How To Start A Consulting Business

Written by . Posted in Consulting Industry

Smiling successful young businessman

With the economy thriving right now, many entrepreneurs are looking around and noting that it’s a wondrous time to start their own business. Few professionals have enjoyed such stellar success in recent years as business consultants, whose valuable expertise steers their clients towards profitable waters while avoiding any financial calamity along the way. Starting your own consulting business is easier said than done, though, and it would be foolish to walk into this endeavor without having researched ahead of time.

Here are some inside tips for how to start a consulting business, and the pitfalls you’ll likely encounter on your way to fame and fortune.

What kind of consultant do you want to be?

Perhaps the most important question that any prospective entrepreneur should be asking themselves is what kind of consultant you want to be, as there’s no one-size-fits-all approach to this industry that can guarantee you success. Some business consultants focus on IT matters, for instance, bolstering the digital operations of their clients while offering them useful advice on what technological changes to expect in the near-future. Elsewhere, financial consultants work tirelessly to dig failing business out of the red and get them back on their feet, and a myriad of other consultant styles also exist to pick from.

If you don’t have a clear image in your mind of what kind of consultant you intend to be, your business will be a failure from the very get-go. Know your skills, experience, and the extent to which you can advise businesses wisely, and you’ll have an easier time determining what kind of consultancy operation you’re looking to start. Regardless of who you are or what you’re an expert in, though, several common pitfalls can cause your business to come crumbling in on itself only just after it’s gotten up and running.

Any entrepreneur eager to start their own consulting business should set some time aside to review the common mistakes that such businesses make far too often in the pursuit of greater profitability. A failure to take the mistakes of others into account when charting out your own business will inevitably lead you to suffer from similar errors. Furthermore, studying up on what not to do often helps you determine what it is that you do best and what it is that you should avoid handling personally. As always, remember that your personal strengths are going to be an instrumental facet of your success when it comes to starting this business.

Know how to charge your clients

The next thing to figure out is what you’re going to charge clients, and how you can identify good benchmarks by which to compare yourself to others in your industry. U.S. consulting spending topped an astonishing $58 billion back in 2016, so it’s safe to say there’s plenty of money out there for you to grab with both hands – the only question is how you’ll arrive at an affordable yet competitive rate which separates you from others. You should also be asking yourself how you intend to protect your business, as a consultant can rapidly lose everything in the event of an unexpected disaster which devastates their business infrastructure.

Knowing the benefits of having business insurance is something that aspiring consultants should have accomplished well ahead of the time that they start their business. It’s never too late to learn, though, so don’t think that you can continue to shun insurance and other protective measures for your consultancy just because you’ve avoided calamity thus far.

Finally, you’ll want to consider how you’re going to go about differentiating yourself from your competitors with a savvy marketing campaign and digital presence that enables clients to find you easily.

Making your consultancy known

You’ll never make a fortune as a business consultant until you make your consultancy known with a stellar ad campaign or digital presence that inspires clients to flock to your services. The importance of having a robust web presence in this day and age can’t be overstated; you should have social media operations up and running by the time your business opens its doors and should have some means by which you’ll be paying for online advertisements to lure in your first clients.

You should also understand how important networking is going to be to the success of your company. Consultants who don’t know how to schmooze will never succeed, as this business is heavily dependent upon forging strong personal relationships that enable you to cash in on your extensive expertise. If you read up on how consultants get clients thanks to their networking chops, you’ll appreciate the importance of getting your name out there.

Focus on protecting your business from unexpected disasters while forging a strong web presence for yourself, and your consultancy will take off in no time. Before long, you’ll have climbed to the top of the dog pile thanks to your expertise and the stellar ways by which you’re marketing it to the public.

List of Management Consulting Firms

Written by . Posted in Consulting Industry

Management Consulting Firms

One of the preparatory activities to land a consulting job is to enumerate at least five firms you’d like to be a part of. This way, you’ll be able to focus your networking and research strategies towards your goal. To help you choose, we have a list of 50 well-recognized management consulting firms in this post.

What Is a Management Consulting Firm?

It is a business that aims to help organizations analyze their problems, develop solutions and improve their performance. It employs consultants that offer objective advice as a basis for strategic decisions, organizational management and market ventures. These consultants keep themselves abreast with industry best practices as they serve as main reference in generating recommendations from time to time. Please refer to this detailed job description of management consultants for more information.

List of Management Consulting Firms

We conducted extensive research and came up with a list of 50 renowned firms all over the world. We also provide a link to their website so you can dig up more details.

MANAGEMENT CONSULTING FIRM OFFICE WEBSITE
A.T. Kearney Chicago, IL Visit Website
Accenture New York, NY Visit Website
Alvarez & Marsal New York, NY Visit Website
Analysis Group, Inc. Boston, MA Visit Website
Bain & Company Boston, MA Visit Website
Bates White Washington, DC Visit Website
Booz & Company New York, NY Visit Website
Capgemini New York, NY Visit Website
Censeo Consulting Group Washington, DC Visit Website
Charles River Associates Boston, MA Visit Website
Cornerstone Research San Francisco, CA Visit Website
Dean & Company Vienna, VA Visit Website
Deloitte Consulting LLP New York, NY Visit Website
Easton Associates, LLC New York, NY Visit Website
Ernst & Young LLP (Consulting Practice) New York, NY Visit Website
FTI Consulting, Inc. West Palm Beach, FL Visit Website
Health Advances, LLC Weston, MA Visit Website
IBM Global Business Services Armonk, NY Visit Website
IQVIA Consulting Group New York, NY Visit Website
Jabian Consulting Atlanta, GA Visit Website
Kaiser Associates Washington, DC Visit Website
KPMG LLP (Consulting Practice) New York, NY Visit Website
L.E.K. Consulting Boston, MA Visit Website
McKinsey & Company New York, NY Visit Website
Mercer LLC New York, NY Visit Website
Milliman, Inc Seattle, WA Visit Website
Monitor Group Cambridge, MA Visit Website
Navigant Consulting, Inc. Chicago, IL Visit Website
NERA Economic Consulting New York, NY Visit Website
Novantas LLC New York, NY Visit Website
OC&C Strategy Consultants London, United Kingdom Visit Website
Oliver Wyman New York, NY Visit Website
Pearl Meyer & Partners, LLC New York, NY Visit Website
Point B Seattle, WA Visit Website
Pricewaterhouse Coopers LLP (Consulting Practice) New York, NY Visit Website
PRTM (a PwC Company) Waltham, MA Visit Website
Putnam Associates Burlington, MA Visit Website
Quintiles Consulting Hawthorne, NY Visit Website
Simon-Kucher & Partners Cambridge, MA Visit Website
Stern Stewart & Co. New York, NY Visit Website
Strategic Decisions Group Palo Alto, CA Visit Website
Strategos Chicago, IL Visit Website
The Boston Consulting Group, Inc. Boston, MA Visit Website
The Brattle Group Cambridge, MA Visit Website
The Cambridge Group Chicago, IL Visit Website
The Chartis Group New York, NY Visit Website
Triage Consulting Group San Francisco, CA Visit Website
Trinity Partners, LLC Waltham, MA Visit Website
West Monroe Partners Chicago, IL Visit Website
ZS Associates Evanston, IL Visit Website

If you desire to be part of any of the management consulting firms listed above, you should get to know the firm’s structure, services and its clients’ sectors.  If you visit their site, you’ll gain information on how the firm started, where their offices are, how the typical work day looks like, how they take care of employees and what they require. This may take time and effort but it’s a critical step to be able to effectively prepare a winning management consulting application.

You Might Also Like...

Carlson Consulting Club

Written by . Posted in Consulting Industry

Consulting Clubs

The goal of the Carlson School of Management’s consulting club is to increase the probability of their MBA students being hired for consulting positions. They do this by facilitating different activities so members can develop their own methodologies and techniques.

Three Main Activities

The club’s activities can be categorized into the following:

  • Interview Preparation – Since the case interview is a tool recruiters use in the selection process, the club offers workshop and practice sessions to help student crack the case.
  • Networking Opportunities – The club makes use of its alumni network to organize events that let students interact with key people in the industry.
  • Consulting Showcase Events – The club invites management consultants to talk about their experience, clarify issues of students and share some tips.

Related Organizations

The club is related to the following:

  • Carlson Consulting Enterprise – This is a two-semester course that provides practical and theoretical consulting background to students. The enrollees are assigned to work in teams on projects for local companies. Their project work will be supplemented by weekly classes where they will be taught management consulting skills and strategies. Students are able to interact with clients and at the same time, get advice directly from their professors. The package makes the experience not only meaningful, but also practical. When students finish this course, they will have the confidence to apply at top tier firms, such as McKinsey, Bain and Deloitte.
  • Graduate Volunteer Consultants – This is an organization of MBA & MA-HRIR students who provide consulting services to non-profit organizations for free. In the past, the club has done a project on strategic planning, human resources transformation, marketing development and operations management, among others. For school year 2011-2012, the club was able to finish 16 projects.

Visit Carlson Consulting Club’s Website

To know more about their activities and contact information, kindly visit their website.

ESADE MBA Consulting Club

Written by . Posted in Consulting Industry

Consulting Clubs

The ESADE MBA Consulting Club aims to demonstrate how the school offers an exemplary program for those who want to make it to the management consulting industry. It also provides opportunities to develop the members’ strong analytical, quantitative and other skills necessary for future responsibilities.

Case Interview Preparation

The club organizes activities to enhance students’ confidence during case interviews, the most important part of the screening process. They facilitate workshops and sessions on how to resolve business problems within limited time. They invite a speaker from a remarkable management consulting firm to explain how to apply frameworks in different scenarios.

ESADE MBA Casebook

In 2011, the club released its first ESADE Casebook in partnership with Boston Consulting Group (BCG).  It consisted of 21 cases, interviews with BCG consultants, and some preparation tips added by the same firm. The book is valuable for those who like to take their recruitment preparation to a higher level. For the club, this milestone has promoted the school as one of the top providers of great candidates for this industry.

Visit ESADE MBA Consulting Club’s Website

To know about the club’s networking activities, career forums and other events, kindly visit their website. It has also links to publications of firms such as McKinsey and BCG for your reference.

Management Consulting vs. Accounting

Written by . Posted in Consulting Industry

Management Consulting Internships

Management consultants and accountants provide different services to the organization. However, both their contributions are vital to the regular operations and future decisions of top management.

Area of Concentration

The main responsibility of consultants is to resolve the business dilemma of their clients. To execute this, they analyze the scenario presented to them, along with the factors affecting it. This connotes going into the details of the market situation, the company’s financial status, competitors’ strategies and capability of human resources. The recommendations of consultants guide top management in making decisions related to their operations. Management consultants have diverse and dynamic role for they can settle any problem of a company, and they are sent to different sectors, too.

Accountants, on the other hand, focus on managing financial information. They maintain accounting records, develop company budget, process payable and receivables, audit financial documents and compute business taxes. Their records are considered crucial because they reveal the status of the company. They can tell whether the company is financially thriving or is doomed to bankruptcy. Many companies have their own accounting departments, but some just outsource accounting services to external providers.

Management consultants often use accounting documents and consult with accountants as they work on a project. These, among others, become part of the bases of their recommendations.

Significant Skills and Values

Management consultants are required to have critical thinking skills. They must view the scenario from different angles to encapsulate all factors. Breaking complex ideas into simple ones and integrating bits of information to get the entire picture help them understand the situation. Apart from these, they need to be determined enough to address their client’s needs. This may mean working overtime just to beat deadlines.

The most important value accountants must have is accuracy. They need to be meticulous with numbers to generate timely and precise reports for top management. Further, accountants must also hold on to honesty; otherwise, the system will be prone to corruption and fraud. Maintaining objectivity and avoiding conflict of interest are the other requirements.

Both management consultants and accountants must be very comfortable working with numbers since they’ll deal with figures every day. They must be proficient in using spreadsheets, as well. Possessing excellent communication and organizational skills is another qualification that backs them up in performing their responsibilities.

Educational Attainment

Management consultants can have different educational background, but it often is business-oriented or covers an MBA.

In the other field, professionals must have a degree in accounting. Those who take the licensure examination and become Certified Public Accountant get a better pay and more work opportunities. The license indicates they have reached a higher degree of technical expertise and professionalism.

You Might Also Like...

The Truth About Management Consultant Travels

Written by . Posted in Consulting Industry

Group of four leaders smiling on the background of the airplane

Management consultants are known not only for their prestigious role but for their numerous travel engagements. Travel seems to be one of the defining characteristics of consultants regardless of the firm they work for. Working as a consultant generally provides plenty of opportunities to travel, both locally and internationally.

However, many people have a lot misinformation about consulting travel. Here’s the truth about what it is like to travel as a consultant.

Consultants DO NOT Always Travel in Business Class Flights to Explore Continents Every Week

While yes, business class flights are provided for select projects and distances, it is not all the time. Consultants indeed fly business class but they also fly an equal number of economy flights. Also, international projects wherein you’ll need to traverse five different countries in the course of a week of two would be rather occasional. Most travels as a consultant are for domestic projects.

Consultants DO NOT Spend Months in the Farthest Flung Areas

This is the extreme opposite of being overly glamorous. Many people also think that consultants are often required to travel to far-flung areas. While yes, it is not impossible for a management consultant to find himself working in a city that has a few redeeming qualities, such would happen probably just once or twice throughout his career. Consultants work most of the time in large cities and developed countries.

You Will Also Work While Travelling

Yes, there would be time that you’ll need to create a PowerPoint presentation on a flight to make it to the crucial meeting, but it does not happen every single time. Consultants tend to spend part of flight time working only for international travel projects. Why? Because such projects have a higher level of pressure to succeed, both from the client and the firm. It is true that you’ll need to beat a few deadlines wherein you may have to rush from the airport to the client. But the key phrase “a few” must be highly considered.

Consultants DO HAVE a Choice about Where They Work

It is not true that consultants don’t have a choice when it comes to project location and selection. Client choice heavily depends on two things – consultant’s performance on previous projects and seniority. But that doesn’t mean that the mediocre-performing, junior-level consultants would be staffed on lower-interest projects in less-attractive locales. They too can sway staffing decisions in their favor. Staffing is done based on one’s background, interests, preferences and ability to build relationships with the firm’s management

NOT Everything Is Reimbursable

Flights, baggage fees, and travel insurance are reimbursable consulting travel expenses. However, finance charges are usually not reimbursable. Generally, firms will pay for it immediately so you won’t have to carry the cost on your credit card. As far as the airline and hotel upgrade fees, they are seldom reimbursable. Also, incidentals outside the normal meals are typically not covered. In terms of ground transportation, that is generally covered too. However, you should not expect a client to reimburse a limo service. That is just unreasonable, right?

Consultants DO NOT Effortlessly Rack up User Hotel Points/Miles to Enjoy Countless Free Vacations

Many people think that because consultants tend to travel a lot, they easily become Mr. Platinum, Gold, Diamond, Titanium or what have you. Many think that consulting travel means free upgrades on every flight, on every hotel room due to accumulated points of frequent travel. While yes, many consultants do rack up some serious points, it is because they have been in the industry longer than others. Consultants enjoying a certain “status” on every major airline or hotel chain are more likely the senior ones. So it’s really not effortless. And remember, such status won’t last forever. Once you quit consulting, you’ll not be able to enjoy such lifestyle.

Top Asia-Pacific Management Consulting Firms 2014

Written by . Posted in Consulting Industry

Portrait of successful businessman and business team at office

A consulting firm’s reputation plays an important part in the company’s standing and success. Because of this, consulting applicants take a firm’s status and background into consideration during the early stages of recruitment.

For consultants in the Asia-Pacific region, working for a prestigious firm can solidify one’s position in the industry and create new career opportunities. Consulting companies are careful to protect their reputation, as this could also reflect poorly on the clients they work with on a regular basis.

Additionally, this is another reason why consulting recruiters are highly selective during the interview process, choosing only the charismatic few who can actively represent their firm.

Top 25 Most Prestigious Management Consulting Firms in Asia-Pacific

#1: McKinsey & Company Asia

McKinsey & Company dominates the global rankings as the best consulting firm in 2014. This is no different in the Asia-Pacific region, as the company opened its third branch in Mainland China in 2013. The consulting firm is able to effectively capitalize on the progressive nature of the region, as leading businesses look for innovative ways to compete in the global market. McKinsey & Company has a strong reputation with practices firing from all cylinders (from operations and strategy to business technology and finance).

#2: The Boston Consulting Group, Inc. Asia

The Boston Consulting Group is a world-renowned firm that is well established in Asia-Pacific. The company has offices in major cities around the region, which was carefully planned to conveniently meet the needs of their clients. A number of successful consultants who came from the famous firm include Jeff Immelt (CEO- General Electric) and Indra Nooyi (CEO- Pepsi). The firm also offers a wide range of consulting services, along the lines of business growth and portfolio management.

#3: Bain & Company Asia

Third in the rankings is Bain & Company Asia. When it comes to prestige, this firm has extended its services to across the globe in hard-hitting sectors such as media and healthcare. The consulting firm made their intentions clear, when it comes to extending their services to the Asia-Pacific region, after opening their first office in Tokyo (1981). Currently, the company now has a total of 13 offices spread across Mainland China, India and SEA.

#4: Booz & Company Asia

Booz & Company Asia has a reputation for providing exceptional consulting services worldwide in the areas of aerospace, industrials and transportation. The company has vast experience working with key businesses and government ministries located in various parts of the globe. The firm has been under the watchful eye of professionals and the media in the past 2 years, as the company moves to elect a new CEO, Cesare Mainardi (April 2012); and as merger talks with PwC deepens (December 2013).

#5: A.T. Kearney Asia-Pacific

Consultants in A.T. Kearney Asia-Pacific have their minds set on growth. Released in June 2013, Vision 2020 is a project that aims to raise the firm’s status to new heights. The company plans to do this by rendering services related to analytics, operations, strategic IT and digital business.

#6: Oliver Wyman Asia

In May 2013, it was clear that Oliver Wyman was serious about their expansion in the Asia-Pacific Region. The firm welcomed a number of Partners (Anupam Sahay, Cliff Sheng and Samit Soni) to lead the practices in the area. The company also has several programs that allow consultants to work with non-profit organizations.

#7: Roland Berger Strategy Consultants Asia

Roland Berger Strategy Consultants is one of the first firms to make an impact in Asia-Pacific. The company has offices in the following cities in the region: Beijing, Guangzhou, Hong Kong, Kuala Lumpur, Mumbai, Seoul, Shanghai, Singapore, Taipei and Tokyo.

#8: Deloitte (Asia Consulting Practice)

Considered to be as one of the top 5 consulting firms in the world, Deloitte has made its services known in the Asia-Pacific region by extending their practice in Vietnam, Guam, Papua New Guinea and Brunei. The company is primarily known for their expertise in restructuring, analytics and global mobility.

#9: Mercer Limited Asia

Mercer Limited Asia offers quality consulting services for a range of businesses. What makes them unique is the establishment of Mercer College, an educational hub that consists of workshops, classes and programs. The topics covered are areas that the company excels in professionally, such as merger and acquisitions, human resources organization, communications and leadership application.

#10: L.E.K. Consulting Asia

L.E.K. Consulting Asia has influenced businesses in the Asia-Pacific region in the following industries: aviation, retain, media, healthcare and biopharma. The company is one of the first firms to provide advice related to low-carbon strategies. Since then, the firm has gone out of their way to reach out to other consultants and professionals by implementing social programs such as the L.E.K. Advisor.

#11: Accenture Asia

Accenture’s practice in Asia has a track record of being reliable. With over 250,000 employees who oversee the daily operations of the company, Accenture is able to provide industry focused advice to leading businesses in the region. The firm offers key consulting services including Business Process Management, Finance and Enterprise Performance, International Development and Risk Management.

#12: KPMG (Asia Consulting Practice)

With their roots in accounting services, KMPG’s knowledge in financial risk management, internal audit, and compliance is highly effective for large companies in the Asia-Pacific region. However, it should be well noted that the company is not limited to such fields, as they are also well equipped to handle Business Intelligence and Analytics, Shared Services and Outsourcing Advisory, and Post Merger Integration.

#13: EY (Ernst & Young) Consulting Practice Asia

EY (Ernst & Young) Consulting Practice in the Asia-Pacific region addresses major concerns related to performance improvement, risk management and strategy. Although the services provided by the firm vary from region to region, their core lies in finance and supply chain operations.

#14: PwC (PricewaterhouseCoopers) Asia (Consulting)

PricewaterhouseCoopers Asia has established themselves as a reputable consulting firm in Asia-Pacific. The company currently services over 80% of businesses found in the Fortune 500 list. Apart from exemplary consulting practices, the firm is also known for its auditing services.

#15: Capgemini Asia

Capgemini Asia provides essential consulting services ranging from Business Process Outsourcing and Application Lifecycle Services to Social Business and Supply Chain Management. The company led IDC MarketScape 2013, making them a sought after firm when it comes to IT services.

#16: IBM Global Services Asia

IBM’s move to acquire part of PwC in 2002 put the company in the right direction to boost their consulting services. Because of their background and firsthand experience in IT (infrastructure and software), many businesses in the relevant industry constantly seek out their professional advice.

#17: Arthur D. Little Asia

Known as one of the oldest consulting firms (started in 1886), Arthur D. Little has seen the economy and global trends change rapidly. In the past decade, the company has undergone internal restructuring to better serve its clients outside of North America.

#18: OC&C Strategy Consultants Asia

A consulting firm that focuses on strategy is OC&C Strategy Consultants Asia. The company’s core practice relies on the following areas: group strategy, transaction support, strategy realization and organization. OC&C offices in the Asia-Pacific region can be found in Hong Kong, Mumbai, New Delhi and Shanghai.

#19: Hay Group Asia

Hay Group Asia started a thorough study on the Chinese market in 2006 with hopes to enhance their business strategy advisory practice. As a result, the survey has helped lower risks for businesses that are looking to enter the crowded market.

#20: Nomura Research Institute Ltd. Asia

Nomura Research Institute, Ltd. (NRI) is a firm based in Tokyo, which focuses their practice on consulting and IT-related services. Their consulting services include human resources strategies, corporate governance, and business strategies and development.

#21: Oracle Consulting Asia

Mostly known for their software and web development services, Oracle has been experiencing steady growth due to their consulting branch. The company’s success in Asia-Pacific is widely recognized, as they now have more employees in the region compared to their main offices in North and South America.

#22: Mars & Co Asia

Similar to OC&C, Mars & Co Asia devotes their consulting practice to strategy. The company is highly selective of their clients and reaches out to businesses in the Asia-Pacific region through their offices in Tokyo and Shanghai.

#23: NERA Economic Consulting Asia

NERA Economic Consulting Asia renders advice related to economic analysis and reports. This allows the company to create effective strategies for businesses that are concerned about their competition and sustainability in the global market.

#24: Towers Watson Asia

After the merger between Towers Perrin and Watson Wyatt Worldwide to form Towers Watson, the firm now offers notable consulting services in the field of insurance, finance and tax guidance.

#25: Aon Hewitt Asia

Aon Hewitt started as an insurance firm and quickly grew their consulting services in the areas of human resources and outsourcing. The company first started their Asia-Pacific expansion in India, and moved on to cover other major countries such as Singapore, Malaysia, Thailand and Japan.

Heavy Expansion in the Asia-Pacific Region

While companies in Asia-Pacific reposition themselves to become leading competitors in the global market, the more we may see consulting firms establish offices in the region.  Lastly, this may also play a role in the firm’s reputation in rendering advice that can set a company apart from mediocre players.

You Might Also Like...

Georgetown Graduate Student Consulting Group

Written by . Posted in Consulting Industry

Consulting Clubs

The Graduate Student Consulting Group of Georgetown University aims to assist their members in securing a position in management consulting firms by equipping them with the necessary knowledge, connections and expertise.

Consulting Day

This is one of the annual activities hosted by the club. It provides a venue for participating students, alumni and professors to explore different types of consulting career paths. Representatives from different firms, such as Booz & Company and Deloitte, come to introduce their firm and talk about the industry. In this activity, students can also network with key people to expedite the process of getting an entry level job.

Links to Resources

The club’s website can be considered a hub of significant management consulting resources. It has links to sites that provide intensive background on the ins and outs of the industry. It has also a collection of links to professional associations, case interview resources and big consulting firms. With the gathered information, it is easier for users to make their job search.

Consulting Trek

Another interesting activity of the club is a trip to various firms in New York, Washington and other cities. The purpose of this event is to provide members with more information, exposure and networking opportunities.

Layoffs, Firings and Consultants

Written by . Posted in Consulting Industry

Tearing the contracts

About the author: Lew Sauder is the co-author of The Reluctant Mentor and author of Consulting 101: 101 Tips for Success in Consulting.  He has been a consultant with top-tier and boutique consulting firms for seventeen years.  Lew can be reached at Lew@Consulting101Book.com.

Civil war general William Tecumseh Sherman is famous for saying “War is hell”. As one who has never engaged in battle, I can only imagine how true that is.

I have to believe that the business world equivalent of hell is terminating someone’s employment.

When you relieve an employee of their duties, it usually comes under one of two broad categories.  The person is fired for cause: Perhaps they were caught being unethical or, after efforts to improve their performance, they have proven to be incapable of performing their job. While firing someone for unethical activity may not be easy, it is probably the least difficult way of letting someone go.

Firing someone for incompetence is a little more difficult.  There may have been an attitude that you had to deal with from the employee, but it may have been someone who tried hard and just couldn’t cut it.

The second category of letting an employee go is through layoff. Anyone who has been in the marketplace over the past six or seven years has almost certainly had experience with this type of layoff.

Layoffs occur when an organization has over-hired staff in the anticipation of an increased or continued need for productivity. Market situations changed causing the organization to have too much staff, or at least too much skill in a low demand area.

The economic recovery has been a slow and jagged upward climb.  Any manager who was involved in layoffs from the “great recession” is certain to be hesitant to aggressively hire back loads of staff.

After experiencing the difficult and life changing face-to-face conversations, the resulting fallout of morale issues and the monetary cost from an HR perspective, a manager will make her next hiring decision with great caution.

Many organizations have turned to consulting as an alternative to manage their staffing needs. A basic core of full-time employees is usually needed in most organizations for knowledge retention. For any additional needs, organizations have found that consulting provides the nimbleness to meet their needs in many ways.

Business Advisory Services

Businesses have found that turning to management consulting firms provides industry insights to anticipate market needs and develop strategies that provide them with readiness to market changes instead of being reactive to them.  This allows them to change their staffing practices before they overload with skills that will soon be redundant.

Project Teams

Having a more proactive strategy allows an organization to define and prioritize the efforts that make the most sense for their long-term sustainability. Rather than staffing full-time employees for these projects, they can contract with consulting firms to provide the knowledge and experience to manage the project, implement the initiative and train up their existing full-time staff successfully.  When the project is complete, the team leaves as expected, without career interruptions, morale issues or severance packages. The next project team, with their own specialized skills can come in for the next project.

Staff Augmentation

There are times when an organization simply needs a surgical strike.  They have a temporary need for a consultant/contractor to fill a skills gap for a specific or indefinite period of time.  A temporary computer programmer or even a temporary CFO, contracted until a full-time employee can be hired is an excellent opportunity for both the organization and the individual.

Workers are joining the consulting ranks in record numbers.  This phenomenon is largely driven by demand created by organizations who have found consulting to be an excellent approach to reducing the risk of reductions in force. It is also a great opportunity for knowledge workers to join the consulting industry and learn what consulting is all about.

You Might Also Like...

What Is the Future of Management Consulting?

Written by . Posted in Consulting Industry

consulting

Management consulting has come a long way in the past century. Some of the largest consulting firms such as McKinsey & Company established their services during this period.

Since then, the growth of these service-oriented companies has accelerated at the same rate as their clients. With an overall average of 10% growth per annum, the billion-dollar industry is showing no signs of slowing down. Today, we are seeing the top firms opening branches in cities where up and coming companies flourish such as Shenzhen and Beijing.

Symbiosis Relationship

It is important to take note that management consultants have also extended their roles in leading companies as CEOs and members of the board. The consulting network is a tightly knit web of high-level consultants, ex-consultants and their clients, which are composed of the higher levels of management.

Large companies are always on the lookout for new strategies, whether it’s to increase sales, lower operational costs, or for restructuring. Moreover, when faced with a high-risk decision, many companies (that can afford it) rely on the advice of management consultants for a fresh perspective and a solution.

Contrary to popular belief, not all firms are in direct competition with each other. Some large consulting firms rely on others to work on projects that carry over due to an overload of assignments. As a result, both firms benefit from this agreement and trade off.

Symbiosis Growth

As mentioned earlier, the growth of the consulting industry heavily relies on the growth of large companies. They are both directly related to each other. Due to these highly competitive markets, big brands are always on the lookout for new strategies.

One of the problems with finding new strategies is that a new perspective is needed. A senior staff who has been with the company for over 10 years may have a difficult time seeing the negative aspects of the business, as he or she might have already been accustomed to working around them. Furthermore, long-time members of the staff have a personal attachment to the company and their peers, making it hard to make and implement new strategies that could harm their personal relationships.

These types of companies heavily rely on the advice rendered from management consultants. The more they earn, the larger the company gets the higher the risks.

To make an even clearer point, notable companies don’t just avail of a consulting firm’s services once. Often times, they have their “go to” firm that is familiar with the in and outs of their company. It’s not rare for a company to request for more than one project at one time. The frequency may also vary depending on the yearly events of the company. The board may request for the services of a management consultant during the yearly budget cuts, or strategy decision work. Because of this, consultants will continue to be in demand in the future.

The Rise of New Sectors

New industries are slowly on the rise. The Information Technology (IT) is a relatively new industry. These days, IT consultants are sought after due to the boom in the technology industry. The same can be said for industries related to medical science, online security and online businesses. These new sectors are in need of a new breed of consultants with relevant backgrounds.

What this could also mean is that other academic backgrounds may prove to be an asset for individuals who want to be consultants for these new industries. Marek Ranis, a management consultant for 14 years with experience in Fortune 500 technology companies, explains this further in an article he wrote:

“First, I think that the “generalist consultant” model is no longer viable. Consulting firms that want to succeed must offer subject matter expertise, not just visions. This presents a challenge to the traditional consulting model of hiring bright people and throwing them at projects as they come. Specialization is a difficult thing to obtain at large consulting houses that are obsessed with chargeability. On the other hand, boutique firms with deep expertise seem to be doing well, especially if they partner with other firms that fill in the gaps.”

We can also say that industries that are not as popular as they once were may also affect the number of consultants that specialize in the specific field. In the middle of the spectrum, we may see consultants that specialize in a particular part of operations or strategy, such as HR consultants or social media marketing consultants where before it was unheard of.

Bad Economy Equals Good Economy for Consulting Firms

A bad global economy doesn’t hurt everyone. Employment companies and recruitment agencies have experienced an increase in customers due to the number of unemployed workers. The sad reality is that because more people are getting sick due to lack of personal funds for medicine, proper food and water, and shelter during bad weather, the medical industry is not greatly affected by the dips in the market.

The same can be said for the management consultant industry. Businesses that are affected by the struggling economy need to do something different. If they don’t, they could risk shutting down their company. Their target market could still be the same, but without the same buying power, a drastic new plan may be needed.

This is when a management consultant comes to the rescue. Large companies that may not be used to losing money are in a state of panic. They may have tried everything, but nothing is working. One of the last resorts would be to restructure and cut down on employees or close offices in countries where business is at an all-time low.

Cost reduction, strategies related to turnaround, and merging (with the intention to save) are specialties that are needed during these times. Consulting firms that specialize in growth strategies, research and development may find that some companies are not looking for these types of services.

Shifting Trends

Because of the exponential growth of the online world, trends come and go at an alarming rate. The predictability of viral videos is impossible to calculate. Companies can experience a sudden growth in sales in one month, and the complete opposite in the next.

A great example of this is cloud storage. 7 years ago, companies such as Dropbox (estimated value of 8 billion USD), Box, YouSendIt, and SkyDrive did not exist. The entire cloud storage market wasn’t around. They might’ve been under development, but were not open to consumers. Fast forward to today, companies such as P&G, BMW and Pepsi rely on this technology to run their businesses.

Where is cloud storage headed to in the next 5 years? That we don’t exactly know. Developers are constantly making sure that they have the next best feature or update. Management consultants also play an essential role in cloud storage companies, making sure that their actions are low-risk.

The rate at which businesses can succeed and fail is fairly high. Because of this, they may have to invest in the services of a management consulting firm to ensure that their next move is calculated and profitable.

Freelance Consultants Are Here to Stay

Not all companies can afford to hire a consultant from a reputable firm. If they had the budget before, they may not have it in the future. Moreover, consulting firms that bundle their services into large expensive packages may drive businesses that need their services to look elsewhere. After all, some companies say that most of what they are paying for is the “name” of the firm they want to work with. Additionally, information is becoming more and more accessible, which means that the need for a consultant to do extensive research may be lower.

Currently, we are seeing an increase in freelance consultants. The great thing is that distinguishable freelance consultants usually come from a well-known firm, for a fraction of the price. It’s a win-win situation, freelance consultants earn more because they pocket all of the service fees, and businesses are happy to pay the substantially lower price for the same quality service.

Wrap Up

In conclusion, the future of management consulting looks bright and stable. As the “Big 3” consulting firms expand to new cities with growing economies, the more we can be sure that the industry is here to stay. Specialization is becoming more of a requirement than a bonus. As businesses struggle to cope with trends, the more consulting firms will continue to bring in new clients.

Lastly, the management consulting industry has adapted to the current economy in a number of ways. The increase in freelance consultants can be beneficial for everyone in the industry due to lower fees, increase in competition (between firms and freelance consultants) and the growth of companies, which is an essential factor in the future of the management consulting.

References

You Might Also Like...