Words: 2001
INTRODUCTION The management of a consulting project calls on a variety of skills. This is an actuality that has been stressed throughout the course lectures, seminars and cases as well as throughout the course literature. The fact that consultants must integrate their skills when conducting a consulting project is as clear-cut as it is evident. But if no skill can be used in isolation from the others, is there such a thing as a most important competence of a successful management consultant?
In order to find an answer to the question stated above, this term paper will draw on the content of course 611 Management Consulting, including lessons learnt from company visits and guest lectures. I will start off by listing the three primary competences characterizing a thriving and successful management consultant. Thereafter I will deliberate on which one of these three competences I believe can be regarded as the most important competence. I will close the discussion with a brief conclusion, summing up my main standpoints.
AN OVERVIEW OF THE CONSULTANT’S FUNDAMENTAL COMPETENCES Wickham & Wickham identifies three types of skill that effective management consulting is based on: analysis skills that enable new opportunities and possibilities to be identified on behalf of the client organization, project management skills that enable those ideas to be delivered to the client organization under budget and time constraints, and relationship-building skills that sell ideas and provide the leadership that takes the client team forward.
I believe this classification to be exhaustively complete, and the skills mentioned in Armbruster and on seminars and company visits to all be feasibly subsumed under these three categories of skills. ANALYSIS SKILLS The ultimate purpose of a consulting exercise is to create value for the client business. In order to do so, it is necessary to gain an understanding of the business and the possibilities and opportunities it faces. This demands for a thorough analysis of the client business involving taking information about its situation and processing that information so that effective decisions can be made.
CapGemini Consulting emphasized the importance of having a logical analysis as the formal approach to solving problems and the importance of having a hypothesis driven approach in order to reach the end goal in an efficient manner. The importance of analysis skills is thus apparent, especially when reflecting upon the skills used in solving each one of the four cases; we always began with identifying available and needed information and thereafter proceeded with processing and drawing meaning out of that information.
The first case presented by CapGemini Consulting was particularly focused on making use of this kind of analytical approach. PROJECT MANAGEMENT SKILLS It can be concluded that by managing the analytical skills, good and well-grounded business ideas can be created. However, the business ideas created must also be achievable in practice. This is done by managing the consulting exercise as a formal project, i. e. defining clear objectives and outcomes, sequencing and prioritizing tasks, and developing formal plans and realistic budgets.
Case four is the most prominent encounter we have had with this type of skill. Composing a project proposal calls for a complete understanding of the elements constituting a consulting exercise. In order to be successful, a project proposal must include a clear step-by-step approach on how the consulting firm will reach a concrete recommendation for the client business. RELATIONSHIP-BUILDING SKILLS In addition to the analytical skills and the project-management skills, an effective consultant must have the ability to communicate ideas and positively influence others, i. . have relationship-building skills. The business ideas will be of little value if people in the client business do not go along with them. Critical relationship-building skills include building rapport and trust with the client, negotiating objectives and outcomes, working effectively as a member of a team, and demonstrating leadership. Jackall (1988:144) enhances the importance of relationship-building skills by stating that the real issues consultants face are the political and social structures of corporations rather than the problems defined within them.
When working with case two and three focused on the human and the political perspective of management consulting, respectively, the value of identifying the power base and understanding the patterns of dependence and interdependence within the client organization became evident. Case three particularly called for an understanding of the political and human factors, since the presentation was intended for the actual client and not for the consulting mentor as was the case in the second assignment. THE KEY COMPETENCE IS THE ABILITY TO MANAGE RELATIONSHIPS Excellent logic and analysis will not take you all the way.
This statement makes a central point regarding the consultant’s skill profile; although both analysis skills and project management skills are critical, they will not be your career drivers. The ability to manage relationships, involving central mechanisms such as trust relations to clients, involvement in networks, and being referred between clients, is what ultimately brings in revenue and what promotion consequently depends on. For this reason I believe relationship-building skills to be the most important skills of a successful management consultant. I will hereupon argue that analysis and project-management skills are so alled basic skills; they are necessary but not career drivers. I will then argue that relationship-building skills are what matters, largely due to the fundamental features of the consulting services. Furthermore, I show how relationship-building skills increase in importance as the consultant climbs the career ladder, how these skills increase the consultant’s powerbase within both the client and consultant firm, and how these skills serve as the basis for promotion. By looking at the recruitment process, one can easily see that the analysis skill is expected to essentially already be in place.
By mainly recruiting graduates from business and engineering schools, a self-selection of candidates with analytical skills precedes the consultant firm’s screening. Furthermore, many consulting firms base their choice of candidates on grades, arguing that one cannot have great analytical skills while having low grades in statistics and finance. Supporting the belief that analysis skills are essentially in place when the employees enter the firm is the fact that new recruits initiate their careers as analysts before being promoted to consultants.
Hence, the analysis skill can be thought of as a necessary hygiene-factor, but not as a driver for success. A similar reasoning is applicable to the project management skills: they are necessary, but not the basis for advancement. These skills are not expected to already be in place, but they are expected to be acquired along the way. Nearly all consultant firms have systems for spreading the accumulated knowledge. For example, Cepro, Lagerkvist & Partners, and Cordial have continuous knowledge sharing sessions and knowledge databases with information from previous projects.
Cepro has something called RFK (“request for knowledge”) and Lagerkvist & Partners has templates for how case presentations should be built and designed. In summary, analysis skills are expected to already be in place and worth noting is that they are most important in the beginning of ones career as an analyst. Project management skills are assumed to develop over the course of time, through experience and through taking part of the knowledge-sharing systems. Moving on, Deloitte states that after the first promotion from analyst to consultant each promotion demands more selling.
That is, the higher the position the more selling skills are demanded from the consultant. Armbruster backs this by pointing out that the higher hierarchical level the closer the contact between consultants and client management boards. This implies that relationship-building skills become more and more important the higher up one gets. Thus, one can argue that the importance of relationship-building skills increase as the consultant climbs the career ladder. But the importance of relationship-building skills is not restrained to the professional progression of the consultant.
The features of the consulting services cement the overall importance of these skills. Consulting services represent intangible and hard to evaluate resources, and involve information asymmetries between economic actors as well as uncertainties about service quality, actor behavior, and business transactions. These features of intangibility and quality uncertainty speak for the importance of personal trust, networks, and word-of-mouth effects. In analyzing the market behavior of consulting firms, Barchewitz and Armbruster found that no significant correlation between marketing and growth could be stated.
Instead, it was concluded that consulting firms grow on the basis of factors that are difficult to influence by marketing tools: client’s trust and their recommendations to other firms. A consultant can barely acquire trust or generate word-of-mouth effects unless not only the results but also the interaction between the client and the consultant satisfy the client. Consequently, the growth of a consulting firm could be said to largely depend on the relationship-building skills of the consultants.
Since the growth of the firm is likely to have a positive impact on revenues, the basis for promotion, an additional argument for why relationship-building skills are the most important for a consultant can be found. The relevance of trust relations between consultants and clients is further elaborated upon from the embeddedness theory point of view. Transaction cost economists model the purchasing decision of consulting services in terms of search, information, and anticipated monitoring costs. From the embeddedness viewpoint, by contrast, such cost considerations cannot be precise enough to guide a purchasing decision.
The cost estimation would be so complex that it is not surprising if most executives instead make decisions largely on the basis of social tie quality. This premise implies an opportunity for the consultant to build a power base within the client firm by managing relations well. According to Arkwright, continuous relationships means developing client value over time. Consequently, this would then lead to a more influential position for the consultant within the consulting firm, since creating value for the client is the ultimate purpose of a consulting exercise, and in the end of the day is what brings in revenue.
Regarding the consulting exercise, the outcome will depend both on the client and the consultant. This makes the positive involvement of all organizational levels within the client firm as well as building a good rapport with the client highly important. Furthermore, client-consultant relationships have been found to be relatively stable. Often they even endure an executive’s or consultant’s change of employer, meaning a client executive then hires the same consultant when working for a different firm.
This is of great importance for the consultant, as having a steady client base means having an even stronger power base within his or her own consulting firm. Thus, maintaining a good relationship with clients could be said to ensure the maintaining of a higher position within the management consultant firm. CONCLUSION I conclude by summarizing the two main points of attention: •the relationship-building skill is the overall most important competence for a successful consultant •the importance of relationship-building skills increase over time, as the consultant climbs the career ladder
The first point of attention is based on my idea that analysis skills and project-management skills are so called basic skills, and of limited use if the client firm’s management cannot be convinced of the proposed approach. It is furthermore based on the fact that relationship-building skills are crucial not only for the single consulting exercise, but for the survival of the consultant firm as a whole given the features of the industry.
This fact implies that it is crucial also for the individual consultant to manage relationships with clients in order to survive and succeed. Thus, it is not surprising that the relationship-building skills are claimed by some to be the basis for promotion and advancement. The second point of attention is based on my idea that the importance of relationship-building skills increase, the analysis skills become less important and the project-management skills are expected to follow as the consultant climbs the career ladder.