CHAPTER 1 MANGEMENT CONSULTING IN PERSPECTIVE

Management Consulting is an independent professional advisory service assisting managers and organizations
to achieve organizational purposes and objectives by solving management and business problems, identifying
and seizing new opportunities, enhancing learning and implementing changes.

Characteristics of Consulting
1. Adding value by transferring knowledge
2. Advice and assistance
3. Independence
4. A Temporary service
5. A business

Employees vs Consultants < The Eligible of a Consultant >

Factors Employees Consultants
Hiring Employees are hired by employers to provide Consultants are required to hire their own
services and generally do not provide services labor and supply services directly to their
through a corporate vehicle clients. Consultants may be incorporated
and/or register a business name.
Expenses Employees are not required to incur employment- Consultants often incur their own expenses
related expenses on their own behalf and will (without reimbursement) and bear the risk of
typically be reimbursed by their employer. profits/losses.
Benefits Employees are usually entitled to “employment Consultants do not participate in typical
benefits” including group medical, disability and employment benefits and plans or periodic
life insurance coverage, stock option/ share employee events and have no entitlements to
compensation programs and profit sharing or sick pay, vacation pay, etc.
other bonus plan.

Purpose of Consulting
1. Achieving organization purposes and objectives
2. Solving management and business problems
3. Identifying and seizing new opportunities
4. Enhancement learning (with Training)
5. Implementing changes

Range of Consulting Services

1. Providing information. Client needs a better, more complete and more relevant info to make right decision.
2. Providing specialist resource. Usually such consultant will be specialists in areas where the client is looking
for short term expertise, or wants to avoid recruiting a new employee
3. Providing expert opinion. The client can choose among several alternatives and seek impartial and
independent third party advice before taking the decision.
4. Developing action proposals. Effectively completed diagnostic work may be followed by the development
of specific action proposals in an area that was diagnosed.
5. Developing systems and methods. Consultant may take full responsibility for choosing the most appropriate
system, establishing its feasibility, adapting it to the client’s conditions and putting it into effect in
collaboration with client’s staff.
Evolving concepts and scope of management consulting
1. Advice or result. Consultants are viewed as assistants, helpers, service providers or even service brokers who
work with clients on various issues for as long as necessary to make sure that tangible and measurable results
are achieved.
2. Management consulting, business consulting or any consulting. Some consultants have felt the need to
stress that their field of activity is not longer management consulting but business consulting
3. Consulting coupled with other business. Management and business consulting is provided by one entity
known as a manufacturer or another business entity.
4. Commoditization is a feature of knowledge management and transfer
5. Outsourcing are activities that the client previously carried out within its normal structure and resources, but
now chooses to contract out to a consultant or another service provider.

When Should a Client Find Consultants?

1. Insecure
2. Threatened
3. Impatient
4. Worried
5. Exposed

Categories of Clients
1. Contact client is the person, or persons, who first approach the consultant and propose the consultant
addresses a problem or issue on behalf of the organization.
2. Intermediate client are the members of the organization who become involved in the consulting project.
They will work with the consultant and provide information. They will sit in on meetings and influence the
way the project unfolds.
3. Primary client is the person or person who have identified the problem or issue the consultant has been
called in to address and who are most immediately affected by it. (owner of the problem)
4. Contract clients play a key role in the consultant selection procedure and in negotiating and signing a
consulting contract.
5. Ultimate clients is the community or group that the consultant cares about and whose welfare and interest
must be considered in any intervention that the consultant makes include members of the organization.
6. Sponsoring clients is the person or persons who provide financial resources for the consultancy & may
direct or indirectly play a role in determining the procedure to follow, choosing the consultant, monitoring
execution & approving the proposals to be implemented

Dimensions of the consultant-client relationship

1. Collaborative Relationship refer to client – consultant collaboration in exchange of information, knowledge,
ideas and competence. There will be an effective consulting whereby various misconception may be
disappear.
2. Knowledge-based relationship refer to transfer and share knowledge between consultant and client when
working together. This requires an understanding of the process of knowledge creation and transfer, driving
forces as well as appropriate allocation of time and responsibilities.
Roles of consultant in consultant-clients relationship
Basic Roles
Resource Roles
1. suggests to the client “what to change”
2. passing the technical knowledge and suggesting solutions.
3. providing technical expertise & doing something for and on behalf of the client:
- supply the information,
- diagnose the organization,
- undertake a feasibility study,
- design a new system,
- train staff in a new technique,
- recommend organizational & other changes,
- comments on a new project envisaged by management and the like.

Process role
1. Suggests to the client “how to change”
2. Passing the approach, methods and values so that the client can diagnose and remedy its own problems
3. helps the client solve its own problems by making it aware of organizational processes of their likely
consequences and of intervention techniques for stimulating change.

Method Influencing the client

1. Demonstrating technical expertise
2. Demonstrating empathy with the client
3. Developing a common vision
4. Using participation and trust
5. Using rewards and punishments
6. Using tensions and anxieties

Consulting and Change

1. Environmental change – can be affected by forces of economic, social and political.
2. Organization change – organization are continually forced to adapt to the environment and to react to new
environmental changes.
3. Change in people – acquire new knowledge, absorb information, tackle new tasks, upgrade their skills,
modify work habits, values and attitudes to the way of doing things in the organization.

Resistance to Change
People resist and try to avoid changes that will leave them worse off in terms of job content, conditions of work,
workload, income, relationships, personal power-base, lifestyle and the life.
Reasons :
1. Lack of conviction that change is needed
2. Dislike of imposed change
3. Dislike of surprises
4. Fear of the unknown
5. Reluctance to deal with unpopular issues
Critical success factor to changes
1. Leadership
 Change requires leadership to lead and direct the change process.
 Should be provided by the managers who are principally responsible for running the organization.
 A consultant is just to facilitate the manager’s task, but not to manage change.
2. Role of innovators and change agents
 A change effort requires a ‘successful start’ by having people who have critical and innovative minds,
enjoy experimenting, can visualize the future, believe that change is possible, and influence others not by
talking about change but by demonstrating what can be achieve.
3. Organizational culture supportive of change
 Every organization should define what is the necessary and optimum pace of change in its sector and try
to adopt it as a common value shared by management and staff.
 To value change and meet the requirements of an organization, people must know that it pays to have a
positive attitude to change and constantly to look for changes from which the organization can benefit.
 Innovation and creativity can be stimulated by financial rewards, public recognition, promotions, making
the job content more interesting, offering training and self-development opportunities.

How to gain support for change

1. Drawing attention to the need for change
 By using the methods influencing the client (demonstrating technical expertise, exhibiting profesional
integrity and sharing knowledge, demonstrating empathy with the client etc)
2. Getting support for specific proposals
 Presenting information to support the selection of a given proposal in preference to alternatives schemes.
 Presenting also the positive and negative aspects of existing or alternatives schemes
3. Personality composition of the audience
 Consultant must be an individual who are poised, confident and have certain amount of self esteem to
influence people to a change process with an optimistic results
4. The informal communication network
 Communications on a highly topical issue appear to produce a greater and more rapid change in attitude
5. Handling objections to change
 Consultant should know how to handle the objection by analyzing why the objection arose
 commence with the items on which agreement is most likely to be reached

Reason and Resolve Conflict

Reasons Resolve
Poor Communication Withdrawal
Refusal to cooperate Smoothing
Poor performance and inefficiency Compromising
Personality and culture clashes Forcing
Non-respect of commitments Confrontation

Why consultant is regarded as a profession?

1. Knowledge and skills - a proper body of knowledge to the profession which acquired through a system of
professional education and training.
2. Service and social interest - Consultants serve the client needs and interests to which they subordinate their
own self interest
3. Community sanction and enforcement - The community recognized the social role, the status, the ethical
and the behavioral norms of the profession.
4. Self-discipline and self-regulation - Exercising collective self-regulation over the application of an accepted
code of professional conduct and over the development of the profession
The Professional Approach
1. Technical competence
2. Impartiality and objectivity
3. Confidentiality
4. Fees, charges and commissions
5. Wider social concerns and client’s ethics
CHAPTER 2 THE CONSULTING PROCESS

CYCLE 1 : ENTRY
First Contacts with Clients
1. The consultant makes the contact
2. The client makes the contact <Client is aware of problems and need for independent advice>
3. First meetings
- Preparing for Initial meeting
- Agenda for the first meeting
- Agreement on how to proceed

Preliminary Problem Diagnosis

1. Scope of the diagnosis - understand the problem correctly, to see it in the wider context of client
organization’s activities, achievements, goals and other existing or potential business and management
problems, and realistically to assess opportunities for helping the client.
2. Methodological guidelines refers to approaches, procedures, techniques and guidelines for a quick
assessment of clients’ businesses
3. Using comparison - strengths, weaknesses, development prospects and desirable improvements.
4. The client’s involvement. Keep continuously dialogue with client to find out how the client feels about
various aspects of the business: what its goals, objectives and technical and human capabilities are, what
style of consulting should be applied and etc.

Consulting Contract
1. Verbal Agreement - Oral agreement
2. Non-verbal agreement - letter of agreement
3. Written contract - A written consulting contract duly signed by the parties involved.

CYCLE 2 : DIAGNOSIS
Conceptual framework of diagnosis
1. Purpose of diagnosis: 1. to examine the problem faced and the purposes pursued by the client in detail and
in depth, 2.identify the factors and forces that are causing and influencing the problem, 3.prepare all the
information needed to develop a solution to the problem 4. to identify and explore possible solutions.
2. Important of diagnosis: 1. to avoid the conventional urge to start by collecting data and analyzing the
situation, 2. to avoid working on or being sold a solution to a wrong problem.
3. Restating the problem and the purpose – The assignment plan prepared during the entry phase and
confirmed by the consulting contract provides guidelines and a basic schedule for diagnosis.
4. Human side of diagnosis –Data collection and analysis can involve the client’s staff in the assignment to
enhance their sense of ownership of the problem.

Diagnosing purposes and problems

1. Causes of the problem
2. Other significant relationships
3. The client’s potential to solve the problem
4. Possible directions of further action

Defining necessary facts <Plan for collecting data>

1. Content of data – types of data: qualitative or quantitative
2. Degree of detail – more detailed the facts, the more time they will take to collect.
3. Period of time – should take into consideration the availability of past records as well.
4. Coverage – must decide whether to collect total information or a selection only
Sources and ways of obtaining facts
1. Records
2. Memories
3. Observation
4. Questionnaires
5. Interviews
6. Surveys
7. Estimates

Data Analysis
1. Editing the data
2. Classification
3. Analyzing organized data
4. Analyzing the future

CYCLE 3 : ACTION PLANNING

Searching For possible Solution
1. Using experience
- previous assignments and clients
- The consulting organization’s files and documentation
- Colleagues in the consulting organization who have worked in similar situations
- Professional literature (books, periodicals, research reports)
2. Creative Thinking
5 Stages in creative thinking process : Preparation, Effort, Incubation, Insight, and Evaluation.
Techniques of creative thinking : Brainstorming, forced relationship, and checklists.

Developing and evaluating alternatives

1. Preselecting ideas to be pursued – shortlisted the interesting ideas/acceptable solutions
2. Working on alternatives – start to develop/ pursue the ideas selected
3. Evaluating alternatives – comparing the strength & weaknesses, cost & benefits

CYCLE 4 : IMPLEMENTATION
The consultants role in implementation
In some cases, the consultant does not have to be involved in implementation:
1. If the problem is relatively straightforward and no technical or other difficulties with implementation are
anticipated.
2. If joint work during the diagnostic and action-planning phases shows that the client has developed a good
understanding of the problem and a capability to implement the solutions proposed without further assistance
The following arrangements can keep the consultant involved in implementation without imposing high charges
to client:
1. The size of the consulting team present at the client’s premises will be gradually reduced during the
implementation phase
2. Only one consultant will stay during the whole implementation phase, providing advice and bringing in
additional expertise
3. The consultant will deal only with the more difficult tasks in implementation, leaving all other work to the
client
4. The consultant will visit the client periodically, or at agreed points during implementation, to check progress
and provide guidance
5. The consultant will intervene only at the client’s special request
Planning and monitoring implementation
1. Steps to take – define steps to start implementation
2. Pace and lead-time of implementation – schedule the implementation in the client’s best interest
3. Built-in flexibility and contingency – make some adjustment on work program
4. Detailing procedures – eg: new systems require instructions on how to operate them
5. Monitoring implementation – regular & frequent assessment of the progress

Training and Developing Clients Staff

1. Developing the cooperating team
2. Training for new methods and techniques
3. Staff development in complex assignments

Some tactical guidelines for introducing changes in work methods

1. The best method – directly introduced the approved method as a scheme applying to the whole group
2. Spaced practice – introduce new method in line with existing method – comparison cost and benefit
3. Rehearsal – training & practice session introducing new approach
4. Moving from the known to the unknown – showing that the old method is no longer suitable
5. Setting demanding but realistic goals – introduce changes in which goals is able to measure and describe
6. Respecting the absorptive capacity – introduce gradually – have time to explore and process it effectively
7. Providing evidence and feedback – introducing new ideas need to be supported with facts & evidence from
previous record to prove that the performance had improved after a change process.

Maintenance and control of the new practice

1. Backsliding – Paperwork, filing, operating standards, drawing
2. Control procedures – Ongoing control and maintain new system, have to frequent check everything

CYCLE 5 : TERMINATION
Withdrawal
1. Consultant’s withdrawal means that the job: (1) Has been completed; (2) Will be discontinued; or (3) Will
be pursued, but without further help from the consultant
2. Some assignments may be terminated too early, for example if (1) The consultant’s work on the project
could not be completed, (2) The client overestimated his or her capability to finish the project without having
been sufficiently trained for it,(3) The client’s budget does not permit the job to be finished, (4) The
consultant is in hurry to start another assignment
3. Some assignments may be finished later than necessary, for example if (1) the consultant embarks on a
technically difficult project, (2) the job is vaguely defined, and new problems are discovered in the course of
the assignment,(3) the consultant tries to stay longer than necessary

Evaluation
Evaluating the benefits to the client
1. New business relationship
2. New opportunities

Evaluating the consulting process

1. The design of the assignment (the contract).
2. The consulting mode used
3. The management of the assignment by the consultant and the client
CHAPTER 3 MANAGING A CONSULTING FIRM
Managing a Professional Service
1. Understanding the nature of the service
- Provide advice and needed information
- Identify the weaknesses, problems, arrears and risks
- Contribute an idea on how improve bad situation and company performance.
- Bring new life to an organization. Coming up with new ideas.
2. Managing consultant-client relationships
- Concept: Client is a direct participant in the production of the service. Client helps the consultant to define
the scope of the advice.
- A knowledge-based: consultants provide and help to apply knowledge (theoretical and applied knowledge,
experience, know-how, expertise) which clients purchase for use in running and developing their businesses.
- Establish good relationship on how to deal and to convince the client.
3. Managing knowledge
- To be able to transfer the knowledge to clients: should creates, develops and manages own knowledge in
within the consulting firm.
- Knowledge management practice: information system, database system, proper documentation and files,
report libraries, brainstorming sessions, training session conducted by senior consultant etc.
4. Managing professional workers
- A well defined path to hire a qualified and competence consultant.
- Cultivate an ethical culture, well discipline,, honesty and integrity in the profession.

The Strategic Approach

1. Purpose and goals
- Choosing a path that leads from one condition (the present) to a different one (in future) - by assessing the
consultant’s present position, resources and capabilities.
- Needs to define its purpose and objectives from a professional point of view and business activity point of
view.
2. Competitive edge in consulting
- A strategic approach helps a firm to achieve a competitive edge over other providers of consulting services.
- Help to determine competitive advantage, special technical expertise, the reason why client turn to our firm
as compare to other competitors.
- It can be in terms of special technical expertise, a product that is unavailable elsewhere, a wide range of
multidisciplinary expertise required for complex problems, an intimate knowledge of an industrial sector,
speed and reliability of service delivery, low fees, good reputation and contacts among public sector
agencies or excellent relationships with existing clients
3. Strategy and operations
- Choose a strategy which could be applied to the behavior of business organizations for long term and could
give major impact on the shape or profile of the firm in both professional and business terms.
- If a strategic choice is made, it is essential to turn it into marketing and operating decisions
4. Flexibility in the strategic approach
- Need for flexibility in defining and redefining strategy due to changes in business environment.
- Need to reflect developments in technology, markets, finance, legislation, national and international politics
and any other significant factors that affect clients’ business.
Knowledge Management in Consulting
Drivers
1. Knowledge as the main asset
2. The need for efficient and effective work
3. Commodification of consultancy products.
4. Globalization of clients
5. Improving competitive response
6. Preventing loss of intellectual assets.

Benefits
1. Knowledge is equally shared and become a lasting asset. It ensures consultants can easily find it and access it
when they need it again.
2. Skills and experience in consulting firm are what set it apart from competitors. It plays a role in attracting
new clients and retaining existing clients.
3. To achieve full potential productivity among consultants and firm as a whole – save time in searching the
information and gain more time to focus on improving client service.
4. To support consulting process. It enhances the efficiency of managing consulting assignment for client within
the time period.