The management consultant: mastering the art of consultancy

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

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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

All rights reserved. No part of this publication may be reproduced, stored

in a retrieval system, or transmitted in any form or by any means, electronic,

mechanical, photocopying, recording or otherwise, without either the prior

written permission of the publisher or a licence permitting restricted copying

in the United Kingdom issued by the Copyright Licensing Agency Ltd,

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be lent, resold, hired out or otherwise disposed of by way of trade in any form

of binding or cover other than that in which it is published, without the prior

consent of the Publishers.

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Typeset in 9/13pt Stone Serif by 30

Printed and bound in Great Britain by Ashford Colour Press Ltd, Gosport

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.