the Copyright, Designs and Patents Act 1988.

ISBN: 978-0-273-73087-3

British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library

Library of Congress Cataloging-in-Publication Data
Newton, Richard, 1964-
The management consultant : mastering the art of consultancy / Richard
Newton.
p.cm.
Includes bibliographical references and index.
ISBN 978-0-273-73087-3 (pbk.)
1. Business consultants. I. Title.
HD69.C6N495 2010
001--dc22
2009050850

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The Publisher'S policy is to LIse paper manufactured from sustainable forests.

Contents

Acknowledgements / vii

Preface / ix

Introduction / xi

lImB Understanding consultants and consultancy

Consultants and consultancy / 3

2
Why does anyone buy consultancy? / 23

3
Your consulting service / 41

4
The three core processes of client-centric consulting / 58

IImII Consulting engagements

5
Finding and winning work / 77

6
Delivering consulting engagements and satisfying clients / 108

7
The alternative approach - process consulting and facilitation / 132

8
Closing engagements and sustaining results / 147

High-performance consulting

9
Developing long-term client relationships / 169

10
The ethical dimension / 181

11
The language of consulting / 199

12
Knowing when to say no / 220

13
Key consulting tips / 234

14
The client's perspective - buying consultancy / 251

Conclusion / 269

Contents

--------------------------------------------~

.aliII Additional resources for consultants

A
The tools, processes and materials of a consultancy business / 275

B
References / 279

C
Sample proposal letter / 281

Index / 285

Acknowledgements

I would like to thank five consulting colleagues who I started working
with years ago in Coopers & Lybrand. Although our careers have moved
on in different ways, we still work together from time to time. More
often we meet up, share stories and enjoy laughing about the occasion-
ally pretentious side of the profession. They are: Graham Jump, Peter
Meredith, Perry Childs, Richard Ellis and Andy Macey.

Dedication

This book is dedicated to my son Konrad for inspiring me to write the
book, when he admitted that he really did not have the faintest idea
what I did.

Preface

This book is a personal guide to the art of management consulting. It sets
out to help new and experienced consultants to do one thing: to become
better consultants. In simple terms, better means providing help that is of
the most long-term value to your clients. The approach is also simple: to
identify what it is that the best consultants do that their less effective col-
leagues do not - and how you can do it, too. Underlying this is my belief
in client-centric consulting.

The contents are derived from three sources. The first source is my expe-
rience as a consultant (working for Coopers & Lybrand, A.T Kearney,
Ernst & Young and my own company Enixus). Secondly, my experiences
in industry as a client - negotiating, buying and managing consultants.
Finally and most importantly, I have a network of trusted consulting col-
leagues whose ideas have flavoured the book. Like a magpie I have picked
up ideas and concepts throughout my career. I have shifted through
them, throwing away most, keeping hold of the ones I like and think are
precious. Many ideas in this book are my own, but of course I have learnt
from others. I can't remember the sources of all of these, so I am sure
more credit is deserved than I have given.

There were several reasons for writing this book, but two of them stand
out. Firstly, there are comparatively few books on consulting, unlike
many other management disciplines. Look at the business book selection
in a good bookshop or online, and you will find many on strategy, lead-
ership, marketing, delivering change and project management, to name a
few areas. But consulting books are relatively scarce, scarcer than an
industry of its size justifies. There are a few good books on consulting,
but they do not approach the audience in the way I want to.

Preface
--..'--

The second reason comes down to my frequent frustration when I work
with or engage other consultants. The simple truth is that the profession
often does not live up to its own hype. This is not to deny that there are
many brilliant consultants out there, and I have been lucky enough to
work with and learn from a few of them. But there are many consultants
who know they should be better to justify their fees. Worse, there are
some very mediocre consultants who mistake being paid a lot with being
good. As supposed experts in business, it is amazing how often consult-
ants provide inadequate value to their clients.

Management consulting is a large and very varied industry. The range of
skills and services that fall under this title are huge. The difference in the
type of work of the most expensive strategy houses compared to a project
management consultant is so great that they may not even recognise
each other as being in the same profession. There are some books that set
out to address components of this industry. They tend to describe various
tools and techniques of consulting. The best tools and techniques are
only applicable in some situations and even if you know them it does
not make you necessarily an effective consultant. I wanted to write a
book for all management consultants.

The book contains tools and techniques, but it is also intended to make
you think like a consultant: how do effective consultants think about their
work and their clients? Consulting experiences are varied, and each is
unique. By thinking like a consultant, irrespective of the situation you are
in, you will be able to deal with any situation in the most effective way.

Introduction

Ask someone in business to define the title 'management consultant',
and you will get a wide variety of responses, not all of them complimen-
tary! The title covers an extensive range of roles providing a variety of
services. There are no universally recognised standards for being a man-
agement consultant and as a result there are very varying levels of
quality. In addition, many people want to be management consultants
but do not know what it entails.

There are many consulting success stories, and numerous people have
become comfortably well off as consultants. Given this success, it might
be thought that the world was full of praise for management consultants.
Yet, if you ask many customers in the private and public sector about
their feelings and experiences of consultants, you will often be met with
sceptical and even highly negative comments. There are numerous causes
for these responses, but they can be summarised into three major cate-
gories. Firstly, too many consultants simply do not provide sufficient
value to their customers and rely on churning out the same old work
time and time again. Secondly, even good consultants with valuable
knowledge often fail to understand true client needs. Thirdly, it is unfor-
tunate to say, but there seems to be a number of very poor management
consultants. This problem is compounded by the already mentioned
lack of widely recognised standards for consultancy which can be used to
judge or benchmark consultants against.

A key reason for the negative perception of consulting is the fact that too
many consultants are focused on what they have to offer and how they
make money, rather than what clients need. Too many consultants pro-
vide context-free and generiC advice, whereas what clients need is advice
that is tailored to their specific culture and context. Overall, too many
consultants spend too much time trying to be clever, rather than asking
themselves what actually makes a good consultant?

__ .... I;,;.;ntroduction

This book will describe those factors that make good consultants and
how consultants can go about providing client-centric consulting. It
describes consulting from the viewpoint of the client, and so will help
consultants understand what will make them successful. The book will

, ' the book focuses
on the skills of success-
ful consultants , ,

help in deciding on how to provide the most
appropriate services and advice to clients. Rather
than considering the tools and processes of con-
sulting, as most other consulting books do, it
focuses on the skills of successful consultants -
what they do that makes them successful, success in this context being
defined as client results, not only in terms of financial returns for the
consultant. Finally, the book contains many tips from the author's and
his colleagues' years of experience in consulting.

There is a huge number of management consultants and business advi-
sors of one form or another. Management consultancies have been one of
the great business success stories of the past 40 years, with some now
employing tens of thousands of people in worldwide bUSinesses, deliver-
ing significant profits to shareholders and partners. At the other end of
the scale there are thousands of small consultancies and independent
consultants. As employment patterns change, more and more people are
choosing to work as consultants.

There are many attractions to a career in consulting. For some, consulting
may seem the only choice following redundancy from a senior pOSition.
There are many examples of initially despondent redundant managers
finding not only a better income, but more enjoyable work in consultancy.
For others, it is a lifetime career choice that starts from university, even
though few students have any real concept of what being a consultant
entails. Many people enter the consulting profession for a more flexible
lifestyle, although this is harder to achieve in practice than it might seem.
Whatever the reasons for considering it, consultancy is a great opportu-
nity. Companies appear to have an increasing and insatiable demand for
advisors and interim managers. Providing services can be very profitable
and give consultants a high standard of living. But consulting also has
risks. It's an increasingly competitive environment as more people are
drawn to the profession. Select the wrong services or sales approach, and
consulting will be a stressful profession. There is also the constant uncer-
tainty about what happens when the current engagement is complete.

Many people assume that simply because they have some speCialist
expertise, they can be a good consultant. Certainly, expertise is an

essential foundation. This book assumes you have an area of specialist
knowledge and can competently apply the techniques and tools of your
specialisation. But specialist knowledge is not enough. It is not intended
as a tautology when I say that the core competency of a successful con-
sultant is the skill of being a consultant. It is not a profession for everyone
_ there is a specific art to being a consultant.

Although the consulting industry is successful, that success is in jeop-
ardy. Fee rates for many organisations, including some of the largest
firms, are lower in real terms than they were previously. Clients are
becoming more adept at controlling consultants and extracting the best
value from them. More and more people are entering the consulting
industry, meaning that to excel the standards are rising all the time.
Consultants need to raise their game.

This book sets out to provide you with guidance to what makes a great
consultant, irrespective of where you fit amongst the incredible variety of
management consultants. It avoids the constraints of focusing on specific
elements of consulting or approaches to consultancy, and instead takes a
client-centric view of what is needed to provide expert consulting.
Although this book contains approaches, the fundamental questions it
seeks to answer are what makes a great consultant and building on that,
how do you achieve this?

Contents and structure

There are 14 chapters and two short additional reference lists in the
book. The book is broken into three main parts. In the first part
(Chapters 1-4), I explore what it means to be a management consultant
and how to go about setting yourself up as one. In the second part
(Chapters 5-8), I discuss how to go about winning work and delivering
value to clients. In the third part (Chapters 9-14), I discuss a range of
broader issues which set the context for consulting and will give you
some additional tips and techniques to being a successful consultant.

The book has been designed to be read from cover to cover, but you can
dip into it as you require. If you want to reference parts individually, the
detailed contents of each chapter are described in the following table:

Introduction

Chapter title

Consultants and consultancy

2
Why does anyone buy
consultancy?

3
Your consulting service

4
The three core processes of
client-centric consulting

5
Finding and winning work

6

7

8

9

Delivering consulting
engagements and satisfying
clients

The alternative approach -
process consulting and facilitation

Closing engagements and
sustaining results

Developing long-term client
relationships

10 The ethical dimension

Chapter summary

Introduces the key terminology and concepts used
in the book and provides an overview of what being a
consultant means.

Explores how successful consulting starts by
understanding the reasons clients have for buying
consultancy. This is essential knowledge for anyone
wanting to provide client-centric consulting.

Looks at the range of services you can offer as a
consultant and how to position your skills and
experience as a saleable client service.

Discusses the core engagement process and then puts
it in context with the client's change process, and the
client's operational process. Understanding this
relationship is at the heart of client-centric consulting.

As a commercial business, consultants must find
opportunities and sell their services to clients. This
chapter discusses the processes and approach to
winning work.

Investigates the central work of a consultant-
delivering consulting engagements which add value
to the clients.

Describes an alternative approach to expert
consulting - process consulting - which can be
used to deliver entire consulting engagements or as a
tool on an engagement.

All consulting should result in some change in a client,
otherwise it delivers no value. Often the change takes
place and must continue after the consultant has
finished their work. This chapter considers how to
achieve change, and how to sustain it after a
consulting engagement is complete.

Describes the advantages of having long-term client
relationships and how to develop them.

Considers the ethics of consulting, and the potential
ethical dilemmas that regularly face consultants and
ways to deal with them.