Tag: Management Consulting

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What A Sample Management Consulting Deliverable Looks Like

An updated version of this post with new sources and descriptions appears in The Consulting Apprenticeship (update September 2016).

It is relatively easy to find white papers, articles, magazine publications, etc. by management consulting firms. While these vehicles can be excellent sources of information, they tend shed light on either the thought leadership, research base, and/or marketing aspects of consulting firms. For those that are trying to learn about consulting firms from the perspective of what do consultants actually do and/or produce, there is relatively little information on the Internet that I have found that represents a concrete, traditional management consulting deliverable. In a large part, this tends to be because many consulting engagements involve confidential relationships between the consultancy and the client, and disclosure is not permitted.

That said, I have located a public sector deliverable (by the well-respected management consulting firm, Dean & Company) on the Internet at this site and thought I would share it (note PDF file – Download dean_report.pdf). It is an excellent example for at least a couple of reasons:

  1. It illustrates how best practice consulting should be driven by facts and a scientific method to the fullest extent possible – The presentation I show here is full of both benchmarking information and comprehensive analysis from numerous perspectives.
  2. The presentation style (which I call a “consulting style” perhaps incorrectly) reflects bottom-line titling of slides as compared to topical titling – This is a method that I did not see before entering consulting, and it is a method that I infrequently see in corporate environments (or at least much less frequently as compared to consulting environments). Notice how the title for slide 6 reads, “Expectations of selling service bundles are in line with other ‘triple play’ networks”. Even if one can’t read the blurry or busy figures in the slides, one can end up reading just the titles of the slides in the deck and get the overall executive storyline. Compare that to the situation if slide 6 was a topical titled slide that read, “Service Bundle Analysis”. Now one would have to read the slide to try to extract a bottom line message.

Now it is important to caveat this post by mentioning that this is only one type of deliverable by a consulting firm, but it is a great example. It is also worth mentioning that it is easy to look at a deliverable and completely miss the process aspect of how consulting deliverables may be generated. The process aspect may be equally, if not more important than the deliverable, and the process method varies by consulting firm. For example, the process to generate the deliverable (not necessarily the one here) may have been to facilitate input and involvement over a period of time from multiple divisions and functions within a company with oversight and/or steering by the executive team of the client. The benefits of that mix and method, while too detailed to go into here, should not be overlooked.

 

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Update On Management Consulting Blogs

Close to two years ago (in February 2005) I wrote an original post that noted a dearth of blogs by traditional management consulting firms. Six months after that post, I wrote an update where I happened to run across a few more blogs by individual consultants.

Since that time, I’ve run into many more blogs that are associated with management consulting, such as Guerrilla Consulting, David Maister‘s blog, and the Management Consultants’ Blog.

I also ran into a few more blogs that I closely associate with big name, traditional consulting firms (either because the blog carries the company banner or is written by an executive at the firm). Note that even though the blogs likely reflect the perspectives of the individuals and not the perspectives of the company, I still have some loose mental association between the individual and the firm. In any case, the other traditional consulting firm blogs I’ve run into over the past two years are:

In the past, some folks had indicated that a dearth of management consulting blogs may have been due to concerns about unwanted disclosure of confidential information. I’ve not heard of any cases to date, not to mention any disclosures that would indicate that blog media increases chances of disclosure over other media. (That said, there are clearly cases where the blogosphere amplifies the transmission of information which could be argued increases general risks associated with corporate blogs or those loosely associated with companies).

As an additional note, I find it interesting that the four traditional consulting firms that I mention above all have a strong technology competency associated with their brand. For example, Accenture not only has a strategic management consulting practice but also has a strong systems integration practice.

Update (1/4/07): Per comments below (Thanks, Amaresh!), Diamond has a blog by its information and analytics practice. From the looks of it, it is a unique blog that sheds some light on more rigorous consulting practices that top consultants strive to implement for their clients.

Update (1/9/07): Booz Allen Hamiton podcasts here.

Update (3/8/07): Accenture has started a corporate blog here.

Update (3/12/07): Although apparently not officially attached to the "Firm", McKinsey alum Paola Bonomo commented here (thanks, Paola) and points us to a wiki of McKinseyite and McKinsey alum blogs.

Update (10/13/07): Consultant Ninja has a blog over here. Thanks for the links! Sorry I was not able to comment on your blog as it does not accept users without Google logins.

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Q&A With Deloitte Consulting On The Industry And Career Guidance for MBAs

This post has been reproduced from my BusinessWeek MBA blog. Comments and trackback only taken over at the original post.

I had an excellent opportunity to phone interview management consultant, Mike McLaughlin, about the overall management consulting industry today and about employment opportunities for MBAs in the field. Mike is not only a blogger at award-winning Guerrilla Consulting but also a principal at Deloitte Consulting LLP and the former Managing Partner for Deloitte Consulting Chicago, where he had market responsibility for a practice of 800 consultants.

Steve: Mike, it’s been awhile since I worked as part of a larger, management consulting firm. Please talk a little bit about how strategy consulting has shifted over the past five years and where things are at.

Mike: Strategy consulting has been the bedrock of the industry. There are some firms, like McKinsey, BCG, Bain, etc. that are branded as strategy firms. The market has been cyclical for other firms that are not branded that way. But there has been a market uptick, e.g., for the former Big Four consulting firms. The difference in the overall industry, however, is that there has been a slight shift. It has to do with what strategy consultants do.

Strategy consultants do more on executable strategies these days – less credenza-ware.

Steve: I like that term. I know exactly what you are talking about, but I’ve never heard a term that evokes such imagery.

Mike: Lots of management consulting firms have negligible implementation capabilities. Clients are looking for the implementation tail and a roadmap of how to execute. As a result, what we are finding is that some of the best strategy teams are those that have a mix of strategy and implementation backgrounds, whether those be in operating roles in companies, IT groups, etc. The successful consultants these days are those that have a good mix of strategy and operations background.

Steve: Consulting seems to be beginning to boom again. What’s your take?

Mike: A handful of reasons come to mind. In the decline phase of prior years, companies were battening down the hatches. Management consulting fell into the discretionary fund pool. Lots of companies got swamped. Many consulting firms were not bringing good ideas to the table. Operating companies got tired of the strategy prescriptions where one or two firms dominate. Now there are a lot of new developments around managing a company, whether this be offshoring, managing a workforce, or fostering an environment of innovation. Management consulting engagements are not coming back as mega projects. Shorter projects. Smaller teams. Plus there was an awful lot of consultants back in the operating company workforce. After 2001, consultants went out into the streets. Many of these people are buying services from consulting firms, in part because they can get high-caliber people. Current growth in consulting now is probably 7%-9% these days as opposed to the 25%-30% growth rates of the wave.

Steve: How would you recommend business school students look at opportunities in consulting versus an operating company? Would the internal consulting arms of operating companies be another good place to look if people like consulting? I saw some of these crop up post some of my engagements in the profession.

Mike: One fundamental question to answer is whether people like industry or professional services. If you like services, then people should look at things like consulting and investment banking. If one is looking at industry, then one should be looking at a functional role like brand management or finance, say. I haven’t seen internal consulting arms work. Maybe one or two companies come to mind that could pull this off. There is a lot of backwater in most of the internal consulting groups in that they either have no budget or are understaffed. Not a high probability bet to go down the internal consulting path.

Steve: What dark sides do you see to consulting?

Mike: None of this is going to be new to you, I’m sure. The upside is that one can make a lot of money in consulting. You can get about tens years of normal industry experience in about two years. You can run the risk of an extensive lifestyle focus.

Steve: You mean travel?

Mike: Travel is a good catch word for something much broader. It’s about where you are living your life. You could have consulting projects in the armpit of the world. Or there could be family issues.

Another dark side is that the longer one stays with a consulting firm, the more important the number game becomes. A drive to sell, execute, make sure that partners get paid emerges. There can be ethical challenges. Not a problem with firms like Deloitte or firms like your past firm (PRTM), but there becomes a point when the interests of the client and the management consulting firm diverge. If you cross the path of not acting in the interests of the client, you’ve compromised yourself, and you are done. No one will work with you again.
 
Steve: Since this post is geared for the BusinessWeek MBA Blog community, can you give some tips for current b-school students on interviewing.

Mike: Consulting firms like Deloitte are looking for talent. We don’t care what course you took. Be yourself. Let the talents come through but not in an arrogant way. We want to see how you think on your feet. How this is done at Deloitte is through the case interview. A decision is pretty much made on the spot. There are diminishing returns for multiple interviews. The importance of using business school frameworks and practicing for the case interview are more for the purposes of freeing yourself so that your talents can show through. Not so much for the process itself.

The other aspect of interview is what I call, "passing the airplane test". This is the cultural stuff. As an interviewer, can I bear to be with this person ans sit next to him/her on an airplane? Can I put this candidate in front of a client?

Steve: How does Deloitte manage to make sure that interviewing does not fall into the trap of the Pepsi sip test, where the short interview and trial does not reflect how the person will actually work out in the long run?

Mike: The trends are way up at Deloitte in terms of only making offers to people that have done internships with the firm. If you didn’t intern with Deloitte, then we will make these candidates jump a higher bar.

Steve: Was great talking with you live for the first time as opposed to exchanging emails. I’ll let people know that if they have any questions, they should feel free to post comments to my blog, and I’ll pass on to you so that you have an opportunity to respond.

Mike: That will work great.

P.S. by Steve: If you don’t use a newsreader, consider using something like NewsGator and add Mike’s RSS feed to your reading list or subscribe using Bloglines. High value and free cost!

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Services Offered

Freelance consultant. Provide both interim management and business strategy, marketing, and operations consulting services to clients. Specialty sectors include high-tech, software, services, and communications/telecom. Sample services include:

  • Outsourced management for growth-phase companies (business development & general management)
  • New business initiatives and product introduction
  • Operational diagnostics and change management
  • US market entry for international ventures
  • Business and marketing plan development

Post updated (March 2009).

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Making The Client Cry

This is a bit of a tough post for me to write as it can easily be misinterpreted. There’s probably a slew of management consulting jokes surrounding this one too. Nevertheless, I’ll press on.

In management consulting, I’ve referred to a number of change management techniques, some of the most prevalent being the use of either a stick and driving people to change or a carrot and leading people to change.

I suppose the next technique is an offshoot of the stick variety, and the method can be intense to the point that it makes the client "cry" (not out of happiness).

It involves cornering down line workers and line management and forcing them to work with the consultant until microtasks in an important project are completed. In some client situations, one may find that workers are used to coasting along when change is needed. Attitudes of "coasting along" can come in various forms – they manifest themselves via the worker or manager "creating excuses" or "raising objections" to a course of action without providing or suggesting feasible alternatives. A "coasting along" attitude may manifest itself as a person that has a "Levi’s 501 attitude" … at 5:00pm they are lined up … by 5:01pm they have left the office (be careful not to misinterpret someone who has legitimate time schedule considerations versus someone who is not mentally committed to excellence).

A key to making sure that workers get transitional project things done may involve sitting alongside them and doing the (painful) task with them, whether that task be creating a formal product specification document where none existed before, specifying a new managerial report that they should prepare on a regular basis, completing a portion of a competitive analysis and business plan document, combing through and revising customer survey documentation, etc. Sometimes, without intervention by an outsider or by management, complacency will go on for weeks and bottleneck an important project. In some cases, the consultant try to resolve things by preventing the worker from even leaving the premises until the job is done (e.g., order in food, coffee). A key to balancing things out is frequently by ensuring that the consultant is also doing and contributing to the task at hand versus casting stones – may require management consultant with broad skills.

So the title, "Making the Client Cry" is a bit of a sick joke in some sense. But I’ve seen consultants use this micromanagement technique, and it can be effective when appropriate. Uncomfortable, but effective.

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The Tao Of Getting Information Technology (IT) Deployments To Stick

Biren recently posed a question to me about how to get technology initiatives to stick based on my experience as a management consultant, user, and technology manager.

Although I always believe that from an execution perspective one should strive for the keep it simple stupid (KISS) principle, describing the Tao (i.e., mastery required) to reach the nirvana state of "IT acceptance" in an organization requires some foundation.

An organization achieves IT acceptance when a habit or addiction with respect to both process and technology has been reached. A habit is created when an organization knows what to do, wants to do something, and knows how to do it. Commitment is frequently started off by getting the organization to collaboratively develop the requirements for the IT initiative as opposed to having an IT project handed down to them.

For IT projects, more often than not, a primary challenge is addressing the want aspect of the habit formation process. Plain an simple. If the system does not serve or incent the end user in some way, there is a high probability that the technology will not take. People have to get some benefit by using the system. Too often I have heard operating managers talk about black hole systems where they feed data in, and mysteriously, headquarters is the only one that cares and uses the data. Big warning flags going up in my book.

To address the want aspect of things you must create movement. Here I find the pecking order of the carrot, the stick, the Chinese professor, and the Jedi mind trick to be key. Two of these techniques are often referred to in change management consulting – I added the other two as off-center techniques:

  • The Carrot – This is using a positive incentive system. Show people the end goal and lead them toward victory. "If we can all get on this system, we can outflank the competition."
  • The Stick – This is using a negative incentive system. Scare them. "If we don’t do this, we’ll all likely lose our jobs."
  • The Chinese Professor – My Mandarin professor was a first generation Chinese. When I didn’t practice enough in the language laboratory, he’d look at me sternly and say, "Why have you disappointed me Xu Bing Hou". There would be long silence for effect, and the guilt would drive me to excel the next time around.
  • The Jedi mind trick – Here’s a bit of a catch-all for framing techniques that stem from organizational behavior and psychology. A bit too detailed to go into here (although I will point to a recent post of mine that draws from broader field of organizational behavior). Suffice it to say, while I do not like to correlate these methods with the notion of using tricks or being manipulative, I will say that if you better understand how yourself and other people process information, all that all one is really trying to do is to engage people the way they want to be engaged.

Carrots tend to work best in my book, but others probably have different experiences.

The final aspect beyond getting a habit and creating movement is tracking initial movement. This is a crucial subdomain of the project management discipline and not taught enough in the field. Since this post is getting long, I will say there a three elements here that are particularly relevant. These are:

  1. Having a project kickoff meeting
  2. Driving and piloting a program (and hand picking winners early on)
  3. Monitoring results regularly and more frequently early on.

Anyway, that’s my Tao.

Steve Shu

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Empathy Versus Sympathy In Management Consulting

I’ve had some interesting discussions on how corporate politics play a role when consulting to clients. Perhaps I have a parochial view here.

My take is that consultants should take no part in corporate politics.

It was a lesson that I learned early on while at the management consulting firm PRTM (a great firm to work for BTW – see Consulting Magazine PDF here).
Here’s the rationale for "no politics": consultants are often brought in to make things
better. Clients pay a premium for consultants for any number of
reasons. One common reason is that consultants are supposed to be
unbiased third-parties. If one gets consumed in politics, there’s not
enough focus on motivating everyone to get to the end goal.

Here’s another distinction (my own wrinkle) as it relates to consulting:

  • In consulting, empathy is the ability to understand what a person is going through.
  • Sympathy goes one step further. One not only understands a person but also agrees with the person on an emotional level.

Sympathy can be the "dark side of the Force". Suppose one is working
within a business unit (sponsored by one of the EVPs) and there are two
VPs below the EVP that don’t get along with one another. You are alone
in the office with one of the VPs that you may like better from a
personal chemistry point of view, and this VP starts to bad mouth the
other VP. If you join into this sort of thing, while you may be
ingratiating yourself with the one VP, you are hurting the client by
participating in politics. Bad mouthing is just not constructive. In
this sort of scenario, you should probably consider something like
letting the VP know that you can understand why he/she might feel this
way but that as a consultant, you can’t have any part in this. Other
good options would be to try to get the VPs to work it out
face-to-face. One may also want to probe a bit with the VP to see if it
is a worthwhile thing to bring things up with the EVP if the
disfunctionality is hurting the productivity of the business in a
significant way. Junior consultants should probably also consult with
their firm’s primary manager for the engagement, especially before
escalating things to the client sponsor level.

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What Is Triangulation?

I’ve wanted to write down information about the subject of “triangulation” for some time because it seems to be one of these things that is used in the investment banking and management consulting areas, but it is something that I have found used much less frequently when working with operating companies. It is also something that I have a hard time finding information about on the web or in books (for like the past 10 years!). I even had to manually confirm my definition with some investment bankers that I know because I couldn’t find any referenceable information on the net. Note according to Wikipedia triangulation is “…the process of finding a distance to a point by calculating the length of one side of a triangle, given measurements of angles and sides of the triangle formed by that point and two other reference points”, but this definition does not suit what I am thinking about.

My working definition of triangulation is “the systematic process of using multiple methods to gather a range of quantitative estimates for either an unknown or debatable value.”

Perhaps the least controversial, high-level example of triangulation exists in the investment banking area surrounding how the value of a company can be estimated. A classic example of how one could triangulate the value of a company is as follows:

  1. Estimate value of company using a multiples method of company value based on revenue (e.g., value of company equals 2.5 times revenue). Use market comparables to determine right multiplier (or low and high range of multipliers).
  2. Estimate value of company using a multiples method of company value based on profits (e.g., value of company equals 6.0 times EBITDA). Use market comparables to determine right multiplier (or low and high range of multipliers).
  3. Use discounted cash flow (DCF) method (e.g., adjusted present value [APV]) to estimate company value. This method involves taking current financials and projected financials (pro-formas) to value the company based on the free cash flows thrown off by the business.
  4. Layout the all of estimations on a “football field” type chart. Here the horizontal axis is the method used (so there are three points signifying multiples method #1, multiples method #2, and DCF method). The vertical axis is the valuation of the company. The plots would be floating bars with the high and low end of the bars signifying the high and low estimates for each valuation technique. (Sort of like how daily stock charts are plotted using a low, high, and close pricing data.).
  5. Apply any weighting technique you may have developed. Sometimes a company or practitioner may have methods of weighing one technique more than the others.
  6. Come up with your final range of estimates for the low, high, and average based on the football field.

The methods of triangulation are useful in many situations. In start-ups looking to raise capital, it can help one to be not only more rational about valuation but also more sophisticated when it comes to negotiating. Triangulation methods are not restricted to company valuations, and triangulation can be valuable in general management areas. For example, these methods can be used when trying to estimate a prospective channel partner's product demand, guesstimate job loading on a workforce, or analyze the potential penetration and growth rate of a competitor in a particular market).

In any case, although triangulation can be a bit of a mundane topic, it can be a powerful friend. Triangulation skills are something that many management consulting firms test for during the interviewing process. It takes some conscious effort to make it a habit, and it takes some creativity to come at things from different angles, but that keeps you on your toes too.

Steve Shu

Subscribe to Steve Shu's blog feed now (click icon) using a free newsreader where you can consolidate your other reading information from the Internet as well. Business and technology information for everyone!

Update 2/12/09: Here is another triangulation example (with graphic).

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