Understanding Management Consulting in 5 minutes

Francisco Hernandez-Marcos MBA2004/Group C2

London, 17 November 2002

WHAT´S MANAGEMENT CONSULTING?

35-year-old Executive Trainee:

Accountant:

•Management Consulting is full of topics and jokes

•Management Consulting is still something mysterious for many people

Client Team Member:“I can't bear their arrogance and manners”

“I can't help thinking why we spend so much money in this kind of services”

Experienced employee:“They've no idea of how this business did run, run and will run”

“Why my boss receives so easily this 24-years-old recently graduated from University?”

Competitors:“Their way to copy others is ‘doing benchmarking’”

Journalist:“Their success is based in their huge network; they have former employees in almost all big companies”

Client Team Member: “They make absurd spreadsheet models to conclude what I already know”

CEO Assistant:“They are so kind I'd like to introduce my niece”

•Understanding the Business

•Understanding the Client

•Understanding the Consultants

•Understanding the Client Team Members

•Understanding Recommendations

CONTENT

MINUTE 1: THE BUSINESS5

1

23

4

MEMORANDUM FROM: _____

• ___________

• ___________

• ___________

• ___________

Question RecommendationTeam working Decision

Possible consulting involvement

Examples:

•What branches should we close after merging?

•Which countries/Business Units should I be?

•What would be my new-business-unit configuration

Tasks:

-Researching

-Conducting _analysis

-Brainstorming

-Teamwork

-Reporting

Examples:

•List of branches to close

•List of countries/Business Units

•Master document with new business unit configuration guidelines

MINUTE 2: THE CLIENT5

1

23

4

“If a make a strong position in this unusual issue and then it fails, I’ll be ruining my 20-year-old successful career”

•Circumstances make many outstanding executives become very risk averse over time•Being immersed in the business can be a handicap when one needs to think openly•Outsourcing part of the decision-making process is always tempting

“I’m not sure if my team’s gonna be able to tackle such a difficult challenge”

“Would it be useful a third-party opinion to prevent us from forming biased conclusions?”

“The impact is huge: x,000 employees, € xxxmillion in revenues, € yyymillion investment… ”

“Day to day work makes very hard thinking about big issues”

51

23

4

The Myths: The Truths*:

* Desirable truths

•Hasn't enough knowledgeof the sector

•Repeats in public what the client already knows

•Sometimes talks too much

•Invents models and numbers to support his/her ideas

•Is open-minded so can, and in fact did, work in very different contexts/sector

•Is able to raise and supportstagnated ideas/concepts

•Likes thinking in loud voice as a means to foster further discussion

•Builds up quantitative models that are just another helpful piece of information

MINUTE 3: THE CONSULTANT

Mission: Coordinating and managing the team to obtain the best output

MINUTE 4: THE CLIENT TEAM MEMBERS5

1

23

4

•Right to be listened to•Right to participate in a risk-free

environment•Right to get home at due time•Right to understand consultants’ jargon•Right to know where the project goes•Right to learn from the experience

CTMs are vital for the quality of the recommendation.

CTM* BILL OF RIGHTS:

* Client team Members

Client Team Member:

“member of the team who come from the client organisation”

MINUTE 5: RECOMMENDATIONS5

1

23

4

¶ Each project should end with a document that states all the conclusions of the work done, and the final recommendation to the overhead

¶ The decision on whether taking the final recommendation or not always lays in the client

¶ In many cases the document is nothing but the corner stone of the real project

CONCLUSIONS

Currently, business environment is so dynamic that the key differentiating skill among companies is their ability to push up new challenges/projects

CONCLUSIONS

Currently, business environment is so dynamic that the key differentiating skill among companies is their ability to push up new challenges/projects

Lack of leadership is actually a disease in bigger companies, especially when dealing with unusual business

CONCLUSIONS

Currently, business environment is so dynamic that the key differentiating skill among companies is their ability to push up new challenges/projects

Lack of leadership is actually a disease in bigger companies, especially when dealing with unusual business

M. Consulting may be used by companies to overcome this drawback

CONCLUSIONS

Currently, business environment is so dynamic that the key differentiating skill among companies is their ability to push up new challenges/projects

Lack of leadership is actually a disease in bigger companies, especially when dealing with unusual business

M. Consulting may be used by companies to overcome this drawback

Management Consulting

Do we know now something more about…

… the Business?

… the Client?

… the Consultants?

… the Client Team Members?

… Recommendations?

CONTENT

MAIN PLAYERS IN MANAGEMENT CONSULTANCY

McKinsey&Co

A.T. Kearney

Boston Consulting Group

Bain&Co

Booz-Allen & Hamilton

Roland Berger

Arthur D. Little

CountriesCountries

44

N/A

32

N/A

N/A

22

25

BACK-UP

OfficesOffices

82

N/A

>50

N/A

85

32

>40

Market ShareMarket Share

21%

8%

6%

4%

4%

3%

2%

Income per consultant(Euro ,000)

Income per consultant(Euro ,000)

4 3 0

3 6 0

4 4 0

2 8 0

4 8 0

Source: Annual Reports: Management Consultants International 2001

N/A

N/A

DISCLAIMER

This presentation is based upon personal opinions. It does not pretend to do an exhaustive analysis of the topic. However, the author thinks it might be useful for the reader knowing some of the aspects here presented before making his or her own opinion

THE END