Consultantsby Peter Parkes
What is a consultant?
A red-faced man in a balloon appears through thick cloud and asks a man in a suit, standing on a hill, where he is. The man in the suit replies, ‘You are about 10 metres off this crag, in great peril, and out of control.’ The red faced man in the balloon replies, ‘You must be a consultant – very accurate information, but it does not solve my problem.’ The man in the suit replies, ‘And you sir, must be a manager. You don’t know where you are, or where you are going, but five minutes after speaking to a consultant, it is my fault!’
The Management Consultancies Association defines consulting thus: ‘The creation of value for organisations, through the application of knowledge, techniques, and assets, to improve performance. This is achieved through the rendering of objective advice and/or the implementation of business solutions.’
Given this definition, a consultant could be internal, and indeed some companies have their own internal pool of consultants. Saying that, it is accepted wisdom that ‘You cannot be a consultant to yourself’, and occasionally even firms of consultants bring in other consultants (discreetly) to help them to see the wood from the trees or provide specific advice.
It is also accepted wisdom that business transformation – that is, fundamental change rather than incremental improvement – is best facilitated by ‘intervention’, as it needs an outside-in perspective, free from internal politics and emotional attachment to history and the status quo.
There is a move by purchasing departments to ‘commoditise’ all things to drive costs down through competition. Thus, the gap between consultants and contractors (in other words, temporary resources used to supplement normal operations or project delivery) is becoming blurred. If you are at least clear what it is you need, this will help to determine whether you require a consultant or a contractor, or indeed whether you should be recruiting a permanent employee, and this in turn will suggest how to find and procure the right person or people.
The origins of consultancy
The Management Consultancies Association celebrated its 50th birthday in 2006, and traces the industry back to post-war reconstruction. (Of course, every king had his advisors before this, and Machiavelli made a niche market for advisory services to his Prince).
Waves of consultancy followed new waves of management thinking, from the post-war adoption of Quality Management and Total Quality Management (TQM), through phases of Business Process Re-engineering (BPR) and Enterprise Resource Planning (ERP), to e-Business and Customer Relationship Management (CRM) today. Saying that, the biggest consultancy firms still get the bulk of their fees from Audit and Assurance.
Initially, consultants sold themselves on their superior knowledge. Their MBAs meant that they had been taught the theory of professional management, whereas most managers at the time were largely ignorant of the theory.
As an auditor, you were always an outsider, but a consultant is someone who comes to help.
Today, many managers have also been through management courses, if not MBAs, and the Chartered Management Institute continues to mark the improvement of internal professional management. Consultants therefore have to offer value in other ways. Recently, that has been found in their knowledge of systems and processes, or extensive relevant experience at tackling similar problems coupled with knowledge of best practice in the market place. Today, though, consultants are often expected to do ‘the doing’, and not just provide advice and walk away.