Management Consultancy Redefined
November 6, 2015
By Employment Law Partner, Simon Horsfield
According to Wikipedia, “management consulting is the practice of helping organisations to improve their performance, operating primarily through the analysis of existing organizational problems and the development of plans for improvement.”
Now, whilst we could debate at length what management consultants actually do, it seems pretty clear that they will all share the ultimate aim of improving an organization’s performance one way or another. So, the first half of the Wikipedia definition is hard to argue with.
There is a big problem, however, with the second half of the definition and, based on our discussions with clients, it seems to be a problem that’s endemic in the management consulting industry: management consultants analyse problems and develop plans for improvement, but then what? All too often they disappear, leaving the client with a thick glossy report and a very big invoice. Whilst the management team may be perfectly capable of implementing the management consultant’s recommendations, they are frequently too busy looking after ‘business as usual’ issues, meaning that the consultant’s recommendations are never actually implemented, or are implemented in a half-baked way
There is another problem with the definition, too, which is that many of the people doing the analysing and making the recommendations, whilst very bright, tend to have very little (if any) experience of working in industry. Sure, they know the theory and can talk a good game, but will they really be able to uncover the true problems in an organization, or will they just pick up on what management, and the theory books, tell them?
Put it this way: you could study the theory of how to return a tennis serve for years, including reading articles, watching clips and even talking to the best tennis coaches. However, when the moment of truth comes and you are facing down the barrel of a Djokovic serve, the ball will be past you before you even know what has happened – if you haven’t already run a mile that is. Matthew Syed, journalist and author, sums up the experience beautifully in his book, Bounce: the myth of talent and the power of practice (albeit he was facing a Federer serve). The simple fact was that, despite having the finely honed reflexes of a former international table tennis player, Syed was unable even to get his racquet to the ball in response to a Federer serve.
Syed uses the experience to bring to life the theory that you only become an expert in something by engaging in at least 10,000 hours of purposeful practice. It is through these periods of practice that you begin to learn to read the signals and instinctively know what is going to happen before it actually happens. So, in the tennis context, you read from the way your opponent is standing, the angle of the ball toss, the shape of the racquet swing and so on, to such an extent that you anticipate where the ball is going to go.
This level of experience should never be underestimated, particularly in a business context. Yes, theory might help you to identify a problem, but it is only the experience that will help you really understand the consequences of that problem and the best solution for overcoming it.
The final problem with the definition is that it makes no mention of the fact that management consultants are remunerated for their work, often handsomely. And this brings us neatly on to the curse of the day rate. Let’s not beat about the bush here: partners in management consulting firms are targeted firstly to get their teams fully utilised and secondly to improve leverage within their team (i.e. resourcing the work as cheaply as possible) in order to maintain acceptable levels of profitability. As a result, clients rarely see the partner who presented so eloquently to them when they pitched for the work. Instead, they are presented with an army of junior and mid-ranking consultants who have no incentive to do the work quickly, because the firm is being paid on a day rate basis for their services.
Surely, there must be another way?
At gunnercookeConsulting, we are redefining the way that management consultancy services are delivered in three very specific ways:
1. Our consultants don’t just advise and recommend; they also work with their clients to ensure that their recommendations are implemented, both through effective programme management and through hands-on delivery of specialist tasks.
2. All of our consultants have a minimum of 10 years of experience in senior positions in industry, which means that they can genuinely read whatever is ‘served’ at them and design a practical and workable solution.
3. We have abandoned the day rate in favour of price certainty and value billing. So, we have the flexibility in our model to offer fixed prices, gain share arrangements and fee for equity swaps. This means that all of our consultants have a degree of ‘skin in the game’ and are appropriately incentivised to deliver successful outcomes for their clients as genuine business partners.
We believe that this is management consulting redefined and we’d suggest the following gunnercookeConsulting definition, ”management consulting is the practice of senior industry experts partnering with organisations to help them improve their performance, operating through the analysis of existing organizational problems, the development of plans for improvement and the successful implementation of those plans.”