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Management Consultancy
What is management consultancy? How has it developed? How does it affect businesses?
This book answers these questions and introduces the field for those looking to develop
a career as a management consultant.
Providing a thorough introduction to management consultancy, Morgen Witzel
covers the topic from a range of perspectives including the field's historical development,
the client's perspective, business analysis, return on investment, consulting failures, ethics
and accountability and the growing importance of sustainability.
With exercises and case studies throughout, this practical textbook provides students
with a rounded and critical understanding of what it means to be a management con-
sultant and in so doing, will help readers emerge as employable management consultants
of the future.
Morgen Witzel is an internationally known writer, lecturer and thinker on the problems
of management and leadership. His books have been published in twelve languages and
have sold more than sixty thousand copies worldwide. He is a Fellow of the Centre for
Leadership Studies, University of Exeter Business School, UK and a Fellow of the Royal
Society of Arts, Manufactures and Commerce.
Morgen Witzel’s book on ‘management consultancy’sets out new ground in a field
which is insufficiently explored in the academic literature. It deals with both the con-
ceptual and practical dimensions of consultancy in a readable and interesting manner. His
coverage of this very interesting topic is most thorough and his analysis is indeed robust,
setting the coverage in a truly global business setting. The book is clearly written and
accessible to not only undergraduates and MBAs in the subject but also interested
practitioners.
Malcolm Warner, Professor and Emeritus Fellow, Wolfson College and
Judge Business School, University of Cambridge, UK
The book brings the landscape of management consultancy to life. You’ll discover how
management consultants engage clients, work with problems, add value, and make a
difference. For anyone thinking about management consultancy as a career, making their
way in the field, or wondering whether to hire a firm, this provides invaluable guidance.
Nigel Guy Linacre, Co-Founder of LeadNow
Witzel acknowledges that management consultancy is a vast and changing subject and so
it is no mean feat to have written such a well-structured and engaging book. Students of
business will find a rigorous analysis of what it is to be a management consultant, sup-
ported with practical exercises and a range of global case studies. However, the relevance
and value of the content extends much further. With its detailed overview of subjects from
client engagement to ethics and professional standards, Management Consultancy earns its
place on the bookshelves of management consultants, both generalists and specialists as well
as their clients.
Alison Hogan, Managing Partner, Anchor Partners Ltd, UK
Management Consultancy
Morgen Witzel
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First published 2016
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
and by Routledge
711 Third Avenue, New York, NY 10017
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2016 Morgen Witzel
The right of Morgen Witzel to be identified as author of this work has been asserted by
him in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act
1988.
All rights reserved. No part of this book may be reprinted or reproduced or utilised in
any form or by any electronic, mechanical, or other means, now known or hereafter
invented, including photocopying and recording, or in any information storage or
retrieval system, without permission in writing from the publishers.
Trademark notice: Product or corporate names may be trademarks or registered trademarks,
and are used only for identification and explanation without intent to infringe.
Also in the USA and Canada
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
Witzel, Morgen.
Management consultancy / Morgen Witzel. -- 1 Edition.
pages cm
Includes bibliographical references and index.
ISBN 978-1-138-79883-0 (hardback) -- ISBN 978-1-138-79884-7 (pbk.) --
ISBN 978-1-315-75635-6 (ebook) 1. Business consultants. 2. Management. I. Title.
HD69.C6W58 2016
001--dc23
2015018622
ISBN: 978-1-138-79883-0 (hbk)
ISBN: 978-1-138-79884-7 (pbk)
ISBN: 978-1-315-75635-6 (ebk)
Typeset in Bembo
by Integra Software Services Pvt. Ltd.
Contents
List of illustrations vi
Acknowledgement vii
1 Introduction 1
PART I
What consultancy is 7
2 What is management consultancy? 9
3 From company doctors to strategic partners 28
4 The roles of the consultant 40
5 The client 55
PART II
What consultants do 71
6 Analysis 73
7 Problem solving and capacity building 86
8 Impact 102
9 Failure and recovery 113
PART III
Issues in management consultancy 127
10 Ethics in management consultancy 129
11 Consultancy and sustainability 143
12 A career in consultancy 154
Bibliography 159
Index 165
Illustrations
Figures
3.1 The ‘Boston Box’33
3.2 The McKinsey 7-S framework 33
5.1 Presents a very simple framework for describing different types of
relationship 64
Tables
2.1 Comparison of old and new models on key dimensions 22
4.1 Professional standards for consultants 45
7.1 Weighted Options Matrix 88
8.1 Criteria for evaluating consultancy services 106
10.1 Examples of unethical behaviour by consultants 133
10.2 McNamara’s ethical standards for consultants 134
10.3 IMC USA code of conduct 134
10.4 Example of a Markkula Center exercise 138
11.1 Five areas of global risk 146
Acknowledgement
This book could not have happened without the contributions of the many consultants I
have met and worked with over the years, from sole practitioners to members and
former members of very large consultancy firms and academics studying the consultancy
profession. To all of them, past and present, my grateful thanks.
A few individuals must be acknowledged. Bennett McClellan was kind enough to
lend me his PhD thesis on the consultancy profession, which became a very valuable
source when discussing the tricky question of impact. Bennett also kindly gave permission
to reproduce material from it. My thanks also to Shelly Palmer for permission to quote
extensively from his excellent blog on data analysis.
Dominic Barton, Matt Krentz, Simon Hayward and Andrew Hooke kindly agreed to
be interviewed for this project and gave generously of their time. Readers will agree, I
am sure, that their insights have added a great deal of value to this book.
My thanks go also to Terry Clague at Routledge, whose idea this book was and who
commissioned me to write it, and to the ever-helpful and unfailingly courteous Sinead
Waldron, who saw it through to production. Many thanks also to Jaya Dalal for her
copyediting and her patience.
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1 Introduction
Management consultancy is one of the preferred career choices for business school students
around the world. Surveys for the past several years of MBA and MSs students have
shown that management consultancy is one of the top five –sometimes top three –
choices of career and surveys of undergraduates also include consultancy among the top
ranked choices. Consultancy has a perennial appeal for young people at the beginning of
their business careers.
Why so? Consultancy has a certain glamour about it, it is true, but this glamour is not
always deserved; a lot of consulting work is pretty mundane and un-glamorous. It
appeals to people who enjoy problem solving, but all management is full of problems
requiring solving. Students sometimes tell me that they think they would enjoy the
challenge and stretch of consulting, but again, there are plenty of other arenas in business
where challenge and stretch can be enjoyed.
If you want to be a successful management consultant, you have to be prepared to
work extremely hard for long periods of time. You must be able to put your client’s
interests first at all times, and not allow your own prejudices or preferences to interfere.
You need to be a good diplomat, and to have very high professional standards which
must never be allowed to slip. You need to have a very strong set of personal and
professional ethics.
You will need to be a good analyser and problem solver, but most of all, you will
need to be different. Diversity is the breath of life in management consultancy. Consulting
teams are expected to have a great deal of knowledge at their fingertips; no one expects
them to know more than their clients, but they must know things that are different, that
bring new perspectives and new ideas to the client. That means consultancy firms are
looking for people who have different experiences, different approaches to life, different
ideas. If you want to be a management consultant, then the advice from the professionals
is: make yourself interesting. Gain different experience, learn different knowledge, learn to
think about problems in new and different ways.
Knowledge is the consultant’s stock in trade. Without it, he or she has little to offer
clients. As this book will make clear, the would-be consultant must make personal
learning a priority, and must continue do so throughout the rest of her career. Knowing
how to be a consultant is not particularly difficult; again as this book will make clear, the
principles are pretty simple. But you will only be able to make those principles work if
you can master the kinds of knowledge that clients need, and bring it to them in exciting
and innovative ways.
I make this point because getting a job in consultancy is not as easy as it used to be.
Back in the 1990s when the profession was growing rapidly, consultancy firms used to
descend on business schools and scoop up their best and brightest talents, usually based
on the marks they were awarded, take them away and train them into consultants. Those
days are passing, and for some consultancy firms, have already passed. Fewer consultants
are being hired, and the firms are being much more choosy about the people they do
hire. As we shall see in Chapter 12, they are looking for distinctive competences, not just
brain power or analytical ability.
Therefore, if you want to be a management consultant you need to concentrate on
building up your own skills and knowledge base and making yourself distinctive. This
book will tell you what kinds of things you need to know, what the tasks of the con-
sultant are and how you need to adjust to bring your own knowledge into line with
those requirements. This book will not teach you everything there is to know about
management consultancy, because the subject is vast and changing, and the most
experienced consultant in the world does not know a fraction of all there is to know.
Every client is unique; every client engagement is unique; client needs are constantly
changing and evolving; and consultancy firms are changing and evolving too. Knowledge,
for a management consultant, is a journey, not a destination. For would-be management
consultants, this book is the beginning; but only a beginning.
Structure of the book
In writing this book, I have assumed that the great majority of the audience will be
MBA, MSc or undergraduate business students, probably reading this module in con-
junction with a taught module or course on management consultancy. There are therefore
a number of student exercises, things that you can do either in class or in independent
study. I urge you to complete all of these and use them as bases for reflection both now
during your course and later. There are also a number of case studies; these are intended
for classroom use and discussion, but there is nothing to prevent students from considering
these as part of independent study.
Part I of the book defines the nature, tasks and roles of management consultancy.
Chapter 2 introduces students to two different but related approaches to management
consultancy. The first is the process model, which describes management consultancy as a
series of tasks and steps that need to be carried out including negotiation, analysis, iden-
tification of options, presentation of options and final agreed solution. The process can
also include implementation of the solution, although some consultants and consultancy
firms prefer not to get involved in implementation. The second is the client engagement
model, which focuses on the relationship between client and consultant. In the client
engagement model, maintaining the relationship should be the first priority of the con-
sultant, because unless a strong relationship exists, it is unlikely that the steps of the
process can be carried out successfully.
The notion of the engagement is crucial. Different consultancy firms use different
terms, such as project or assignment or study, but I prefer engagement because it suggests
a relationship of equals between consultant and client. That is an important point which
must never be forgotten. Clients call on consultants because they need help, but that does
not mean clients are helpless. They know as much, indeed far more, about their own
business than the consultant does, and the consultant must be humble enough to realise
this. A good engagement will only occur if there is mutual respect between both parties.
Chapter 3 gives a brief introduction to the consulting profession, its history and pre-
sent condition. Several figures from the profession –Dominic Barton, managing director
2Introduction
of McKinsey & Company; Matt Krentz, senior partner and global leader of the People
team at Boston Consulting Group; Simon Hayward, chief executive officer of Cirrus
Connect; and Andrew Hooke, chief operating officer and head of government practice
at PA Group –then offer their reflections on directions in which the industry might go
over the next ten years.
Chapter 4 moves on to look at the role of the management consultant in more detail.
Or rather, the roles: one of the points made in this chapter is that different clients will
expect consultants to play different roles, depending on the client’s own situation and
needs. Part of the chapter is given over to role theory and how consultants can apply it
to their own work to build better and stronger client engagements. Other themes in this
chapter include the values of the consulting industry and also the professional standards
expected of consultants by clients and by the consultants’own employers, the
consultancy firm.
This last theme is particularly important. Consultants must have very high levels of
professional standards and stick to them, all the time. A German business magazine once
referred to management consultants as the ‘Jesuits’of business (Edersheim 2006). It is not
an inapt comparison. Purity and clarity of thinking and behaviour are essential for
consultants if they are to be successful.
Chapter 5 then moves on to the most important people in the management con-
sultant’s universe, the client. (Very few management consultants or consultancy firms
refer to the people who engage their services as ‘customers’; some firms ban the use of
the term altogether. ‘Clients’is the preferred option.) We look at the reasons why clients
engage consultants, and discuss how important it is for consultants to know in advance
why they have been brought in and what clients’expectations are. We also look at how
clients choose consultants before once again returning to the all-important client–consultant
relationship, which we examine this time from the client’s perspective.
In Part II we move on to look at what consultants do and how they deliver value to
clients. We begin in Chapter 6 with analysis, the gathering of data and information and
understanding it in order to solve problems and reach recommendations. Consultants
conduct analysis on three levels. First there is situation analysis, which involves taking a
broad overview of the client organisation. Before focusing on individual problems it is
essential to have as complete a picture as possible of the client organisation, its market
position, environment and resources; without this picture, it can be difficult if not
impossible to arrive at realistic recommendations.
Second, there is problem analysis, the focusing in on the things that require to be
changed. Often clients will already have an idea of what their problems are –that is why
they engaged consultants in the first place –but in this chapter we make the point that
the problems clients think they have sometimes mask other, deeper rooted problems of
which the client is unaware. We look at analytical techniques for getting to the heart of
the issue, such as Why–Because or Five Whys analysis. Finally, there is solution analysis,in
which the gathered data and knowledge are sifted for potential solutions.
In reality, time pressures and client demands usually mean that consultants are doing
two and sometimes all three stages at once, and often problem solving on the fly at the
same time. In reality this can be a good thing; action learning, which we also introduce
and discuss, can be a powerful tool for learning and reach insights that a more linear
approach would not reach. This is especially true if client managers are directly involved as
members of the consultancy team, and the book argues that it is very important to have
this level of client involvement.
Introduction 3
Chapter 7 moves on to problem solving and capacity building, the end games of any
consultancy assignment. We start by running through several generic methods of problem
solving, though of course consultancy firms –especially large ones –often have their own
‘house’techniques. Techniques such as weighted options, abstraction, reduction, analogy
and hypothesis testing are considered along with their strengths and weaknesses. We also
discuss the importance of recognising bias in problem solving. Most of us suffer from
biases in our thinking; the important thing is to recognise what those biases are and make
allowances for them so that we get a solution which is right for the client, not right for
us. The chapter then moves on to capacity building and discusses the key areas where
capacity is most often needed, in systems (including technology), knowledge and people.
Chapter 8 looks at the issue of impact, the value that consultants deliver to clients.
There have been difficulties in the past in measuring impact, leading some sceptics to
argue that consultancy services offer nothing of provable value. Yet it is very important for
consultants to demonstrate that they do have impact, and that they do make a difference to
their clients. After defining impact, the chapter goes on to describe techniques for measuring
and stating impact and lays out what consultants need to do during and after engagements
to measure impact. At the heart of this chapter is the notion that true impact is deter-
mined by the client; whatever the client values from the engagement constitutes impact.
Not all this value can be measured quantitatively, and it is a mistake to assume that
measures such as increased growth, profit, market share and so on constitute verifiable
measures of impact. True impact is often much harder to find and measure.
Finally, Chapter 9 looks at consultancy failures and recovery. Every consultant
experiences failure at some point in his or her career, and one of the measures of a great
consultant is how well they recover from failure and retrieve the situation to create
client satisfaction. We define the causes and nature of consultancy failures, which can
stem from the behaviour and actions of consultants, clients or both. We look at some
common types of failure and show how failures can be detected and dealt with early on,
before they can grow to the point where they damage the engagement, and finally we
talk about learning from failure and how important it is if failures are not to be repeated.
Every failure damages the consultant and the firm he or she works for; keeping failures to
a minimum is essential for long-term success.
In Part III we look at some key issues in management consultancy today and tomorrow.
We begin in Chapter 10 by looking at ethics in management consultancy, and stress the
vital importance of a strong ethical outlook matched by high professional standards. We
discuss various approaches to ethics, the contradictions between these approaches –for
example, the difference between what is right and what is good, and how the two do not
always match. We then apply these approaches to consultancy, and go on to suggest
three frameworks for ethical problem solving that consultants might find useful.
Chapter 11 goes on to discuss sustainability, a hot topic in the consultancy and business
worlds at the moment. We discuss sustainability, indicating that it is a much broader
topic than mere environmental sustainability, important though that is. The book
recognises that people will have varying personal views on sustainability. For the consultant,
those personal views do not matter. What does matter is that clients, in ever increasing
numbers, are turning to consultants to help them with sustainability-related problems and
to build capacity to help them become more sustainable. This means that all consultants
must put sustainability on their own agenda: they must learn what it means, see what
new developments in sustainability are going on and use their knowledge to help clients
build capacity and solve problems.
4Introduction
Finally in Chapter 12 we come full circle back to the idea of careers in consultancy.
We will discuss briefly what consultancy firms are looking for when they hire and the
characteristics of a good consultant, and then what consultants might consider doing to
further develop their own careers.
Throughout the course of this book, I have assumed a fair amount of prior business
knowledge, gained either from studies or through experience, and have not defined
general business concepts in detail, save as they relate directly to management con-
sultancy; this is a book about consultancy, not a general management textbook. If I use a
term with which you are not familiar, then you should look it up and familiarise yourself
with it as soon as possible. The terms I mention here are the bread and butter of
management consultancy, and you need to understand them and what they mean.
What to do once you have read this book
The first thing, of course, is to act upon its principles. In my view there are three things
on which you should concentrate if you are going to be a management consultant; and
further, even if you change your mind about your priorities or are unable to find a place
as a consultant, these three things will still stand you in good stead, in business and even
in life itself.
Cultivate the highest professional standards. Follow the list of standards set down in
Chapter 4, and live by them. Expect nothing but fully professional behaviour from
yourself, and act accordingly. You do not have to wait until you graduate to do this; start
now, and practice professional behaviour until it becomes natural to you. Recruiters will
be impressed, and you will stand out from the crowd. Your new employers will be
impressed too, and will mark you down as someone to watch.
Make knowledge your friend.‘If I found out I only had two days to live’, a management
consultant once said, ‘then I would begin studying coffins’. Be curious about everything;
not just business problems but the world around you. Art, music, literature, philosophy,
biology, chemistry, physics, the air and sea and sky and land around us and, above all, the
people we meet and work with and interact with, can all serve as diverse sources of
learning. Learn how to learn, how to assimilate and store and create knowledge. Practice
doing so every day, until thinking and learning are as natural as eating and breathing.
Practice analysis and problem solving, all the time. Take every opportunity to work on case
studies, exercises, puzzles, anything that requires you to exercise your brain to work out
problems and find solutions. The analysis and problem-solving parts of your brain are
like muscles. Flex them, exercise them, keep them working and over time they will
build up and become stronger. After a while, problems that will leave your colleagues
baffled will yield up solutions quickly to you, because you know how to study them and
analyse them, and you know the way to generate answers to questions.
Management consultancy is not an easy option. The work is hard, and often it is dull
and unglamorous. But the rewards, in terms of helping other people and other organi-
sations and making a real contribution to business and society, and in terms of personal
development, can be very great indeed. If you are set on a career in management con-
sultancy, read this book and pay close attention to your studies. And above all, as we said
earlier, make yourself interesting.
Introduction 5
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