MANAGEMENT CONSULTING
A G U I D E T O T H E P R O F E S S I O N
Fourth edition
Edited by MILAN KUBR
INTERNATIONAL LABOUR OFFICE GENEVA
Manage Consult PRELIMS 7/11/02 10:58 AM Page ii
In praise of the fourth edition
“ the first edition of Management consulting appeared, hardly any books had been published on the subject. Almost immediately, Management consulting became the standard text in the field… In today’s plethora of books on the subject, the fourth edition still stands out, just like the first. As a guide for the novice consultant and reference for the experienced, this book´s grasp of the subject matter, breadth of coverage, simplicity of treatment, and accessibility is unsurpassed. Its perspective on the world of consulting is fresh and down-to-earth.”
Gerald A. Simon, CMC, FIMC, Chairman of the Editorial Board,
C2M Consulting to Management
“The consulting industry is going through profound changes. Practitioners and clients both need to be aware of these changes in order to ensure that client value continues to be delivered. Milan Kubr's book Management consulting: A guide to the profession is a great starting point to understanding the state of the industry and how it's evolving.”
Wayne Cooper, Publisher of Management Consulting International and
Consultants News, and CEO of Kennedy Information
“Management consulting: A guide to the profession" is the most comprehensive capture of the body of knowledge of management consulting. The text is the most thorough guide for those who want to develop the competence leading to certification in this profession.”
E. Michael Shays, CMC, FIMC, Executive Director,
International Council of Management Consulting Institutes, and Chairman,
Institute of Management Consultants, United States
“How fortunate for both the novice and the battle-scarred veteran to now have a new fourth edition of this classic text, which has been an indispensable tool for me over many years.
Balancing the professional and the business aspects of management consulting, Milan Kubr and his team of authors have integrated the spectrum of current theories and practices into a pragmatic guide which will become the handbook of our time.”
Patrick J. McKenna, management consultant and co-author of First among equals: How to manage a group of professionals
“The Asian Productivity Organization has greatly benefited from the previous editions of Management consulting in developing consultants in Asia. The current edition will contribute to further building up the core competence in consulting services with a pragmatic approach to creating the knowledge economy and enhancing business competitiveness.”
Yuji Yamada, Special Adviser to the Secretary-General, Asian Productivity Organization
MANAGEMENT CONSULTING
A G U I D E T O T H E P R O F E S S I O N
Fourth edition
Edited by MILAN KUBR
INTERNATIONAL LABOUR OFFICE GENEVA
Copyright © International Labour Organization 2002
First published 1976
Fourth edition 2002
Publications of the International Labour Office enjoy copyright under Protocol 2 of the Universal Copyright Convention. Nevertheless, short excerpts from them may be reproduced without authorization, on condition that the source is indicated. For rights of reproduction or translation, application should be made to the Publications Bureau (Rights and Permissions), International Labour Office, CH-1211 Geneva 22, Switzerland. The International Labour Office welcomes such applications.
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Kubr, M. (ed.)
Management consulting: A guide to the profession (fourth edition)
Geneva, International Labour Office, 2002
Guide, management consultancy, management consultant. 12.04.1
ISBN 92-2-109519-3
ILO Cataloguing-in-Publication Data
The designations employed in ILO publications, which are in conformity with United Nations practice, and the presentation of material therein do not imply the expression of any opinion whatsoever on the part of the International Labour Office concerning the legal status of any country, area or territory or of its authorities, or concerning the delimitation of its frontiers.
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Printed in Switzerland
Typeset by Magheross Graphics, Switzerland & Ireland
CONTENTS
Authors and acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
xiii |
|
Foreword . . |
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
xv |
Abbreviations and acronyms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
xxi |
|
Part I |
MANAGEMENT CONSULTING IN PERSPECTIVE |
|
Chapter 1 |
Nature and purpose of management consulting . . . . . . . . . . . . . . |
. 3 |
1.1 |
What is consulting? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
. 3 |
1.2 |
Why are consultants used? Five generic purposes . . . . . . . . . . . . . . |
10 |
1.3 |
How are consultants used? Ten principal ways . . . . . . . . . . . . . . . . . |
16 |
1.4 |
The consulting process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
21 |
1.5 |
Evolving concepts and scope of management consulting . . . . . . . . . |
26 |
Chapter 2 |
The consulting industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
31 |
2.1 |
A historical perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
31 |
2.2 |
The current consulting scene . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
35 |
2.3 |
Range of services provided . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
39 |
2.4 |
Generalist and specialist services . . . . . . . . . . . . . . . . . . . . . . . . . . . |
43 |
2.5 |
Main types of consulting organization . . . . . . . . . . . . . . . . . . . . . . . |
45 |
2.6 |
Internal consultants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
50 |
2.7 |
Management consulting and other professions . . . . . . . . . . . . . . . . . |
53 |
2.8 |
Management consulting, training and research . . . . . . . . . . . . . . . . . |
56 |
Chapter 3 |
The consultant–client relationship . . . . . . . . . . . . . . . . . . . . . . . . . |
61 |
3.1 |
Defining expectations and roles . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
61 |
3.2 |
The client and the consultant systems . . . . . . . . . . . . . . . . . . . . . . . . |
64 |
3.3 |
Critical dimensions of the consultant–client relationship . . . . . . . . . |
66 |
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Management consulting |
|
|
3.4 |
Behavioural roles of the consultant . . . . . . . . . . . . . . . . . . . . . . . . . |
. 70 |
3.5 |
Further refinement of the role concept . . . . . . . . . . . . . . . . . . . . . . . |
73 |
3.6 |
Methods of influencing the client system . . . . . . . . . . . . . . . . . . . . . |
76 |
3.7 |
Counselling and coaching as tools of consulting . . . . . . . . . . . . . . . |
80 |
Chapter 4 |
Consulting and change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
85 |
4.1 |
Understanding the nature of change . . . . . . . . . . . . . . . . . . . . . . . . . |
85 |
4.2 |
How organizations approach change . . . . . . . . . . . . . . . . . . . . . . . . . |
91 |
4.3 |
Gaining support for change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
98 |
4.4 |
Managing conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
101 |
4.5 |
Structural arrangements and interventions for assisting change . . . |
103 |
Chapter 5 |
Consulting and culture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
113 |
5.1 |
Understanding and respecting culture . . . . . . . . . . . . . . . . . . . . . . . |
113 |
5.2 |
Levels of culture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
115 |
5.3 |
Facing culture in consulting assignments . . . . . . . . . . . . . . . . . . . . |
121 |
Chapter 6 |
Professionalism and ethics in consulting . . . . . . . . . . . . . . . . . . . |
129 |
6.1 |
Is management consulting a profession? . . . . . . . . . . . . . . . . . . . . . |
129 |
6.2 |
The professional approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
131 |
6.3 |
Professional associations and codes of conduct . . . . . . . . . . . . . . . |
140 |
6.4 |
Certification and licensing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
143 |
6.5 |
Legal liability and professional responsibility . . . . . . . . . . . . . . . . |
145 |
Part II |
THE CONSULTING PROCESS |
|
Chapter 7 |
Entry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
153 |
7.1 |
Initial contacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
154 |
7.2 |
Preliminary problem diagnosis . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
159 |
7.3 |
Terms of reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
166 |
7.4 |
Assignment strategy and plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
167 |
7.5 |
Proposal to the client . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
171 |
7.6 |
The consulting contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
174 |
Chapter 8 |
Diagnosis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
179 |
8.1 |
Conceptual framework of diagnosis . . . . . . . . . . . . . . . . . . . . . . . . |
179 |
8.2 |
Diagnosing purposes and problems . . . . . . . . . . . . . . . . . . . . . . . . . |
182 |
8.3 |
Defining necessary facts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
187 |
8.4 |
Sources and ways of obtaining facts . . . . . . . . . . . . . . . . . . . . . . . . |
190 |
8.5 |
Data analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
198 |
8.6 |
Feedback to the client . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
208 |
vi
|
|
Contents |
Chapter 9 |
Action planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
. . . . 213 |
9.1 |
Searching for possible solutions . . . . . . . . . . . . . . . . . . . . . . . |
. . . . 214 |
9.2 |
Developing and evaluating alternatives . . . . . . . . . . . . . . . . . . . |
. . . 221 |
9.3 |
Presenting action proposals to the client . . . . . . . . . . . . . . . . . . |
. . . 225 |
Chapter 10 Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229 10.1 The consultant’s role in implementation . . . . . . . . . . . . . . . . . . . . . 230 10.2 Planning and monitoring implementation . . . . . . . . . . . . . . . . . . . . 232 10.3 Training and developing client staff . . . . . . . . . . . . . . . . . . . . . . . . 234
10.4Some tactical guidelines for introducing changes in work methods . 236
10.5 Maintenance and control of the new practice . . . . . . . . . . . . . . . . . 242
Chapter 11 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 245 11.1 Time for withdrawal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246 11.2 Evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248 11.3 Follow-up . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 254 11.4 Final reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255
Part III CONSULTING IN VARIOUS AREAS OF MANAGEMENT
Chapter 12 Consulting in general and strategic management . . . . . . . . . . . |
261 |
12.1Nature and scope of consulting in corporate strategy and
general management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261 12.2 Corporate strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265 12.3 Processes, systems and structures . . . . . . . . . . . . . . . . . . . . . . . . . . 272 12.4 Corporate culture and management style . . . . . . . . . . . . . . . . . . . . 276 12.5 Corporate governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 278
Chapter 13 Consulting in information technology . . . . . . . . . . . . . . . . . . . . . |
283 |
|
13.1 |
The developing role of information technology . . . . . . . . . . . . . . . |
283 |
13.2 |
Scope and special features of IT consulting . . . . . . . . . . . . . . . . . . |
285 |
13.3 |
An overall model of information systems consulting . . . . . . . . . . . |
287 |
13.4 |
Quality of information systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
291 |
13.5 |
The providers of IT consulting services . . . . . . . . . . . . . . . . . . . . . |
292 |
13.6 |
Managing an IT consulting project . . . . . . . . . . . . . . . . . . . . . . . . . |
295 |
13.7 |
IT consulting to small businesses . . . . . . . . . . . . . . . . . . . . . . . . . . |
296 |
13.8 |
Future perspectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
297 |
Chapter 14 Consulting in financial management . . . . . . . . . . . . . . . . . . . . . . |
299 |
|
14.1 |
Creating value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
301 |
14.2 |
The basic tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
303 |
vii
Management consulting
14.3 Working capital and liquidity management . . . . . . . . . . . . . . . . . . . 305 14.4 Capital structure and the financial markets . . . . . . . . . . . . . . . . . . . 306 14.5 Mergers and acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 309 14.6 Finance and operations: capital investment analysis . . . . . . . . . . . . 312 14.7 Accounting systems and budgetary control . . . . . . . . . . . . . . . . . . . 315 14.8 Financial management under inflation . . . . . . . . . . . . . . . . . . . . . . 317 14.9 Cross-border operations and the use of external financial markets . . 319
Chapter 15 Consulting in marketing and distribution management . . . . . . |
327 |
|
15.1 |
The marketing strategy level . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
328 |
15.2 |
Marketing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
333 |
15.3 |
Consulting in commercial enterprises . . . . . . . . . . . . . . . . . . . . . . . |
337 |
15.4 |
International marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
338 |
15.5 |
Physical distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
339 |
15.6 |
Public relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
339 |
Chapter 16 Consulting in e-business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
341 |
|
16.1 |
The scope of e-business consulting . . . . . . . . . . . . . . . . . . . . . . . . . |
341 |
16.2Bricks-and-mortar and bricks-and-clicks: value-chain connectivity . 345
16.3 |
Bricks-and-mortar and bricks-and-clicks: internal processes . . . . . |
352 |
16.4 |
Dot.com organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
358 |
16.5 |
Internet research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
360 |
Chapter 17 Consulting in operations management . . . . . . . . . . . . . . . . . . . . |
361 |
|
17.1 |
Developing an operations strategy . . . . . . . . . . . . . . . . . . . . . . . . . |
361 |
17.2 |
The product perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
366 |
17.3 |
The process perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
370 |
17.4 |
The human aspects of operations . . . . . . . . . . . . . . . . . . . . . . . . . . |
378 |
Chapter 18 Consulting in human resource management . . . . . . . . . . . . . . . . |
381 |
|
18.1 |
The changing nature of the personnel function . . . . . . . . . . . . . . . . |
381 |
18.2 |
Policies, practices and the human resource audit . . . . . . . . . . . . . . |
383 |
18.3 |
Human resource planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
386 |
18.4 |
Recruitment and selection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
387 |
18.5 |
Motivation and remuneration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
389 |
18.6 |
Human resource development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
393 |
18.7 |
Labour–management relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
399 |
18.8 |
New areas and issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
407 |
Chapter 19 Consulting in knowledge management . . . . . . . . . . . . . . . . . . . . |
415 |
|
19.1 |
Managing in the knowledge economy . . . . . . . . . . . . . . . . . . . . . . . |
415 |
19.2 |
Knowledge-based value creation . . . . . . . . . . . . . . . . . . . . . . . . . . . |
417 |
19.3 |
Developing a knowledge organization . . . . . . . . . . . . . . . . . . . . . . |
425 |
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Contents
Chapter 20 Consulting on productivity and performance improvement . . . 437 20.1 Shifts in productivity concepts, factors and conditions . . . . . . . . . . 438 20.2 Productivity and performance measurement . . . . . . . . . . . . . . . . . . 443 20.3 Approaches and strategies to improve productivity . . . . . . . . . . . . 445
20.4Designing and implementing productivity and performance
|
improvement programmes . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
. . . 454 |
20.5 |
Tools and techniques for productivity improvement . . . . . . . . |
. . . 458 |
Chapter 21 Consulting in total quality management . . . . . . . . . . . . . . . . |
. . . 463 |
|
21.1 |
Understanding TQM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
. . . 463 |
21.2 |
Cost of quality – quality is free . . . . . . . . . . . . . . . . . . . . . . . . . |
. . . 467 |
21.3 |
Principles and building-blocks of TQM . . . . . . . . . . . . . . . . . . . |
. . 470 |
21.4 |
Implementing TQM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
. . 474 |
21.5 |
Principal TQM tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
. . 478 |
21.6 |
ISO 9000 as a vehicle to TQM . . . . . . . . . . . . . . . . . . . . . . . . . . |
. . 483 |
21.7 |
Pitfalls and problems of TQM . . . . . . . . . . . . . . . . . . . . . . . . . . . |
. . 487 |
21.8 |
Impact on management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
. . 488 |
21.9 |
Consulting competencies for TQM . . . . . . . . . . . . . . . . . . . . . . . |
. . 489 |
Chapter 22 Consulting in company transformation . . . . . . . . . . . . . . . . . . |
. . 491 |
|
22.1 |
What is organizational transformation? . . . . . . . . . . . . . . . . . . . . |
. . 492 |
22.2 |
Preparing for transformation . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
. . 493 |
22.3 |
Strategies and processes of transformation . . . . . . . . . . . . . . . . . |
. . 495 |
22.4 |
Company turnarounds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
. . 503 |
22.5 |
Downsizing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
. . 506 |
22.6 |
Business process re-engineering . . . . . . . . . . . . . . . . . . . . . . . . . |
. . 507 |
22.7 |
Outsourcing and insourcing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
. . 509 |
22.8 |
Joint ventures for transformation . . . . . . . . . . . . . . . . . . . . . . . . . |
. . 511 |
22.9 |
Mergers and acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
. . 512 |
22.10 |
Networking arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
. . 514 |
22.11 |
Transforming organizational structures . . . . . . . . . . . . . . . . . . . . |
. . 515 |
22.12 |
Ownership restructuring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
. . 517 |
22.13 |
Privatization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
. . 517 |
22.14 |
Pitfalls and errors to avoid in transformation . . . . . . . . . . . . . . . |
. . 519 |
Chapter 23 Consulting on the social role and responsibility of business |
. . . 523 |
|
23.1 |
The social dimension of business . . . . . . . . . . . . . . . . . . . . . . . . |
. . 523 |
23.2 |
Current concepts and trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
. . 525 |
23.3 |
Consulting services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
. . 534 |
23.4 |
A strategic approach to corporate responsibility . . . . . . . . . . . . . |
. . 537 |
ix
Management consulting |
|
|
23.5 |
Consulting in specific functions and areas of business . . . . . . . . . . |
544 |
23.6 |
Future perspectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
545 |
Chapter 24 Consulting in small-business management and development . . |
547 |
|
24.1 |
Characteristics of small enterprises . . . . . . . . . . . . . . . . . . . . . . . . . |
548 |
24.2 |
The role and profile of the consultant . . . . . . . . . . . . . . . . . . . . . . . |
551 |
24.3 |
Consulting assignments in the life-cycle of an enterprise . . . . . . . . |
553 |
24.4 |
Areas of special concern . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
559 |
24.5 |
An enabling environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
562 |
24.6 |
Innovations in small-business consulting . . . . . . . . . . . . . . . . . . . . |
567 |
Chapter 25 Consulting for the informal sector . . . . . . . . . . . . . . . . . . . . . . . . |
575 |
|
25.1 |
What is different about micro-enterprises? . . . . . . . . . . . . . . . . . . . |
575 |
25.2 |
Management problems of informal-sector entrepreneurs . . . . . . . . |
579 |
25.3 |
The special skills of micro-enterprise consultants . . . . . . . . . . . . . . |
580 |
25.4 |
Outreach to micro-enterprises in the informal sector . . . . . . . . . . . |
582 |
Chapter 26 Consulting for the public sector . . . . . . . . . . . . . . . . . . . . . . . . . . |
587 |
|
26.1 |
The evolving role of government . . . . . . . . . . . . . . . . . . . . . . . . . . |
587 |
26.2 |
Understanding the public sector environment . . . . . . . . . . . . . . . . . |
589 |
26.3Working with public sector clients throughout the
|
consulting cycle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
594 |
26.4 |
The service providers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
597 |
26.5 |
Some current challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
599 |
Part IV |
MANAGING A CONSULTING FIRM |
|
Chapter 27 |
Fundamentals of management in the consulting profession . . . |
607 |
27.1 |
The management challenge of the professions . . . . . . . . . . . . . . . . |
607 |
27.2 |
Managing a professional service . . . . . . . . . . . . . . . . . . . . . . . . . . . |
609 |
27.3 |
Managing a professional business . . . . . . . . . . . . . . . . . . . . . . . . . . |
615 |
27.4 |
Achieving excellence professionally and in business . . . . . . . . . . . |
620 |
Chapter 28 The consulting firm’s strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . |
623 |
|
28.1 |
The strategic approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
623 |
28.2 |
The scope of client services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
627 |
28.3 |
The client base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
630 |
28.4 |
Growth and expansion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
632 |
28.5 |
Going international . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
635 |
28.6 |
Profile and image of the firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
636 |
28.7 |
Strategic management in practice . . . . . . . . . . . . . . . . . . . . . . . . . . |
638 |
x
|
|
Contents |
Chapter 29 Marketing of consulting services . . . . . . . . . . . . . . . . . . . . . |
. . . . 647 |
|
29.1 |
The marketing approach in consulting . . . . . . . . . . . . . . . . . . |
. . . . 648 |
29.2 |
A client’s perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
. . . 651 |
29.3 |
Techniques for marketing the consulting firm . . . . . . . . . . . . . . |
. . . 652 |
29.4 |
Techniques for marketing consulting assignments . . . . . . . . . . |
. . . 667 |
29.5 |
Marketing to existing clients . . . . . . . . . . . . . . . . . . . . . . . . . . . |
. . . 670 |
29.6 |
Managing the marketing process . . . . . . . . . . . . . . . . . . . . . . . . |
. . . 673 |
Chapter 30 Costs and fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
. . . 681 |
|
30.1 |
Income-generating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . |
. . . 681 |
30.2 |
Costing chargeable services . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
. . . 684 |
30.3 |
Marketing-policy considerations . . . . . . . . . . . . . . . . . . . . . . . . |
. . . 685 |
30.4 |
Principal fee-setting methods . . . . . . . . . . . . . . . . . . . . . . . . . . |
. . . 687 |
30.5 |
Fair play in fee-setting and billing . . . . . . . . . . . . . . . . . . . . . . . |
. . . 692 |
30.6. |
Towards value billing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
. . . 694 |
30.7 |
Costing and pricing an assignment . . . . . . . . . . . . . . . . . . . . . . |
. . . 695 |
30.8 |
Billing clients and collecting fees . . . . . . . . . . . . . . . . . . . . . . . |
. . . 699 |
Chapter 31 |
Assignment management . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
. . . 703 |
31.1 |
Structuring and scheduling an assignment . . . . . . . . . . . . . . . . |
. . . 703 |
31.2 |
Preparing for an assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . |
. . . 708 |
31.3 |
Managing assignment execution . . . . . . . . . . . . . . . . . . . . . . . . |
. . . 711 |
31.4 |
Controlling costs and budgets . . . . . . . . . . . . . . . . . . . . . . . . . . |
. . . 717 |
31.5 |
Assignment records and reports . . . . . . . . . . . . . . . . . . . . . . . . |
. . . 717 |
31.6 |
Closing an assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
. . . 722 |
Chapter 32 Quality management in consulting . . . . . . . . . . . . . . . . . . . . |
. . . 723 |
|
32.1 |
What is quality management in consulting? . . . . . . . . . . . . . . . |
. . . 723 |
32.2 |
Key elements of a quality assurance programme . . . . . . . . . . . |
. . . 727 |
32.3 |
Quality certification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
. . . 733 |
32.4 |
Sustaining quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
. . . 735 |
Chapter 33 Operational and financial control . . . . . . . . . . . . . . . . . . . . . |
. . . 737 |
|
33.1 |
Operating workplan and budget . . . . . . . . . . . . . . . . . . . . . . . . |
. . . 737 |
33.2 |
Performance monitoring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
. . . 741 |
33.3 |
Bookkeeping and accounting . . . . . . . . . . . . . . . . . . . . . . . . . . |
. . . 747 |
Chapter 34 Knowledge management in consulting firms . . . . . . . . . . . . |
. . . 751 |
|
34.1 |
Drivers for knowledge management in consulting . . . . . . . . . . |
. . . 751 |
34.2 |
Factors inherent in the consulting process . . . . . . . . . . . . . . . . . |
. . . 753 |
34.3 |
A knowledge management programme . . . . . . . . . . . . . . . . . . . |
. . . 754 |
34.4 |
Sharing knowledge with clients . . . . . . . . . . . . . . . . . . . . . . . . . |
. . . 759 |
xi
Management consulting |
|
|
Chapter 35 |
Structuring a consulting firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
763 |
35.1 |
Legal forms of business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
763 |
35.2 |
Management and operations structure . . . . . . . . . . . . . . . . . . . . . . . |
768 |
35.3 |
IT support and outsourcing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
775 |
35.4 |
Office facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
777 |
Part V |
DEVELOPING CONSULTANTS AND THE |
|
|
CONSULTING PROFESSION |
|
Chapter 36 |
Careers and compensation in consulting . . . . . . . . . . . . . . . . . . . |
781 |
36.1 |
Personal characteristics of consultants . . . . . . . . . . . . . . . . . . . . . . |
781 |
36.2 |
Recruitment and selection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
784 |
36.3 |
Career development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
788 |
36.4 |
Compensation policies and practices . . . . . . . . . . . . . . . . . . . . . . . . |
792 |
Chapter 37 |
Training and development of consultants . . . . . . . . . . . . . . . . . . |
799 |
37.1 |
What should consultants learn? . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
800 |
37.2 |
Training of new consultants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
805 |
37.3 |
Training methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
812 |
37.4 |
Further training and development of consultants . . . . . . . . . . . . . . |
815 |
37.5 |
Motivation for consultant development . . . . . . . . . . . . . . . . . . . . . . |
818 |
37.6 |
Learning options avalable to sole practitioners . . . . . . . . . . . . . . . . |
820 |
Chapter 38 |
Preparing for the future . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
823 |
38.1 |
Your market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
824 |
38.2 |
Your profession . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
830 |
38.3 |
Your self-development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
832 |
38.4 |
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
833 |
APPENDICES |
|
|
Appendix 1 |
The client’s ten commandments |
|
(Choosing and using consultants) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
837 |
|
Appendix 2 |
Associations of management consultants . . . . . . . . . . . . . . . . . . . . |
845 |
Appendix 3 |
Information and learning sources for consultants . . . . . . . . . . . . . . |
851 |
Appendix 4 |
Terms of a consulting contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
857 |
Appendix 5 |
Consulting and intellectual property . . . . . . . . . . . . . . . . . . . . . . . . |
863 |
Appendix 6 |
Using case studies of management consulting . . . . . . . . . . . . . . . . |
875 |
Appendix 7 |
Writing reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
889 |
Subject index |
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
895 |
xii
AUTHORS AND
ACKNOWLEDGEMENTS
This book is the result of a collective effort and reflects the experience and knowledge of the international consulting profession.
The first three editions (published in 1976, 1986 and 1996) were written by the following co-authors: Michael Bauer, Roland Berger, George Boulden, Chris Brewster, Chris Cooper, George Cox, James Dey, Alan Gladstone, Colin Guthrie, Malcolm Harper, John Heptonstall, Hari Johri, George Kanawaty, James H. Kennedy, Milan Kubr, Frederic Latham, Gordon Lippitt, David H. Maister, Rebecca Morgan, Leonard Nadler, Philip Neck, Klaus North, Joseph Prokopenko, J. Geoffrey Rawlinson, Edgar H. Schein, Edward A. Stone, John Syme, Denis Tindley and John Wallace.
Short contributions (most presented in box form) and other valuable materials and ideas used in the book were provided by Moïse Allal, William J. Altier, Maurice C. Ashill, Daniel Bas, Bengt Bjorklund, Kenneth L. Block, Ole Bovin, Derek Bowland, Joseph J. Brady, Ken Dawson, Gerry Y. Elliot, W. J. C. McEwan, Praxy Fernandes, Stelan Friberg, Takeyuki Furuhashi, S. R. Ganesh, John E. Hartshorne, Ed Hendricks, Michael Henriques, Shozo Hibino, Pierre Hidalgo, Geert Hofstede, Kate Hook, Jean-Marie van Houwe, Osamu Ida, James H. Kennedy, Václav Klaus, Emile Laboureau, Lauri K. Leppanen, Hans Ake Lilja, William J. McGinnis, Eiji Mizutani, Klaus Molenaar, Lewis S. Moore, Alex Morley-Smith, Gerald Nadler, M. S. S. El Namaki, Robert Nelson, Brian O’Rorke, Graham Perkins, Jean-François Poncet, Alan C. Popham, John Roethle, Steven E. Sacks, Emmanuel S. Savas, Karl Scholz, P. W. Shay, E. Michael Shays, Howard L. Shenson, Marko Simoneti, Carl S. Sloane, Sten Söderman, Fritz Steele, Hedley Thomas, Arthur B. Toan, Arthur N. Turner and W. Trevor Utting.
The author team for the fourth edition, which revised the existing text and wrote new chapters, included Chris Brewster, Martin Clemensson, Gerry Finnegan, Alan Gladstone, Jack Hardie, John Heptonstall, Milan Kubr, Radan Kubr, Mike Malmgren, Klaus North, Joseph Prokopenko, Steven Rochlin, Birte Schmitz, Edward A. Stone, and Jim Tanburn.
Short contributions, advice and assistance were received from Michael Beer, Charles Bodwell, Christine Evans-Klock, Robert M. Galford, Gil Gidron,
xiii
Management consulting
Charles H. Green, Else Groen, Claude Hoffmann, Osamu Ida, Kennedy Information Inc., Margot Lobbezoo, David H. Maister, Bruce W. Marcus, Patrick J. McKenna, Eiji Mizutani, Edgar H. Schein, Karl Scholz, E. Michael Shays, Gerald A. Simon, Peter Søresen, Arturo Tolentino and Simon White.
Milan Kubr served as team leader and technical editor for all editions of the book. He is also the principal author. Stylistic and language editing was carried out by Pat Butler, and the project was overseen by Rosemary Beattie.
There are many colleagues in consulting firms and their associations, management institutes and business companies, and in the ILO, whose experience, support and constructive suggestions made the publication of this book possible. The ILO extends its sincere thanks to all co-authors and contributors, including those who could not be mentioned by name.
xiv