However, these phases are usually less discrete than most consultants admit. Facilitating client learning—that is, teaching clients how to resolve similar problems in the future.
The lower-numbered purposes are better understood and practiced and are also more requested by clients. Many consultants, however, aspire to a higher stage on the pyramid than most of their engagements achieve. Purposes 1 through 5 are generally considered legitimate functions, though some controversy surrounds purpose 5.
Management consultants are less likely to address purposes 6 through 8 explicitly, and their clients are not as likely to request them. But leading firms and their clients are beginning to approach lower-numbered purposes in ways that involve the other goals as well. Goals 6 through 8 are best considered by-products of earlier purposes, not additional objectives that become relevant only when the other purposes have been achieved.
They are essential to effective consulting even if not recognized as explicit goals when the engagement begins. Moving up the pyramid toward more ambitious purposes requires increasing sophistication and skill in the processes of consulting and in managing the consultant-client relationship. But reputable consultants do not usually try to prolong engagements or enlarge their scope.
As the need arises, both parties may agree to move to other goals. Perhaps the most common reason for seeking assistance is to obtain information. Compiling it may involve attitude surveys, cost studies, feasibility studies, market surveys, or analyses of the competitive structure of an industry or business.
Or the company may be unable to spare the time and resources to develop the data internally. Often information is all a client wants. But the information a client needs sometimes differs from what the consultant is asked to furnish.
One CEO requested a study of whether each vice president generated enough work to have his own secretary. Many clients have never thought about that. In any case, no outsider can supply useful findings unless he or she understands why the information is sought and how it will be used.
Consultants should also determine what relevant information is already on hand. Seemingly impertinent questions from both sides should not be cause for offense—they can be highly productive.
Moreover, professionals have a responsibility to explore the underlying needs of their clients. Managers often give consultants difficult problems to solve. For example, a client might wish to know whether to make or buy a component, acquire or divest a line of business, or change a marketing strategy.
Or management may ask how to restructure the organization to be able to adapt more readily to change; which financial policies to adopt; or what the most practical solution is for a problem in compensation, morale, efficiency, internal communication, control, management succession, or whatever.
Seeking solutions to problems of this sort is certainly a legitimate function. But the consultant also has a professional responsibility to ask whether the problem as posed is what most needs solving. Very often the client needs help most in defining the real issue; indeed, some authorities argue that executives who can accurately determine the roots of their troubles do not need management consultants at all.
To do so, he or she might ask:. Suppose the problem is presented as low morale and poor performance in the hourly work force. The consultant who buys this definition on faith might spend a lot of time studying symptoms without ever uncovering causes.
On the other hand, a consultant who too quickly rejects this way of describing the problem will end a potentially useful consulting process before it begins. As the two parties work together, the problem may be redefined. Thus, a useful consulting process involves working with the problem as defined by the client in such a way that more useful definitions emerge naturally as the engagement proceeds. Nevertheless, the process by which an accurate diagnosis is formed sometimes strains the consultant-client relationship, since managers are often fearful of uncovering difficult situations for which they might be blamed.
Competent diagnosis requires more than an examination of the external environment, the technology and economics of the business, and the behavior of nonmanagerial members of the organization. The consultant must also ask why executives made certain choices that now appear to be mistakes or ignored certain factors that now seem important.
Although the need for independent diagnosis is often cited as a reason for using outsiders, drawing members of the client organization into the diagnostic process makes good sense. They, not us, must do the detail work. While this is going on, we talk with the CEO every day for an hour or two about the issues that are surfacing, and we meet with the chairman once a week.
We get some sense of the skills of the key people—what they can do and how they work. A consultant who specializes in startups can help an entrepreneur adhere to best practices in setting up a business. Underperforming business: Businesses that have a lot of potential sometimes don't perform as well as they should. A management analyst or business consultant can evaluate a business and make recommendations that can help improve the company's prospects.
Cost control: Small and medium-sized businesses may have a limited budget for staffing. By hiring a consultant for occasional work or to perform specific tasks, a company can save money while also benefiting from the consultant's labor and expertise. Entering a new industry or market: Business owners may engage the services of a consultant when entering a new industry or market.
The consultant can advise the business owner on best practices while also providing introductions and strategies that can help make the new venture or direction successful. Many people consider starting a consulting practice after working in an industry several years. Their reasons for going into consulting can include:.
Entrepreneurship: Sometimes, an individual has an entrepreneurial streak and would like to work for himself. Because he already has knowledge and connections within his industry, a consultancy may be a safer option than trying to go into an unrelated business.
Hitting a career wall: Other consultants get their start when they realize that they have gotten as far as they can in their careers without having to take on a very different role. For example, an IT professional may face the choice of remaining in her role as an engineer or admin or moving into executive management, which means a significant change in job duties. She realizes that she does not want to go into management, and after crunching some numbers, concludes that she can make more money as a consultant than she can as an employee.
Need for flexibility: Not everybody wants to or can work a 9-to-5 job. Parents, caregivers, people with disabilities and many others need or prefer to work a flexible schedule that allows them to set their own hours and to take on more or less work to fit with their other responsibilities or limitations.
Specialized expertise or skills: Some consultants have specialized expertise or skills that are marketable, but that may not lead to a full-time job. For example, someone fluent in a language or dialect not commonly spoken in the business world may find that while his language skills won't help him get a full-time job, he can get hired for plenty of short and medium-term translation and editing projects.
Once you've decided to explore becoming a consultant, there are several things you can do to help ensure your future success:. Establish yourself in your industry: As a consultant, you will be selling yourself to clients.
To do this, you will need to establish yourself as an expert in your field. The consultant should have a passion for their work, a drive for excellence and an eye for organization and detail.
It's important to find a consultant who has expertise in your industry or experience with the kinds of problems your business faces. Also, make sure they have solid referrals. In addition, ensure the business consultant has any necessary certifications that are relevant to your industry. You should vet the consultant through their website and materials.
Look for professional images and well-documented information about their services and thoroughly review contracts and consultancy fees.
It's a good idea to request examples of past successes and to speak to those businesses. The right background for the consultant you choose depends on your industry and needs. The U. Bureau of Labor Statistics notes that consultants can be management business , scientific or technical. For example, if you want someone to help your company develop new proprietary software or computer-based workflow, you may engage a technical consultant. Outside of specific needs, companies usually work with management consultants to improve their bottom line, customer satisfaction or employee morale.
Regardless of the type of consultant you work with, their background is critical. It helps you understand how likely they are to improve your business. Here's what to consider when reviewing potential consultants:. But that's what the person "takes home" as income, and consulting charges are typically higher to cover business expenses. Consultants don't always charge by the hour. According to a consultant fee study by Consulting Success, these are some popular fee methods and the percentages of consultants who favor them:.
Obviously, the size, scope and length of the project determine the cost. Business consultants are a considerable expense, but their feedback and planning can help you increase business and boost profits while eliminating problems and identifying opportunities to ensure future success.
You measure ROI by looking at certain key metrics to determine the worth of the consultancy services. Most companies look at their net profits in the quarter before hiring the business consultant, then evaluate their net profits in the next quarter or two after implementing the consultant's recommendations.
You should deduct the cost of the consultancy before calculating the ROI. Considering return on investment is an important part of hiring a business consultant. Established business consultants should be able to show their former ROI data to prospective clients.
This is the most frequent reason for companies not using consultancy services, and it falls on the consultant to use big data to demonstrate past ROI. Business consultants don't come in one size that fits all. You will need to evaluate your company in these key areas:. If your business struggles in any of these areas, then it's a good idea to seek out a business consultant. Keep in mind that business consultants specialize in particular business areas, so you should seek out a verified expert in the field.
For example, don't hire an operations specialist if you need the most help with financial planning. If you note any declines in profits that you can't explain, this could be another sign that it's time to hire a business consultant, who can pinpoint potential reasons for the decrease and ways to remedy them. Their expertise generally extends beyond that aspect though. They can offer insights into and actionable plans for voter mobilization efforts and campaign rhetoric.
They also engage in other activities, including polling and opposition research. Consulting firms are virtually everywhere — in virtually every industry — working in the interest of solving virtually every kind of problem.
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