Month: March 2007

I am often asked by new consultants to describe some of the tangible instruments (as separate from methodologies like Five Forces, SWOT, 3-4Cs/STP/4Ps, Growth Share Matrix, etc.) that folks should become familiar with as core to practicing management consulting. Based on my personal experience in professional services, traditional consulting, independent, and vendor consulting environments, here’s a list of must-haves for regular consultants:

1. engagement kickoff deck "heavy" (with full governance structure) and/or kickoff deck "light" (with core team structure) for starting up projects
2. full financial model (complete financial statements) and/or project-level financial analysis (mostly project NPV and revenue/cost modeling)
3. engagement methodology/workbooks and/or project summary charts
4. workshop decks
5. minutes templates
6. business plan, marketing plan, technology strategy, operations strategy, etc. templates
7. case studies
8. interim management review decks
9. final executive presentation decks (example here)
10. consulting interview guides
11. consulting-style CVs
12. contracts
13. sell, pitch, or discussion decks and proposals

Somewhat annecdotally, I have observed that many folks that get into consulting and come from strictly corporate environments (without consulting experience) find it initially unnatural to tie all of these elements together over and over again. They also seem less familiar with the concept #8 relative to other items in the list. In any case, I see the list above as consulting bread and butter.

Independent consulting life can be an enviable position to be in. After leaving the consulting industry for a period of time, I returned to consulting life as an independent (for a little over a year). The pros of independent consulting life include more flexible work schedules (relative to traditional consulting firms), challenging work, and control over both what type of work one does and which clients one works for. But there can be some downsides and pressures that what needs to constantly work when working on one’s own. Below I list some of the pressures of working on one’s own (a subset of these reasons were primary factors for me to return to work within a larger firm):

• Finding new clients while working for existing clients can be tough – There are only so many hours in a day and as an independent, you are marketing yourself. If you are working for a client, you may not have much time for new client development. It is definitely preferrable from an efficiency perspective to sell into existing clients, but logistical reasons may make these options limited (e.g., needs of client change as they move through problem solving lifecycle, and an independent cannot always position themselves as a one-stop shop). Other ways I have seen independent consultants address sales pipeline considerations are by developing a very focused niche (sometimes backed with strong intellectual property), having a extremely strong network of contacts (e.g., with past co-workers and clients in client management positions), using referrals, and lining up clients directly (including timing-wise) from a rolloff from project with the independent’s prior consulting firm. Note that I have never used this last option, but I have seen it used, and I recommend if you choose this path that you both use caution and understand the path’s limitations.
• Although you can "choose" your clients, sometimes you have to eat too – Probably the hardest thing for me as an independent consultant was cutting across vertical industries (e.g., software, manufacturing, insurance). I have spent my work life almost exclusively in the software and telecom industries (note that this is different from many consulting firms which may have consultants working across many industries early in their careers, e.g., first client dog food manufacturer, second client telecom, third client bank, fourth client valve manufacturer). In any case, sometimes as an independent consultant when an opportunity arises that is outside of your target client profile, one needs to take advantage of the situation and really think hard about how one’s background and skillset can be applied to solve the client’s problem at hand.
• Landing the first client can be tough – Often when you move to life as an independent, you may have little to no sales pipeline to start with. On top of that, you may have no past consulting references, which creates additional risk in the eyes of new client prospects. Note that getting that first client can easily take six to nine months and the contracting and qualification processes are often very different than those when getting hired as an employee.

All-in-all, I would say that independent consulting is a tough (albeit rewarding) route. As a general rule, I would probably recommend that only experienced persons and those that have attained the principal-level or higher within a traditional management consulting firm pursue the independent consulting path. The predominant reasons for my perspective here are that these professional milestones can often address or balance out (to some extent) issues related to customer references, size of professional network, and in-depth knowledge of sales processes involving complex services and emotional purchasing behavior.

McKinsey alum Paola Bonomo commented here (thanks, Paola) and points us to a wiki of McKinseyite and McKinsey alum blogs. To set some context, I noticed that she writes in an earlier post:

… many of my eBay colleagues and former colleagues are bloggers. No surprise here: we live and breathe the Web every minute of our lives …

I wonder, though, how many bloggers there are in the community of consultants and alumni from my previous employer, McKinsey. Fewer, I guess, since the Web isn’t the bread and butter of the profession; yet, there are many sharp and opinionated individuals for whom I imagine that hashing out ideas in the public domain would be enormously stimulating …

Analytical Engine has an excellent post/illustration that demonstrates what many management consultants strive to create for their clients as far as presentations and analyses go:

• Creating The Killer Picture – A picture is worth a thousand words. Summarizing a complex concept in a structured, scientific, and visual way is invaluable in consulting engagements. Successful consultants must prove wrong the saying that "consultants use their client’s watch to tell them the time". Consultants are on the right track when they can synthesize analyses into a crisp picture and get the client to react with something to the effect of "that’s really important and something I didn’t know about myself". The picture that Analytical Engine shows combines a structured breakdown of consumer and business segments, subsegments, and product offerings with information about customer churn, churn reasons, and scorecard-like indicators.
• Answering the "So What?" – Creating fancy pictures is not enough. Without a bottom line or a prescriptive message to the analysis, consultants and/or managers are just brain dumping information with no end purpose or goal. By adding scorecard and ranking information to the chart, one can imagine that the analysis presented by Analytical Engine naturally leads to something important, like "Client needs to focus on improving six red flagged areas which cost the client $X per annum in above average churn."

The combination of "creating killer pictures" and answering the "so what" questions is a gold standard in management consulting.

Related post: using bottom line messaging in consulting presentations