management consulting overview
DESCRIPTION
A presentation a professor of mine put together for our class. Helped me decide I wanted to be a consultant.TRANSCRIPT
MANAGEMENT CONSULTINGAN OVERVIEWMatthias Kipping
Schulich School of Business
Toronto, Canada
Overview
Definitions Assets of Consulting Firms Evolution of the Industry How Consultants Market Themselves Responsibilities and Risks
McKinsey at Enron
How it works
Clients Consulting Firm Assets
Consultants
Better performance
(benchmarks)
New knowledge
Knowledge-Expertise
-Analytical Tools-Process
Experience/Educati
on
Intense Training
Legitimacy
Enhanced reputation
Reputation(Image)
Top Schools
Improve CV
Confidence/Trust
Recommendations
Networks Alumni Network
New Contacts
4
Dominant Client Firm
Type
PeriodDominanc
e
Prominent Consultancie
s
Scientific Management
Production Unit
1900s-80s 1930s-50s
Emerson, Bedaux, Big 4,
Maynard,
Strategy & Structure
Corporation(M-form)
1930s-?? 1960s-80s
BAH, McKinsey, ATK, ADL, BCG
Information & Communication
Network Organisation
1950s-?? 1990s-??
IBM, Accenture, Capgemini,
EDS/HP
How it evolved
Why marketing?
To establish and maintain reputation
QUESTIONS: How do consultants get their foot in the
door for the first time? How do they retain their clients
subsequently?
Unique product6
Attempts to create proprietary approaches Bedaux / MTM systems (shop floor efficiency) Multidivisional form (corporate organization) Business Process Re-engineering (value chain) Data bases (e.g. benchmarking; remuneration)
Efforts to make them widely known Publications (e.g. In Search of Excellence) Teaching at Business Schools Presentations to managers (at conferences)
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Difficult to sustain
Success eliminates the market for product McKinsey decentralised many European
companies Competitors imitate: Commodification
Consultancies “invent” own version of BPR New “fads” appear with increasing speed
From JIT to TQM to BPR to CRM Consultants: Creators and Victims of
“Management Fashions”
8
Sales efforts and incentives
Contact potential clients directly, repeatedly Through mail shots, phone calls, etc.
Separate sales efforts from consulting Different people sell and carry out projects
Provide consultants with sales incentives Relate part of the pay to successful selling Make promotion dependent on new sales
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Works only in the short-term Very fast initial expansion
Example George S. May BUT: Many clients complain very soon
About unrealistic promises of sales staff Consulting firm looses market share
Some even collapse completely Often creates bad reputation
For consulting firm and industry as a whole
10
Advertising for image building Used since beginning of century
Usually quite boring style Not allowed by professional rules
But often hidden as job advert Has become more widespread
Pioneering role of Andersen Consulting Taken on by other large consultancies
Use of television and stars
Early examples: Reach for the moon, shark
Change of name on 1 January 2001 Recent campaigns
Ideas Be a Tiger: Remake, Revision, Invention
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Relationship marketing
Building trust-based personal relations between consulting partner and client CEO
Often based on similar background Culture, education (“old schools ties”), etc.
BUT: There are also some problems Spin-offs: Partners leave with clients International expansion: need for “bridges”
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Why long-term relationship?
Provides the consultancy with a stable income stream and…
reduces the costly efforts to identify and sign up new clients
Clients have a better idea about the quality of the consulting service and…
only need to disclose confidential information to one consulting firm
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How McKinsey does it
Famous “up or out” policy Only 1 out of 10 recruits makes partner
Former consultants in top positions CEOs of potential client companies (e.g.
IBM) McKinsey maintains this network
Through newsletter, social events, etc.