What is Management Consulting?
Definitions of Management Consulting on the Web:
In short:
- A service industry that provides advice to those in charge of running a business.
Source: wordnet.princeton.edu/perl/webwn 07-01-08
Or the longer version:
- Management consulting (sometimes also called strategy consulting) refers to both the practice of helping companies to improve performance through analysis of existing business problems and development of future plans, as well as to the industry composed of firms that specialise in this sort of business support.
Organisations hire the services of management consultants for a number of reasons, including, for example, to gain external and presumably more objective advice and recommendations, to gain access the consultants' specialised expertise or simply as temporary help during a one-time project, where the hiring of permanent employees is not required. Because of their exposure to and relationships with numerous organisations, consultancies are also said to be aware of industry 'best practices.'
Consultancies may also provide organisational change management assistance, development of coaching skills, technology implementation, strategy development, or operational improvement services. Management consultants generally bring their own, proprietary methodologies or frameworks to guide the identification of problems, and to serve as the basis for recommendations for more effective or efficient ways of performing business tasks.
Source: en.wikipedia.org/wiki/Management consulting 07-01-08
Why consider commissioning a consultancy?
The question springs to mind - why draw on an outside consultancy's skills? The answer lies in reviewing business trends over the last two decades.
Since the minor recession of the early 90's and the rapid development of technologies, there have been dramatic changes in most industries. For some, business has mushroomed and demand has outstripped supply. In others, there have been significant competitive pressures and it has become a buyers market. And for the balance, business has slowed and growth has declined to unsustainable levels.
In all markets and industries there is an imperative to reduce costs through various efficiencies and initiatives and increase top line through market leadership. Many firms have found that their rapid growth has left them with inadequate organisations; things don't work as smoothly as they should and something must be done. Others have simply found themselves unable to meet the demands of their industry and/or client base with their own resources and need to commission outside help.
What can be explicitly outlined are the particular advantages of using external, arm's length assistance. All too frequently in the normal day-to-day running of business major issues are allowed to for lengthy periods. This is partly due to the difficulty in remaining objective in problem definition and problem solving - the thought processes of people centre around their own particular sphere of interest and skill set. An outside consultant can offer a completely detached and unbiased viewpoint - unclouded by past experiences of past difficulties or local cultural and environments factors.
What makes a successful LEC consultant?
As a general rule, our consultants are highly trained professionals with considerable industry experience. Typically consultants come from a variety of industries and usually come from executive positions where they have acquired the on-the-job experience which is so fundamental to success in advising other business people on management issues.
What do LEC consultants do for their clients?
Our consultants are available to assist clients in a range of fields including:
- Process Engineering
- Change Management
- Organisation Strategy
- Human Capital
- Sales
- Training
They will undertake specific tasks/assignments such as organisation studies, methods improvements, control systems, planning and implementation and, where appropriate, issues of a problem solving nature.
How do LEC consultants work with their clients?
The process begins with preliminary discussions to get an understanding of the brief and this is generally followed by a preliminary study that we call a; ‘Strategic Health check'. This may vary in length from two to three days to a week or two and is aimed at assessing the nature and extent of the support required, the likely benefits and investment required to achieve these improvements. All of this information is cast into a detailed report which is delivered via an interactive, one-day workshop to the organisation's executive or senior team.
Once the assignment is awarded the most appropriate consultants based on skill set are appointed to the task. Then a programme is drawn up detailing start and projected completion dates and a project manager is assigned both from the client organisation and LEC. Assignments vary in length depending upon complexity; they can run from 5 or 6 months to 3 or more years.
In the course of the programme, our consultants rely entirely on the co-operation of management and staff and without this open and honest support, little progress can be expected. Best results only occur with full contribution to the improvements from the organisation's own personnel.
What results can be expected or achieved?
It is vitally important to consider the difficulties associated with estimating actual improvements and deciding how much is attributable to your consultant/s and how much to your company's staff. It is widely agreed that one of the outstanding benefits of using external, third party specialists is to activate or motivate all company personnel into doing their own job better, more efficiently or economically and this of itself effects improvements.
Many consultations are of such a nature that direct financial benefits are not readily quantifiable. For example; personnel selection, training programmes and planning and control systems are qualitative and are typically not of an instantly quantifiable result. While it is difficult to attribute to these activities a specific value in dollar terms, few, if any, would doubt their usefulness in improving business operations.
When and how to use LEC.
There are two main divisions of challenges suitable for external support and these are:
- New ventures and acquisitions
This includes but is not limited to:
Organisational structures
Organisational change
Team recruitment and induction
Team development and training
Feasibility and economic surveys
Strategy and planning
New or unfamiliar problems - Performance factors and improvements
Actual operational results provide the trigger for intervention, e.g.,
Sales declining
Loss of market position
Significant cost increases or overruns
Continuing breakdown of equipment or communications
High labour turnover
The growth of scientific management globally has been stimulated by management consultants. The major difficulties for LEC consultants are, without doubt, human. For our consultants to succeed, the full buy-in and co-operation from all levels is paramount and yet is understandable that company people may resent an outsider telling them how to run their business. Your company must be, ‘on side' from the start because without this support the likely outcome will be marginal.
Excellent consultants help you keep your finger on the pulse of you business.
Future trends
- It is estimated that less than 30% of registered Australian companies have used consultants
- Of those who have used these services, the great majority indicate that they will do so again
- Competition both domestically and internationally is steadily increasing
- Australia's economy is expanding and its companies are growing larger
- Overseas trends, particularly UK, EU and USA point to increasing use of consultants
- Where one company in an industry uses consultants, others frequently follow suit
- The development of new management techniques is continuous and excellent consultants play a major part in sharing and implementing these in their client companies